What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-10 · 194 added, 129 removed, 391 unchanged (45% of the section changed)

17 unchanged sentences

We believe that there are a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital and generally available capital for infrastructure projects in today’s marketplace, will allow us to take advantage of these opportunities.

As of March 31, 2024, we had total consolidated assets of $2.3 billion and redeemable preferred stock and equity of $0.7 billion.

As of June 30, 2024, we had total consolidated assets of $2.5 billion and redeemable preferred stock and equity of $0.6 billion.

Operating Segments

6 unchanged sentences

The Jefferson Terminal segment consists of a multi-modal crude oil and refined products terminal, Jefferson Terminal South and other related assets.

The Repauno segment consists of a 1,630-acre deep-water port located along the Delaware River with an underground storage cavern, a new multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities.

The Repauno segment consists of a 1,630-acre deep-water port located along the Delaware River with an underground storage cavern, a multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities.

The Power and Gas segment is comprised of an equity method investment in Long Ridge, which is a 1,660-acre multi-modal terminal located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant in operation.

2 unchanged sentences

Additionally, Corporate and Other includes an investment in an unconsolidated entity engaged in the acquisition and leasing of shipping containers and an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.

On May 22, 2023, Fortress and Mubadala announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank.

After the closing of the transaction, Fortress will continue to operate as an independent investment manager under the Fortress brand, with autonomy over investment processes and decision making, personnel and operations.

On May 14, 2024, certain members of Fortress management and affiliates of Mubadala Investment Company, through its wholly owned asset management subsidiary Mubadala Capital (“Mubadala”), completed their acquisition of 100% of the equity of Fortress.

Fortress continues to operate as an independent investment manager under the Fortress brand, with autonomy over investment processes and decision making, personnel and operations.

Results of Operations

6 unchanged sentences

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 .

Comparison of the three months ended March 31, 2024 and 2023

Comparison of the three and six months ended June 30, 2024 and 2023

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

14 unchanged sentences

Equity in (losses) earnings of unconsolidated entities (12,788) (1,625) (11,163) (24,690) 2,741 (27,431)

Loss on sale of assets, net (13) (124) 111

(Loss) gain on sale of assets, net (150) 647 (797) (163) 523 (686)

Loss on modification or extinguishment of debt (9,170) — (9,170) (9,170) — (9,170)

Interest expense (29,690) (24,182) (5,508) (57,283) (47,432) (9,851)

8 unchanged sentences

The following table sets forth a reconciliation of net loss attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

21 unchanged sentences

________________________________________________________

(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 $—.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net (loss) income of $(11,942) and $4,318, (ii) interest expense of $10,893 and $8,032, (iii) depreciation and amortization expense of $5,130 and $5,666, (iv) acquisition and transaction expenses of $19 and $20, (v) changes in fair value of non-hedge derivative instruments of $2,053 and $(9,847), (vi) equity-based compensation of $1 and $1, (vii) asset impairment of $87 and $— and (viii) equity method basis adjustments of $16 and $—, respectively.

(3) Includes the following item for the three months ended March 31, 2023:

Railroad severance expense of $1,288.

(4) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) equity-based compensation of $431 and $110, (ii) (benefit from) provision for income taxes of $(134) and $53, (iii) interest expense of $2,189 and $1,857, (iv) depreciation and amortization expense of $3,194 and $3,136, (v) changes in fair value of non-hedge derivative instruments of $— and $61, (vi) interest and other costs on pension and OPEB liabilities of $2 and $1 and (vii) other non-recurring items of $— and $3, respectively.

Comparison of the three months ended March 31, 2024 and 2023

Total revenues increased $6.0 million due to higher revenues of $5.3 million in the Railroad segment and $5.5 million in the Repauno segment, offset by lower revenues of $4.3 million in the Corporate and Other segment and $0.5 million in the Jefferson Terminal segment.

(1) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) depreciation and amortization expense of $20,163 and $20,292 and (ii) capitalized contract costs amortization of $1,433 and $—, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) depreciation and amortization expense of $40,684 and $40,427 and (ii) capitalized contract costs amortization of $2,009 and $—, respectively.

(2) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) net loss of $(12,838) and $(1,660), (ii) interest expense of $11,182 and $8,304, (iii) depreciation and amortization expense of $8,050 and $7,967, (iv) acquisition and transaction expenses of $31 and $237, (v) changes in fair value of non-hedge derivative instruments of $(3,875) and $(7,963), (vi) equity-based compensation of $1 and $1, (vii) asset impairment of $163 and $—, (viii) equity method basis adjustments of $16 and $— and (ix) other non-recurring items of $478 and $—, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) net (loss) income of $(24,780) and $2,658, (ii) interest expense of $22,075 and $16,336, (iii) depreciation and amortization expense of $13,180 and $13,633, (iv) acquisition and transaction expenses of $50 and $257, (v) changes in fair value of non-hedge derivative instruments of $(1,822) and $(17,810), (vi) equity-based compensation of $2 and $2, (vii) asset impairment of $250 and $—, (viii) equity method basis adjustments of $32 and $— and (ix) other non-recurring items of $478 and $—, respectively.

(3) Includes the following item for the three and six months ended June 30, 2023:

Railroad severance expense of $51 and $1,339, respectively.

(4) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) equity-based compensation of $268 and $76, (ii) (benefit from) provision for income taxes of $(142) and $35, (iii) interest expense of $2,639 and $1,880, (iv) depreciation and amortization expense of $3,387 and $2,944, (v) acquisition and transaction expense of $3 and $8, (vii) interest and other costs on pension and OPEB liabilities of $— and $1, (viii) asset impairment of $— and $2 and (ix) loss on modification or extinguishment of debt of $2,150 and $—, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) equity-based compensation of $699 and $186, (ii) (benefit from) provision for income taxes of $(276) and $88, (iii) interest expense of $4,828 and $3,737, (iv) depreciation and amortization expense of $6,581 and $6,080, (v) changes in fair value of non-hedge derivative instruments of $— and $61, (vi) acquisition and transaction expense of $3 and $8, (vii) interest and other costs on pension and OPEB liabilities of $2 and $2, (viii) asset impairment of $— and $2, (ix) loss on modification or extinguishment of debt of $2,150 and $— and (x) other non-recurring items of $— and $3, respectively.

Comparison of the three months ended June 30, 2024 and 2023

Total revenues increased $3.1 million due to higher revenues of $3.1 million in the Railroad segment and $4.1 million in the Jefferson Terminal segment, offset by lower revenues of $4.0 million in the Corporate and Other segment and $0.1 million in the Repauno segment.

Roadside services revenue decreased $4.0 million due to the decline of roadside services for FYX.

Terminal services revenues increased $2.7 million primarily due to the commencement of a butane throughput contract at Repauno in April 2023.

Rail revenues increased $5.3 million primarily due to an increase in both carloads and rates per car.

Comparison of the three months ended March 31, 2024 and 2023

Total expenses increased $2.0 million, primarily due to an increase in (i) acquisition and transaction expenses, (ii) general and administrative expenses and (iii) depreciation and amortization, partially offset by a decrease in operating expenses.

Acquisition and transaction expenses increased $0.7 million associated with professional fees for a potential acquisition in the Corporate and Other segment.

General and administrative expenses increased $1.7 million primarily due to higher professional fees in the Corporate and Other segment.

Depreciation and amortization increased $0.4 million primarily due to additional assets placed in service in the Jefferson Terminal segment.

Terminal services revenues increased $3.4 million primarily due an increase in average crude oil throughput volumes in the Jefferson Terminal segment .

Rail revenues increased $3.1 million primarily due to an increase in both carloads and rates per car in the Railroad segment.

Comparison of the six months ended June 30, 2024 and 2023

Total revenues increased $9.1 million primarily due to higher revenues of $8.4 million in the Railroad segment, $3.6 million in the Jefferson Terminal segment and $5.4 million in the Repauno segment, offset by lower revenues of $8.3 million in the Corporate and Other segment.

Roadside services revenue decreased $8.3 million primarily due to the decline of roadside services for FYX.

Terminal services revenues increased $6.1 million primarily due to the commencement of a butane throughput contract at Repauno in April 2023, as well as an increase in average crude oil throughput volumes in the Jefferson Terminal segment.

Rail revenues increased $8.4 million primarily due to an increase in both carloads and rates per car in the Railroad segment.

Comparison of the three months ended June 30, 2024 and 2023

Total expenses decreased $3.2 million, primarily due to a decrease in (i) operating expenses, (ii) general and administrative expenses and (iii) asset impairment.

Operating expenses decreased $1.6 million which primarily reflects:

• a decrease of $4.9 million due to decreased roadside services at FYX;

• a decrease of $0.5 million in fuel costs in the Railroad segment;

partially offset by

• an increase of $2.7 million primarily due to costs associated with stock-based compensation, insurance, higher labor and other costs associated with increased terminal throughput activity in the Jefferson Terminal segment;

• an increase of $1.2 million in the Repauno segment which primarily reflects higher operating expenses due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site.

• an increase of $2.0 million primarily due to costs associated with stock-based compensation, as well as insurance and higher labor and other costs associated with increased terminal throughput activity in the Jefferson Terminal segment;

• an increase of $1.4 million in the Railroad segment mainly due to increased car loads.

General and administrative expenses decreased $0.9 million primarily due to lower professional fees in the Corporate and Other segment.

Asset impairment decreased $0.6 million primarily due to impairment for certain scrap assets in the Railroad segment in 2023.

Comparison of the six months ended June 30, 2024 and 2023

Total expenses decreased $1.2 million, primarily due to decreased operating expenses, partially offset by increase in acquisition and transaction expenses.

Operating expenses decreased $2.1 million which primarily reflects:

• a decrease of $9.3 million due to decreased roadside services at FYX;

partially offset by

• an increase of $1.1 million due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site in the Repauno segment;

• an increase of $4.7 million primarily due to costs associated with stock-based compensation, as well as insurance and higher labor and other costs associated with increased terminal throughput activity in the Jefferson Terminal segment;

• an increase of $1.1 million in the Railroad segment mainly due to increased car loads.

Acquisition and transaction expenses increased $0.9 million primarily due to professional fees for a potential acquisition at the Corporate and Other segment.

Other expense

Total other expense increased $18.4 million during the three months ended March 31, 2024 which primarily reflects:

• an increase in interest expense of $4.3 million primarily due to an increase in the average outstanding debt of approximately $71.0 million which consists of (i) $100.6 million for the Senior Notes due 2027, (ii) $19.3 million for the DRP Revolver and (iii) $1.1 million for the EB-5 Loan Agreement, offset by the full repayment of the Transtar Revolver in July 2023 for $50.0 million;

Total other expense increased $21.0 million during the three months ended June 30, 2024 which primarily reflects:

• an increase in loss on modification or extinguishment of debt of $9.2 million in the Jefferson Terminal segment;

• an increase in interest expense of $5.5 million primarily due to an increase in the average outstanding debt of approximately $168.7 million which consists of (i) $84.3 million for the Senior Notes due 2027, (ii) $19.3 million for the DRP Revolver and (iii) $115.1 million for the 2024 Bonds as well as the Barclay’s loan, offset by the full repayment of the Transtar Revolver in July 2023 for $50.0 million;

• an increase of $11.2 million in equity in losses of unconsolidated entities primarily due to a decrease in unrealized gains on power swaps at Long Ridge;

• a gain on sale of land recognized in the prior year of $0.8 million in the Jefferson Terminal segment;

partially offset by

• an increase of $5.6 million in Other income due to interest income from increased loan balance on the loan agreement between the Company and Long Ridge Energy & Power LLC.

Net loss increased $14.4 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Total other expense increased $39.4 million during the six months ended June 30, 2024 which primarily reflects:

• an increase of $27.4 million in equity in losses of unconsolidated entities primarily due to a decrease in unrealized gains on power swaps at Long Ridge;

• an increase in interest expense of $9.9 million primarily due to an increase in the average outstanding debt of approximately $119.8 million which consists of (i) $92.5 million for the Senior Notes due 2027, (ii) $19.3 million for the DRP Revolver and (iii) $58.1 million for the 2024 Bonds as well as the Barclay’s loan, offset by the full repayment of the Transtar Revolver in July 2023 for $50.0 million;

• an increase in loss on modification or extinguishment of debt of $9.2 million in the Jefferson Terminal segment;

• a gain on sale of land recognized in the prior year of $0.7 million in the Jefferson Terminal segment;

partially offset by

• an increase of $7.7 million in Other income due to interest income from increased loan balance on the loan agreement between the Company and Long Ridge Energy & Power LLC.

Net loss increased $14.3 million and $28.7 million during the three and six months ended June 30, 2024, respectively, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $5.3 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Adjusted EBITDA increased $6.6 million and $11.9 million during the three and six months ended June 30, 2024, respectively, primarily due to the changes noted above.

Railroad Segment

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

7 unchanged sentences

Total expenses 28,714 28,168 546 58,752 58,828 (76)

Other expense

Other (expense) income

Loss on sale of assets, net (150) (85) (65) (163) (209) 46

Interest expense (98) (1,215) 1,117 (167) (2,170) 2,003

Other expense (603) (552) (51)

Total other expense (685) (1,631) 946

Other income (expense) 251 (544) 795 (352) (1,096) 744

Total other income (expense) 3 (1,844) 1,847 (682) (3,475) 2,793

Income before income taxes 16,927 12,534 4,393 32,516 21,248 11,268

4 unchanged sentences

The following table sets forth a reconciliation of net income attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

19 unchanged sentences

________________________________________________________

(1) Includes the following item for the three months ended March 31, 2023:

Railroad severance expense of $1,288.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) equity-based compensation of $1 and $1, (ii) provision for income taxes of $4 and $1, (iii) interest expense of $— and $2, (iv) depreciation and amortization expense of $18 and $10, (v) interest and other costs on pension and OPEB liabilities of $2 and $1 and (vi) other non-recurring items of $— and $3, respectively.

Total revenues increased $5.3 million during the three months ended March 31, 2024 primarily due to both an increase in carloads and rates per car.

Total expenses decreased $0.6 million during the three months ended March 31, 2024, which primarily reflects a decrease in operating expenses of $0.4 million mainly due to lower fuel costs.

Other expense

Total other expense decreased $0.9 million during the three months ended March 31, 2024, which primarily reflects a decrease in interest expense related to the revolver entered into in the fourth quarter of 2022 and paid off in the third quarter of 2023.

(1) Includes the following item for the three and six months ended June 30, 2023:

Railroad severance expense of $51 and $1,339, respectively.

(2) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) equity-based compensation of $1 and $—, (ii) provision for income taxes of $3 and $—, (iii) interest expense of $1 and $3, (iv) depreciation and amortization expense of $16 and $12, (v) acquisition and transaction expense of $1 and $—, (vi) interest and other costs on pension and OPEB liabilities of $— and $1 and (vii) asset impairment of $— and $2, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) equity-based compensation of $2 and $1, (ii) provision for income taxes of $7 and $1, (iii) interest expense of $1 and $5, (iv) depreciation and amortization expense of $34 and $22, (v) acquisition and transaction expense of $1 and $—, (vi) interest and other costs on pension and OPEB liabilities of $2 and $2, (vii) asset impairment of $— and $2 and (viii) other non-recurring items of $— and $3, respectively.

Total revenues increased $3.1 million and $8.4 million during the three and six months ended June 30, 2024, respectively, primarily due to both an increase in carloads and rates per car.

Total expenses increased $0.5 million during the three months ended June 30, 2024, which primarily reflects an increase in operating expenses of $1.4 million mainly due to increased car loads, partially offset by impairment of $0.6 million for certain scrap assets in 2023.

Other income (expense)

Total other income increased $1.8 million and $2.8 million during the three and six months ended June 30, 2024, respectively, which primarily reflects a decrease in interest expense related to the revolver entered into in the fourth quarter of 2022 and paid off in the third quarter of 2023, and decrease in other expense related to pension and OPEB benefits due to favorable adjustments.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $4.5 million during the three months ended March 31, 2024 primarily due to the activity noted above.

Adjusted EBITDA increased $1.8 million and $6.3 million during the three and six months ended June 30, 2024, respectively, primarily due to the activity noted above.

Jefferson Terminal Segment

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

6 unchanged sentences

Total expenses 30,283 28,170 2,113 61,747 56,464 5,283

Other (expense) income

Other income (expense)

Gain on sale of assets, net — 732 (732) — 732 (732)

Loss on modification or extinguishment of debt (9,170) — (9,170) (9,170) — (9,170)

Interest expense (11,190) (7,978) (3,212) (20,487) (15,862) (4,625)

Other income (expense) 3,531 (349) 3,880 3,537 (1,412) 4,949

Total other expense (9,291) (8,947) (344)

Total other income (expense) (16,829) (7,595) (9,234) (26,120) (16,542) (9,578)

Loss before income taxes (25,938) (18,661) (7,277) (48,077) (36,810) (11,267)

2 unchanged sentences

Net loss attributable to non-controlling interest in consolidated subsidiaries (11,174) (10,048) (1,126) (21,639) (19,233) (2,406)

Net loss attributable to stockholders $ (11,120) $ (9,162) $ (1,958)

The following table sets forth a reconciliation of net loss attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Net income (loss) attributable to stockholders $ (14,152) $ (8,765) $ (5,387) $ (25,272) $ (17,927) $ (7,345)

The following table sets forth a reconciliation of net income (loss) attributable to stockholders to Adjusted EBITDA:

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

Net loss attributable to stockholders $ (11,120) $ (9,162) $ (1,958)

Net income (loss) attributable to stockholders $ (14,152) $ (8,765) $ (5,387) $ (25,272) $ (17,927) $ (7,345)

(Benefit from) provision for income taxes (612) 152 (764) (1,166) 350 (1,516)

17 unchanged sentences

________________________________________________________

(1) Includ es the following items for the three months ended March 31, 2024 and 2023:

(i) depreciation and amortization expense of $12,330 and $11,869 and (ii) capitalized contract costs amortization of $576 and $—.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) equity-based compensation of $412 and $102, (ii) (benefit from) provision for income taxes of $(130) and $46, (iii) interest expense of $2,180 and $1,823 and (iv) depreciation and amortization expense of $3,027 and $2,744, respectively.

Total revenues decreased $0.5 million during the three months ended March 31, 2024 due to a decrease in average crude oil throughput volumes.

Total expenses increased $3.2 million during the three months ended March 31, 2024 which primarily reflects:

• an increase in operating expenses of $2.7 million primarily due to costs associated with stock-based compensation, insurance, higher labor and other costs associated with increased terminal throughput activity;

(1) Includ es the following items for the three months ended June 30, 2024 and 2023:

(i) depreci ation and amortization expense of $12,300 and $12,144 and (ii) capitalized contract costs amortization of $1,433 and $—, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) depreciation and amortization expense of $24,630 and $24,013 and (ii) capitalized contract costs amortization of $2,009 and $—, respectively.

(2) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) equity-based compe nsation of $259 and $71, (ii) (benefit from) provision for income taxes of $(143) and $35, (iii) interest expense of $2,623 and $1,844, (iv) depreciation and amortization expense of $3,219 and $2,808, (v) acquisition and transaction expense of $2 and $8 and (vi) loss on modification or extinguishment of debt of $2,150 and $—, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) equity-based compensation of $671 and $173, (ii) (benefit from) provision for income taxes of $(273) and $81, (iii) interest expense of $4,803 and $3,667, (iv) depreciation and amortization expense of $6,246 and $5,552, (v) acquisition and transaction expense of $2 and $8 and (vi) loss on modification or extinguishment of debt of $2,150 and $—, respectively.

Total revenues increased $4.1 million and $3.6 million during the three and six months ended June 30, 2024, respectively, due to an increase in average crude oil throughput volumes.

Total expe nses increased $2.1 million during the three months ended June 30, 2024 which primarily reflects:

• an increase in operating expenses of $2.0 million primarily due to costs associated with stock-based compensation, as well as insurance and higher labor and other costs associated with increased terminal throughput activity;

• an increase in depreciation and amortization of $0.2 million due to additional assets being placed into service.

Other expense

Total other expense increased $0.3 million during the three months ended March 31, 2024, which primarily reflects an increase in interest expense of $1.4 million due to a reduction in capitalized interest, partially offset by a benefit of $1.1 million from the decrease in prior period losses related to the termination of a pipeline contract.

Total expenses increased $5.3 million during the six months ended June 30, 2024 which primarily reflects:

• an increase in operati ng expenses of $4.7 million primarily due to costs associated with stock-based compensation, as well as insurance and higher labor and other costs associated with increased terminal throughput activity;

• an increase in depreciation and amortization of $0.6 million due to additional assets being placed into service.

Other income (expense)

Total other expense increased $9.2 million during the three months ended June 30, 2024, which primarily reflects a $9.2 million loss on modification or extinguishment of debt, an increase in interest expense of $3.2 million related to additional borrowings during the quarter and a $0.7 million gain on sale of land recognized in the prior year, partially offset by a $3.5 million gain from the grant of a pipeline easement.

Total other expense increased $9.6 million during the six months ended June 30, 2024 which primarily reflects a $9.2 million loss on modification or extinguishment of debt, an increase in interest expense of $4.6 million related to additional borrowings during the quarter and a $0.7 million gain on sale of land recognized in the prior year , partially off set by a $3.5 million gain from the grant of a pipeline easemen t and a $1.1 million benefit from the decrease in prior period losses related to the termination of a pipeline contract .

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $0.3 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Adjusted EBITDA increased $5.2 million and $5.5 million during the three and six months ended June 30, 2024, respectively, primarily due to the changes noted above.

Repauno Segment

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

14 unchanged sentences

The following table sets forth a reconciliation of net loss attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

18 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2024 an d 2023:

(i) equity-based compensation of $18 and $7, (ii) (benefit from) provision for income taxes of $(8) and $6, (iii) interest expense of $9 and $32, (iv) depreciation and amortization expense of $149 and $122 and (v) changes in fair value of non-hedge derivative instruments of $— and $61, respectively.

Total revenue increased $5.5 million during the three months ended March 31, 2024 primarily due to (i) the commencement of a butane throughput contract at Repauno in April 2023, as well as (ii) losses in the prior year related to the sale of butane inventory as the terminal prepared for the new throughput contract.

Total expenses increased $1.4 million during the three months ended March 31, 2024, which primarily reflects higher operating expenses due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site.

(1) I ncludes the following items for the three months ended June 30, 2024 and 2023:

(i) equity-based compensation of $8 and $5, (ii) (benefit from) provision for income taxes of $(2) and $—, (iii) interest expense of $15 and $33 and (iv) depreciation and amortization expense of $152 and $124, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) equity-bas ed compensation of $26 and $12, (ii) (benefit from) provision for income taxes of $(10) and $6, (iii) interest expense of $24 and $65, (iv) depreciation and amortization expense of $301 and $246 and (v) changes in fair value of non-hedge derivative instruments of $— and $61, respectively.

Total revenue did not change significantly during the three months ended June 30, 2024.

Total revenue increased $5.4 million during the six months ended June 30, 2024 primarily due to (i) the commencement of a butane throughput contract in April 2023, as well as (ii) losses in the prior year related to the sale of butane inventory as the terminal prepared for the new throughput contract.

Total expenses did not change significantly during the three months ended June 30, 2024.

Total expenses increased $1.5 million during the six months ended June 30, 2024 which primarily reflects higher operating expenses due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site.

Other expense

Total other expense decreased $0.4 million during the three months ended March 31, 2024, which reflects an increase in capitalized interest, partially offset by an increase in interest expense due to an increase in the borrowing amount on the revolver, amended in December 2023.

Total other expense decreased $0.4 million and $0.8 million during the three and six months ended June 30, 2024, respectively, which reflects an increase in capitalized interest, partially offset by an increase in interest expense due to an increase in the borrowing amount on the revolver, amended in December 2023.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $3.2 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Adjusted EBITDA increased $0.1 million and and $3.3 million during the three and six months ended June 30, 2024, respectively, primarily due to the changes noted above.

Power and Gas Segment

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

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The following table sets forth a reconciliation of net (loss) income attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

18 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net (loss) income of $(7,053) and $7,761, (ii) interest expense of $9,210 and $7,234, (iii) depreciation and amortization expense of $4,449 and $5,340, (iv) acquisition and transaction expenses of $19 and $20, (v) changes in fair value of non-hedge derivative instruments of $2,053 and $(9,847), (vi) equity-based compensation of $1 and $1, (vii) asset impairment of $87 and $— and (viii) equity method basis adjustments of $16 and $—, respectively.

Total expenses increased $0.2 million during the three months ended March 31, 2024, which primarily relates to an increase in professional fees.

(1) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) net (loss) income of $(7,353) and $1,639, (ii) interest expense of $9,465 and $7,378, (iii) depreciation and amortization expense of $7,359 and $7,641, (iv) acquisition and transaction expenses of $31 and $237, (v) changes in fair value of non-hedge derivative instruments of $(3,875) and $(7,963), (vi) equity-based compensation of $1 and $1, (vii) asset impairment of $163 and $—, (viii) equity method basis adjustments of $16 and $— and (ix) other non-recurring items of $478 and $—, respectively.

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) net (loss) income of $(14,406) and $9,400, (ii) interest expense of $18,675 and $14,612, (iii) depreciation and amortization expense of $11,808 and $12,981, (iv) acquisition and transaction expenses of $50 and $257, (v) changes in fair value of non-hedge derivative instruments of $(1,822) and $(17,810), (vi) equity-based compensation of $2 and $2, (vii) asset impairment of $250 and $—, (viii) equity method basis adjustments of $32 and $— and (ix) other non-recurring items of $478 and $—, respectively.

Total expenses increased $0.5 million and $0.8 million during the three and six months ended June 30, 2024, respectively, which primarily relates to an increase in professional fees.

Other (expense) income

Total other expense increased $13.7 million during the three months ended March 31, 2024 which reflects:

Total other expense increased $7.7 million during the three months ended June 30, 2024 which reflects:

• an increase in equity in losses of unconsolidated entities of $9.0 million, primarily due to decrease in unrealized gains on power swaps at Long Ridge;

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• an increase in other income of $1.2 million due to interest income from an increased loan balance under the loan agreement between the Company and Long Ridge Energy & Power LLC.

Total other expense increased $21.4 million during the six months ended June 30, 2024 which reflects:

• an increase in equity in losses of unconsolidated entities of $23.8 million, primarily due to decrease in unrealized gains on power swaps at Long Ridge;

partially offset by

• an increase in other income of $2.3 million due to interest income from an increased loan balance under the loan agreement between the Company and Long Ridge Energy & Power LLC.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $0.9 million during the three months ended March 31, 2024 due to a decrease in the pro-rata share of adjusted EBITDA from unconsolidated entities of $1.7 million and the changes noted above.

Adjusted EBITDA decreased $1.6 million and $2.5 million during the three and six months ended June 30, 2024, respectively, due to a decrease in the pro-rata share of adjusted EBITDA from unconsolidated entities of $2.6 million and $4.4 million, respectively, and the changes noted above.

Sustainability and Energy Transition Segment

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

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The following table sets forth a reconciliation of net loss attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

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________________________________________________________

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(1) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) net loss of $(5,463) and $(3,280), (ii) interest expense of $1,705 and $914 and (iii) depreciation and amortization expense of $691 and $326, respectively .

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) net loss of $(10,337) and $(6,699), (ii) interest expense of $3,379 and $1,691 and (iii) depreciation and amortization expense of $1,372 and $652, respectively.

Other expense

Total other expense increased $1.4 million during the three months ended March 31, 2024, which reflects changes in equity in losses of unconsolidated entities primarily due to higher operating losses at GM-FTAI Holdco LLC.

Total other expense increased $2.5 million and $3.9 million during the three and six months ended June 30, 2024, respectively, which reflects changes in equity in losses of unconsolidated entities primarily due to higher operating losses at GM-FTAI Holdco LLC.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $0.1 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Adjusted EBITDA decreased $1.3 million and $1.5 million during the three and six months ended June 30, 2024, respectively, primarily due to the changes noted above.

Corporate and Other

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

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Loss before income taxes (24,050) (22,571) (1,479) (51,669) (43,835) (7,834)

Provision for income taxes 1,403 819 584

(Benefit from) provision for income taxes (188) (89) (99) 1,215 730 485

Net loss (23,862) (22,482) (1,380) (52,884) (44,565) (8,319)

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The following table sets forth a reconciliation of net loss attributable to stockholders to Adjusted EBITDA:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2024 2023 2024 2023

Net loss attributable to stockholders $ (41,472) $ (37,738) $ (3,734) $ (87,469) $ (74,163) $ (13,306)

Provision for income taxes 1,403 819 584

(Benefit from) provision for income taxes (188) (89) (99) 1,215 730 485

Equity-based compensation expense 274 80 194 274 80 194

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Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)

(10) (7) (3) (16) (10) (6)

Dividends and accretion of redeemable preferred stock 17,610 15,257 2,353 34,585 29,827 4,758

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Non-controlling share of Adjusted EBITDA (2)

— — — — (260) 260

Adjusted EBITDA (non-GAAP) $ (4,753) $ (7,028) $ 2,275 $ (12,831) $ (13,544) $ 713

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(1) Includes the following items for the three months ended June 30, 2024 and 2023:

(i) net loss of $(22) and $(19) and (ii) interest expense of $12 and $12, respectively.

(2) Includes the following item for the three months ended March 31, 2024 and 2023:

(i) depreciation and amortization expense of $— and $260.

Total revenues decreased $4.3 million during the three months ended March 31, 2024 primarily due to a decrease in roadside services at FYX.

Total expenses decreased $2.2 million during the three months ended March 31, 2024 which primarily reflects:

Includes the following items for the six months ended June 30, 2024 and 2023:

(i) net loss of $(37) and $(43) and (ii) interest expense of $21 and $33, respectively.

(2) Includes the following item for the six months ended June 30, 2023:

(i) depreciation and amortization expense of $260.

Total revenues decreased $4.0 million and $8.3 million during the three and six months ended June 30, 2024, respectively, primarily due to a decrease in roadside services at FYX.

Total expenses decreased $6.3 million during the three months ended June 30, 2024 which primarily reflects:

• a decrease in operating expenses of $4.9 million due to a decrease in roadside services at FYX;

• a decrease in depreciation and amortization expense of $0.2 million due to assets that became fully depreciated;

• a decrease in general and administrative expenses of $0.9 million primarily due to lower professional fees.

Total expenses decreased $8.6 million during the six months ended June 30, 2024 which primarily reflects:

• a decrease in operating expenses of $9.3 million due to a decrease in roadside services at FYX;

• a decrease in depreciation and amortization expense of $0.4 million due to assets that became fully depreciated;

partially offset by

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Other expense

Total other expense increased $4.3 million during the three months ended March 31, 2024, which primarily reflects an increase in interest expense due to the additional issuance of the Senior Notes due 2027 in July 2023.

Total other expense increased $3.8 million and $8.1 million during the three and six months ended June 30, 2024, respectively, which primarily reflects an increase in interest expense due to the additional issuance of the Senior Notes due 2027 in July 2023.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $1.6 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Adjusted EBITDA increased $2.3 million and $0.7 million during the three and six months ended June 30, 2024, respectively, primarily due to the changes noted above.

Liquidity and Capital Resources

The liquidity required to fund our working capital, capital expenditures and other cash needs is provided from a combination of internally generated cash flows and external debt financing.

On April 2, 2024, Jefferson Terminal entered into a credit agreement, providing for a $75.0 million term loan facility, which matures at the earlier of (i) December 13, 2024 or (ii) 30 days prior to the date on which the first cash dividend payment on

preferred equity is paid, and bears interest at the Applicable Margin of 4.00% plus Adjusted Term SOFR.

The proceeds will be used for general corporate purposes.

As discussed in Note 2 to the consolidated financial statements, in performing the first step of the evaluation under ASC 205-40, management concluded that the Company’s current liquidity and forecasted cash flows from operations are not sufficient to support, in full, the repayments of Jefferson Terminal’s $75.0 million credit agreement due on December 13, 2024 and Taxable Series 2020B Bonds totaling $79.1 million that mature on January 1, 2025 and dividend payments on Series A Preferred Stock.

In performing the second step of this assessment, the Company evaluated whether it is probable that the Company’s plans will be effectively implemented within one year after the financial statements are issued and whether it is probable that those plans will alleviate the liquidity risk raised in the first step of the evaluation.

Management has approved and began implementing a plan to alleviate liquidity risk by:

(i) refinancing the Taxable Series 2020B Bonds and issuing new long-term, low-cost municipal bonds, including contributing additional unencumbered assets as collateral;

and (ii) continuing to accrue paid-in-kind dividends on its Series A Senior Preferred Stock.

On May 10, 2024, Jefferson Terminal announced an approximately $276 million municipal bond offering, and expects to close the offering in the coming weeks.

If fully implemented, the Company will have sufficient liquidity to meet its obligations as they become due over the next twelve months from the date that the consolidated financial statements were issued.

In addition to the plans discussed above, we are currently evaluating several potential transactions and related financings, including, but not limited to, asset sales, debt refinancing, equity refinancing, and providing for increased debt capacity at certain of our subsidiaries, which could occur within the next 12 months.

None of these transactions, negotiations or financings are definitive or included within our assessment of our planned liquidity needs.

We cannot assure if or when any such transaction will be consummated or the terms of any such transaction.

We continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.

We believe we have sufficient liquidity to satisfy our cash needs;

however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.

This includes limiting discretionary spending across the organization and re-prioritizing our capital projects.

Our principal uses of liquidity have been and continue to be (i) acquisitions of and investments in infrastructure assets, (ii) expenses associated with our operating activities and (iii) debt service obligations associated with our investments.

• Cash used for the purpose of making investments was $18.9 million and $66.9 million during the three months ended March 31, 2024 and 2023, respectively.

• Cash used for the purpose of making investments was $52.8 million and $95.5 million during the six months ended June 30, 2024 and 2023, respectively.

• Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.

Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities.

Our principal sources of liquidity to fund these uses have been and continue to be (i) cash and restricted cash on hand as of March 31, 2024, (ii) revenues from our infrastructure business net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales.

• Cash flows used in operating activities were $3.9 million and $12.1 million during the three months ended March 31, 2024 and 2023, respectively.

• During the three months ended March 31, 2024, no additional borrowings were obtained and we did not make any principal repayments of debt.

During the three months ended March 31, 2023, additional borrowings were obtained in connection with the (i) Transtar Revolver of $40.0 million and (ii) EB-5 Loan Agreement of $1.6 million.

• Proceeds from the sale of assets were $— million a nd $0.1 million during the three months ended March 31, 2024 and 2023, respectively.

Our principal sources of liquidity to fund these uses have been and continue to be (i) cash and restricted cash on hand as of June 30, 2024, (ii) revenues from our infrastructure business net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales.

• Cash flows used in operating activities were $21.5 million and $16.9 million during the six months ended June 30, 2024 and 2023, respectively.

• During the six months ended June 30, 2024, additional borrowings were obtained in connection with the (i) Jefferson Credit Agreement of $75.0 million and (ii) Series 2024 Bond Offering of $382.3 million.

In June 2024, we used a portion of the net proceeds from the Series 2024 Bonds to (i) repay the Jefferson Credit Agreement of $75.0 million, (ii) fund the $108.0 million for the Tender Offer and (iii) refinance the Taxable Series 2020B Bonds of $79.1 million during the six months ended June 30, 2024.

During the six months ended June 30, 2023, additional borrowings were obtained in connection with the (i) Transtar Revolver of $40.0 million, (ii) Credit Agreement of $25.0 million and (iii) EB-5 Loan Agreement of $1.6 million.

We did not make any principal repayments of debt during the six months ended June 30, 2023.

• Proceeds from the sale of assets were $0.1 million and $1.1 million during the six months ended June 30, 2024 and 2023, respectively.

We are currently evaluating several potential transactions and related financings, including, but not limited to, providing for increased debt capacity at certain of our subsidiaries, which could occur within the next 12 months.

None of these transactions, negotiations or financings are definitive or included within our planned liquidity needs.

We cannot assure if or when any such transaction will be consummated or the terms of any such transaction.

Historical Cash Flow

Comparison of the three months ended March 31, 2024 and 2023

The following table compares the historical cash flow for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

Comparison of the six months ended June 30, 2024 and 2023

The following table compares the historical cash flow for the six months ended June 30, 2024 and 2023:

Six Months Ended June 30,

(in thousands) 2024 2023

2 unchanged sentences

Net cash used in investing activities (52,652) (94,356)

Net cash (used in) provided by financing activities (454) 37,777

Net cash used in operating activities decreased $8.3 million, which primarily reflects certain adjustments to reconcile net loss to cash used in operating activities including (i) equity in losses of unconsolidated entities of $16.3 million, (ii) changes in working capital of $4.9 million, (iii) changes in depreciation and amortization of $0.4 million, (iv) changes in equity-based compensation of $1.4 million and (v) changes in amortization of deferred financing costs of $0.5 million, partially offset by (i) an increase in our net loss of $14.4 million and (ii) changes in fair value of non-hedge derivatives of $1.1 million.

Net cash used in investing activities decreased $48.0 million, primarily due to (i) a decrease in the acquisition of property, plant and equipment of $27.0 million and (ii) a decrease in the investment in promissory notes and loans of $20.5 million.

Net cash used in financing activities increased $38.2 million, primarily due to (i) a decrease in proceeds from debt of $41.6 million and (ii) a decrease in settlement of equity-based compensation of $0.1 million, partially offset by (i) a decrease in cash dividends paid of $3.1 million and (ii) a decrease in payment of deferred financing costs of $0.4 million.

Net cash provided by financing activities 173,108 59,128

Net cash used in operating activities increased $4.5 million, which primarily reflects certain adjustments to reconcile net loss to cash used in operating activities including (i) an increase in net loss of $28.7 million and (ii) changes in working capital of $16.4 million, partially offset by (i) an increase in equity in losses of unconsolidated entities of $27.4 million, (ii) an increase in equity-based compensation of $2.6 million, (iii) an increase in amortization of deferred financing costs of $1.5 million and (iv) an increase in loss on modification or extinguishment of debt of $9.2 million.

Net cash used in investing activities decreased $41.7 million, primarily due to (i) a decrease in the acquisition of property, plant and equipment of $38.3 million and (ii) a decrease in the acquisition of consolidated subsidiaries of $4.4 million, partially offset by a decrease in proceeds from the sale of property, plant and equipment of $0.9 million.

Net cash provided by financing activities increased $114.0 million, primarily due to (i) an increase in proceeds from debt of $383.1 million, partially offset by (i) an increase in repayment of debt of $242.0 million, (ii) an increase in settlement of equity-based compensation of $3.1 million, (iii) an increase in distributions to non-controlling int erests of $15.0 million and (iv) an increase in payment of financing costs of $8.8 million.

Debt Obligations

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Our material cash requirements include the following contractual and other obligations:

Debt Obligations — As of March 31, 2024, we had outstanding principal and interest payment obligations of $1.4 billion and $0.5 billion, respectively, of which, $79.1 million and $90.1 million, respectively, are due within the next twelve months.

Debt Obligations — As of June 30, 2024, we had outstanding principal and interest payment obligations of $1.6 billion and $0.6 billion, respectively, of which, there is no principal payment due and $106.4 million of interest payments due within the next twelve months.

See Note 7 to the consolidated financial statements for additional information about our debt obligations.

Lease Obligations —As of March 31, 2024, we had outstanding operating and finance lease obligations of $166.5 million, of which $8.2 million is due within the next twelve months.

Redeemable Preferred Stock Obligations —We have dividend payments of $38.6 million due on our redeemable preferred stock within the next twelve months with an option to paid-in-kind dividends at a higher interest rate and to defer payment for twelve months.

Lease Obligations —As of June 30, 2024, we had outstanding operating and finance lease obligations of $164.9 million, of which $8.3 million is due within the next twelve months.

Redeemable Preferred Stock Obligations —We have dividend payment s of $60.9 million due on our redeemable preferred stock within the next twelve months with an option to paid-in-kind dividends at a higher interest rate and to defer payment for twelve months.

See Note 15 for additional information related to our preferred stock obligations.

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Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required.

See Note 2 for additional information related to other cash requirements.

Critical Accounting Estimates and Policies

17 unchanged sentences

If the forecasted cash flows or other key inputs are negatively revised in the future, the estimated fair value of the reporting unit could be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results.

The Jefferson Terminal reporting unit had an

estimated fair value that exceeded its carrying value by more than 10% but less than 20% as of October 1, 2023.

The Jefferson Terminal reporting unit forecasted revenue is dependent on the ramp up of volumes under current and expected future contracts for storage and throughput of heavy and light crude and refined products, expansion of refined product distribution to Mexico, expansion of volumes and execution of contracts related to sustainable fuels and movements in future oil spreads.

The Jefferson Terminal reporting unit had an estimated fair value that exceeded its carrying value by more than 10% but less than 20% as of October 1, 2023.

expansion of volumes and execution of contracts related to sustainable fuels and movements in future oil spreads.

At October 1, 2023, approximately 6.2 million barrels of storage was operational.

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis