What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-13 compared with 2024-03-27 · 141 added, 143 removed, 549 unchanged (34% of the section changed)

27 unchanged sentences

During the first quarter of 2023, we modified our definition of Adjusted EBITDA to exclude the impact of other non-recurring items, such as severance expense.

All segment data and related disclosures for earlier periods presented herein have been recast to reflect the new segment reporting structure.

All segment data and related disclosures for earlier periods presented herein have been recast to reflect this segment reporting structure.

Our reportable segments represent strategic business units comprised of investments in different types of infrastructure assets.

3 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 or Former Parent, 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.

We believe that net income (loss) attributable to stockholders, as defined by U.S.

GAAP, is the most appropriate earnings measure with which to reconcile Adjusted EBITDA.

Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to stockholders as determined in accordance with U.S.

The following table presents our consolidated and combined consolidated results of operations:

17 unchanged sentences

Gain (loss) on sale of assets, net 2,370 6,855 (1,603) (4,485) 8,458

Loss on extinguishment of debt (2,036) — — (2,036) —

Loss on modification or extinguishment of debt (8,925) (2,036) — (6,889) (2,036)

Interest expense (122,108) (99,603) (53,239) (22,505) (46,364)

2 unchanged sentences

Loss before income taxes (262,751) (157,280) (183,049) (105,471) 25,769

Provision for (benefit from) income taxes 2,470 4,468 (3,630) (1,998) 8,098

Provision for income taxes 3,313 2,470 4,468 843 (1,998)

Net loss (266,064) (159,750) (187,517) (106,314) 27,767

6 unchanged sentences

Net loss attributable to stockholders/Former Parent $ (294,459) $ (183,736) $ (177,241) $ (110,723) $ (6,495)

Provision for (benefit from) income taxes 2,470 4,468 (3,630) (1,998) 8,098

Provision for income taxes 3,313 2,470 4,468 843 (1,998)

Equity-based compensation expense 8,636 9,199 4,146 (563) 5,053

21 unchanged sentences

(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022:

(i) net loss of $(23,752), $(67,658) and $(11,838), (ii) interest expense of $34,686, $28,702 and $5,611, (iii) depreciation and amortization expense of $27,685, $28,399 and $12,443, (iv) acquisition and transaction expense of $445, $616 and $104, (v) changes in fair value of non-hedge derivative instruments of $(18,904), $21,218 and $19,850, (vi) asset impairment of $1,135, $2,280 and $2,146, (vii) equity-based compensation of $5, $382 and $779 and (viii) equity method basis adjustments of $(1,091), $— and $—, respectively.

(i) net loss of $(55,656), $(23,752) and $(67,658), (ii) interest expense of $43,549, $34,686 and $28,702, (iii) depreciation and amortization expense of $28,115, $27,685 and $28,399, (iv) acquisition and transaction expenses of $209, $445 and $616, (v) changes in fair value of non-hedge derivative instruments of $(1,488), $(18,904) and $21,218, (vi) asset impairment of $274, $1,135 and $2,280, (vii) equity-based compensation of $2, $5 and $382, (viii) loss on modification or extinguishment of debt of $4,724, $— and $—, (ix) equity method basis adjustments of $65, $(1,091) and $— and (x) other non-recurring items of $478, $— and $—, respectively.

(3) Includes the following items for the year ended December 31, 2023:

certain non-cash expenses related to cancellation of restricted shares and Railroad severance expense of $2,470.

certain non-cash expenses related to the cancellation of restricted shares and Railroad severance expense of $2,470.

(4) Includes the following items for the years ended December 31, 2024, 2023 and 2022:

(i) equity-based compensation of $1,412, $470 and $751, (ii) provision for income taxes of $578, $670 and $52, (iii) interest expense of $7,391, $5,491 and $3,370, (iv) depreciation and amortization expense of $11,752, $9,699 and $8,411, (v) changes in fair value of non-hedge derivative instruments of $63, $(53) and $(76), (vi) acquisition and transaction expenses of $307, $1 and $—, (vii) interest and other costs on pension and OPEB liabilities of $6, $1, and $—, (viii) asset impairment of $2, $— and $— and (ix) other recurring items of $4, $— and $— respectively.

(i) equity-based compensation of $1,127, $1,412 and $470, (ii) (benefit from) provision for income taxes of $(510), $578 and $670, (iii) interest expense of $11,555, $7,391 and $5,491, (iv) depreciation and amortization expense of $12,930, $11,752 and $9,699, (v) changes in fair value of non-hedge derivative instruments of $—, $63 and $(53), (vi) acquisition and transaction expenses of $7, $307 and $1, (vii) interest and other costs on pension and OPEB liabilities of $(1), $6, and $1, (viii) asset impairment of $—, $2 and $—, (ix) loss on modification or extinguishment of debt of $2,086, $— and $— and (x) other non-recurring items of $—, $4 and $—, respectively.

Comparison of the years ended December 31, 2024 and 2023

Total revenues increased $11.0 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Repauno segments.

• Rail revenue increased $10.5 million due to an increase in both carloads and rates per car;

• Terminal services revenue increased $9.9 million due to higher throughput volumes at Jefferson Terminal and the commencement of a butane throughput contract at Repauno in April 2023;

partially offset by

• Roadside services revenue decreased $13.2 million due to a decrease in roadside services at FYX.

Total expenses decreased $66.1 million primarily due to a decrease in (i) operating expenses, (ii) depreciation and amortization and (iii) asset impairment, offset by an increase in (iv) general and administrative expense and (v) acquisition and transaction expenses.

Operating expenses decreased $6.0 million primarily due to:

• a decrease of $15.6 million in the Corporate and Other segment primarily due to a decrease in roadside services at FYX;

partially offset by

• an increase of $4.2 million in the Railroad segment primarily due to increased carloads;

• an increase of $1.3 million at Repauno which primarily reflects an increase in compensation and benefits due to costs associated with equity-based compensation, as well as an increase in labor costs and professional fees related to the continued development of the site;

• an increase of $4.6 million at Jefferson Terminal which primarily reflects an increase in costs associated with equity-based compensation, as well as higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity.

Depreciation and amortization decreased $1.6 million which primarily reflects certain assets becoming fully depreciated at the Jefferson Terminal and Corporate and Other segments.

Asset impairment increased $71.6 million due to the impairment of our investment in GM-FTAI Holdco LLC in the Sustainability and Energy Transition segment, partially offset by certain scrap assets that were written off in 2023 in the Railroad segment.

General and administrative increased $2.0 million primarily due to higher professional fees in the Corporate and Other segment.

Acquisition and transaction expenses increased $1.3 million primarily due to increased consulting fees in the Power and Gas segment.

Other (expense) income

Total other expense increased $50.4 million which primarily reflects:

• an increase in equity in losses of unconsolidated entities of $30.8 million which primarily reflects a decrease in unrealized gains on power swaps at Long Ridge Energy & Power LLC, as well as higher operating losses at GM-FTAI Holdco LLC in the Sustainability and Energy Transition segment;

• a decrease in gain on the sale of assets of $4.5 million primarily due to a gain recognized at Jefferson Terminal, offset by a loss recognized in the Railroad segment;

• an increase in interest expense of $22.5 million primarily due to an increase in the average outstanding debt of approximately $178.4 million which consists of (i) $49.1 million for the Senior Notes due 2027, (ii) $17.6 million for the DRP Revolver and (iii) $136.6 million for the Series 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 $6.9 million at Jefferson Terminal;

• an increase in other income of $14.3 million primarily due to (i) interest income from an increased loan balance under the loan agreement between the Company and Long Ridge Energy & Power LLC, (ii) pension and OPEB benefits due to favorable adjustments in the Railroad segment and (iii) a benefit from the decrease in prior period losses related to the termination of a pipeline contract at Jefferson Terminal.

Dividends and accretion of redeemable preferred stock

Dividends and accretion of redeemable preferred stock increased $8.4 million due to continued accretion of our redeemable preferred stock balance for the year.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $20.1 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $58.5 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Corporate and Other segments.

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• an increase in gain on the sale of assets of $8.5 million due to a gain on a sales-type lease and a gain from the sale of land at Jefferson Terminal;

• an increase in other income of $9.8 million primarily due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC;

• an increase in other income of $9.8 million primarily due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy & Power LLC;

partially offset by

5 unchanged sentences

Adjusted EBITDA increased $46.5 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $141.7 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Corporate and Other segments.

• Rail revenue increased $86.3 million due to the acquisition of Transtar in July 2021;

• Terminal services revenue increased $14.5 million due to higher volumes at Jefferson Terminal;

• Roadside services revenue increased $47.9 million due to the acquisition of a majority stake and consolidation of FYX in May 2022;

partially offset by

• Other revenue decreased $7.8 million primarily due to a loss on butane forward purchase contracts and margin compression at Repauno.

Total expenses increased $127.8 million primarily due to increases in operating expenses and depreciation and amortization.

Operating expenses increased $109.6 million primarily due to:

• an increase of $48.9 million in the Corporate and Other segment primarily due to the acquisition of a majority stake and consolidation of FYX in May 2022;

• an increase of $49.0 million in the Railroad segment due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expenses;

• an increase of $2.8 million at Repauno which primarily reflects increased activity;

• an increase of $8.2 million at Jefferson Terminal which primarily reflects additional labor costs due to increased activity as well as higher insurance for the new Jefferson Terminal South property.

Depreciation and amortization increased $16.7 million which primarily reflects (i) additional assets placed into service at Jefferson Terminal and (ii) the acquisition of Transtar in July 2021.

Other (expense) income

Total other expense increased $87.0 million which primarily reflects:

• an increase in equity in losses of unconsolidated entities of $53.9 million which primarily reflects unrealized losses on power swaps at Long Ridge;

• an increase in interest expense of $37.2 million which reflects an increase in the average outstanding debt of approximately $198.0 million from the 2027 Notes issued in July 2022 as well as the new EB-5.3 Loan Agreement taken out at Jefferson Terminal;

partially offset by

• a decrease in other expense of $5.8 million primarily due to (i) a write-off of an earn-out receivable in 2021 related to the sale of a portion of our Long Ridge investment and (ii) an increase in interest income within the Sustainability and Energy Transition segment in 2022.

Provision for income taxes

The provision for income taxes increased $8.1 million which primarily reflects provisions booked in the Railroad and Jefferson Terminal segments.

Dividends and accretion of redeemable preferred stock

Dividends and accretion of redeemable preferred stock increased $23.7 million due to the redeemable preferred stock raise completed in August 2022.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $27.3 million primarily due to the changes noted above.

Railroad Segment

10 unchanged sentences

Total expenses 117,933 114,042 105,790 3,891 8,252

Other expense

Other (expense) income

Loss on sale of assets, net (704) (437) (1,603) (267) 1,166

1 unchanged sentence

Interest expense (306) (2,284) (212) 1,978 (2,072)

Other expense (2,164) (1,632) (422) (532) (1,210)

Other income (expense) 770 (2,164) (1,632) 2,934 (532)

Total other expense (240) (5,822) (3,447) 5,582 (2,375)

Income before income taxes 61,854 49,581 40,424 12,273 9,157

(Benefit from) provision for income taxes (561) 1,287 64 (1,848) 1,223

Provision for (benefit from) income taxes 4,692 (561) 1,287 5,253 (1,848)

Net income 57,162 50,142 39,137 7,020 11,005

5 unchanged sentences

Net income attributable to stockholders/Former Parent $ 56,917 $ 49,999 $ 39,122 $ 6,918 10,877

(Benefit from) provision for income taxes (561) 1,287 64 (1,848) 1,223

Provision for (benefit from) income taxes 4,692 (561) 1,287 5,253 (1,848)

Equity-based compensation expense 1,801 1,394 1,531 407 (137)

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(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022:

(i) equity-based compensation of $4, $2 and $—, (ii) (benefit from) provision for income taxes of $(1), $2 and $—, (iii) acquisition and transaction expenses of $1, $1 and $—, (iv) interest and other costs on pension and OPEB liabilities of $6, $1 and $—, (v) depreciation and amortization expense of $49, $19 and $—, (vi) interest expense of $6, $— and $—, (vii) asset impairment of $2, $— and $— and (viii) other recurring items of $4, $— and $—, respectively.

(i) equity-based compensation of $9, $4 and $2, (ii) provision for (benefit from) income taxes of $22, $(1) and $2, (iii) acquisition and transaction expenses of $2, $1 and $1, (iv) interest and other costs on pension and OPEB liabilities of $(1), $6 and $1, (v) depreciation and amortization expense of $88, $49 and $19, (vi) interest expense of $2, $6 and $—, (vii) asset impairment of $—, $2 and $— and (viii) other non-recurring items of $—, $4 and $—, respectively.

Comparison of the years ended December 31, 2024 and 2023

Total revenues increased $10.6 million which is primarily due to both an increase in carloads and rates per car.

Total expenses increased $3.9 million which is primarily due to the increase in operating expense of $4.2 million due to increased carloads, partially offset by a decrease in asset impairment of $0.7 million for certain scrap assets written off in 2023.

Other (expense) income

Total other expense decreased $5.6 million which primarily reflects a decrease in interest expense and loss on extinguishment of debt related to the revolver entered into in the fourth quarter of 2022 and paid off in the third quarter of 2023, as well as an increase in other income related to pension and OPEB benefits due to favorable adjustments.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $5.7 million due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $19.8 million which is primarily due to both an increase in (i) carloads and rates per car and (ii) a full year of fuel surcharges in 2023 compared to a partial year of fuel surcharges that went into effect at the beginning of the second quarter in 2022.

4 unchanged sentences

Adjusted EBITDA increased $14.2 million due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $87.4 million which is primarily due to the acquisition of Transtar on July 28, 2021.

Total expenses increased $58.2 million which is primarily due to the acquisition of Transtar on July 28, 2021.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $37.8 million due to the changes noted above.

Jefferson Terminal Segment

11 unchanged sentences

Gain on sale of assets, net 3,074 7,292 — (4,218) 7,292

Loss on modification or extinguishment of debt (8,925) — — (8,925) —

Interest expense (49,001) (32,443) (24,798) (16,558) (7,645)

Other expense (1,302) (4,317) (4,726) 3,015 409

Other income (expense) 5,515 (1,302) (4,317) 6,817 3,015

Total other expense (49,337) (26,453) (29,115) (22,884) 2,662

Loss before income taxes (87,789) (71,169) (64,625) (16,620) (6,544)

Provision for income taxes 2,468 3,016 229 (548) 2,787

(Benefit from) provision for income taxes (1,667) 2,468 3,016 (4,135) (548)

Net loss (86,122) (73,637) (67,641) (12,485) (5,996)

5 unchanged sentences

Net loss attributable to stockholders/Former Parent $ (44,631) $ (36,720) $ (35,623) $ (7,911) $ (1,097)

Provision for income taxes 2,468 3,016 229 (548) 2787

(Benefit from) provision for income taxes (1,667) 2,468 3,016 (4,135) (548)

Equity-based compensation expense 4,233 5,865 2,020 (1,632) 3,845

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(2) Includes the following items for the year ended December 31, 2023:

certain non-cash expenses related to cancellation of restricted shares of $1,131.

certain non-cash expenses related to the cancellation of restricted shares of $1,131.

(3) Includes the following items for the years ended December 31, 2024, 2023, and 2022:

(i) equity-based compensation of $1,309, $440 and $723, (ii) provision for income taxes of $551, $660 and $52, (iii) interest expense of $7,242, $5,416 and $3,331, (iv) acquisition and transaction expenses of $306, $— and $—, and (v) depreciation and amortization expense of $10,920, $8,587 and $8,099, respectively.

(i) equity-based compensation of $989, $1,309 and $440, (ii) (benefit from) provision for income taxes of $(506), $551 and $660, (iii) interest expense of $11,454, $7,242 and $5,416, (iv) acquisition and transaction expenses of $5, $306 and $—, (v) depreciation and amortization expense of $12,236, $10,920 and $8,587 and (vi) loss on modification or extinguishment of debt of $2,086, $— and $—, respectively.

Comparison of the years ended December 31, 2024 and 2023

Total revenues increased $11.9 million during the year ended December 31, 2023 primarily due to (i) an increase in terminal services revenues of $11.7 million due to an increase in average refined products throughput volumes and (ii) an increase in lease income of $0.2 million.

Total revenues increased $8.5 million during the year ended December 31, 2024 primarily due to (i) an increase in terminal services revenues of $6.8 million due to an increase in average crude oil throughput volumes and (ii) an increase in lease income of $1.7 million.

Total expenses increased $2.2 million which reflects:

• an increase in operating expenses of $4.6 million primarily due to costs associated with equity-based compensation, higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity;

• an increase in depreciation and amortization of $9.6 million due to additional assets placed into service;

• an increase in acquisition and transaction expenses of $1.3 million associated with professional fees for a potential acquisition.

• a decrease in depreciation and amortization of $1.0 million due to certain assets becoming fully depreciated;

• a decrease in acquisition and transaction expenses of $1.3 million associated with professional fees incurred in the prior year for a potential acquisition.

Other income (expense)

Total other expense decreased $2.7 million which primarily reflects (i) a benefit from the decrease in prior period losses related to the termination of a pipeline contract, (ii) a gain on the sales-type lease, and (iii) a gain from the sale of land, partially offset by an increase in interest expense due to additional borrowings for the EB-5 Loan Agreement.

Total other expense increased $22.9 million which primarily reflects (i) an $8.9 million loss on modification or extinguishment of debt, (ii) an increase in interest expense of $16.6 million related to additional borrowings during the current year and (iii) a $4.2 million decrease in gain on sale of assets, offset by an increase in other income of $6.8 million due to current year gains from the grant of a pipeline easement and sales leaseback transaction, as well as a benefit from the decrease in prior year losses related to the termination of a pipeline contract.

Adjusted EBITDA (Non-GAAP)

1 unchanged sentence

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $13.9 million during the year ended December 31, 2022 primarily due to an increase in terminal services revenues of $14.3 million due to higher volumes.

This increase was partially offset by a decrease in lease income of $0.4 million.

Total revenues increased $11.9 million primarily due to (i) an increase in terminal services revenues of $11.7 million due to an increase in average refined products throughput volumes and (ii) an increase in lease income of $0.2 million.

Total expenses increased $21.1 million which reflects:

• an increase in operating expenses of $8.2 million which primarily reflects additional labor costs due to increased activity as well as higher insurance for the new Jefferson Terminal South property;

• an increase in operating expenses of $10.2 million primarily due to costs associated with equity-based compensation, higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity ;

• an increase in depreciation and amortization of $9.6 million due to additional assets placed into service;

Other expense

Total other expense increased $9.6 million which primarily reflects an increase in interest expense driven by incurred interest on outstanding borrowings and additional borrowings made under the new EB-5.3 Loan Agreement.

• an increase in acquisition and transaction expenses of $1.3 million associated with professional fees for a potential acquisition.

Other income (expense)

Total other expense decreased $2.7 million which primarily reflects (i) a benefit from the decrease in prior period losses related to the termination of a pipeline contract, (ii) a gain on the sales-type lease and (iii) a gain from the sale of land, partially offset by an increase in interest expense due to additional borrowings for the EB-5 Loan Agreement.

Adjusted EBITDA (Non-GAAP)

11 unchanged sentences

Total expenses 33,397 31,539 26,394 1,858 5,145

Other income (expense)

Gain on sale of assets, net — — 16 — (16)

Other expense

Interest expense (1,617) (2,557) (1,590) 940 (967)

1 unchanged sentence

Loss before income taxes (19,190) (23,405) (23,867) 4,215 462

Provision for income taxes 496 165 — 331 165

(Benefit from) provision for income taxes (431) 496 165 (927) 331

Net loss (18,759) (23,901) (24,032) 5,142 131

5 unchanged sentences

Net loss attributable to stockholders/Former Parent $ (17,586) $ (22,489) $ (22,790) $ 4,903 $ 301

Provision for income taxes 496 165 — 331 165

(Benefit from) provision for income taxes (431) 496 165 (927) 331

Equity-based compensation expense 2,108 1,770 595 338 1,175

16 unchanged sentences

(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022:

(i) equity-based compensation of $99, $28 and $28, (ii) provision for income taxes of $28, $8 and $—, (iii) interest expense of $143, $75 and $39, (iv) depreciation and amortization expense of $523, $442 and $312, and (v) changes in fair value of non-hedge derivative instruments of $63, $(53) and $(76), respectively.

(i) equity-based compensation of $129, $99 and $28, (ii) (benefit from) provision for income taxes of $(26), $28 and $8, (iii) interest expense of $99, $143 and $75, (iv) depreciation and amortization expense of $606, $523 and $442, and (v) changes in fair value of non-hedge derivative instruments of $—, $63 and $(53), respectively.

Comparison of the years ended December 31, 2024 and 2023

Total revenues increased $5.1 million, primarily due to the commencement of a butane throughput contract in April 2023, partially offset by losses in the prior year related to the sale of butane inventory as the terminal prepared for the new throughput contract.

Total expenses increased $1.9 million primarily due to (i) an increase in operating expenses due to costs associated with stock-based compensation, (ii) an increase in depreciation expense due to assets being placed into service and (iii) an increase in labor costs and professional fees related to the continued development of the site.

Other expense

Total other expense decreased $0.9 million primarily due to 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 $2.9 million due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $6.6 million, primarily due to the commencement of a butane throughput contract at Repauno in April 2023, partially offset by losses on the sale of butane inventory as the terminal prepared for the new throughput contract.

4 unchanged sentences

Adjusted EBITDA increased $4.7 million due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues decreased $7.5 million, primarily due to a $3.7 million loss on butane forward purchase contracts as well as overall margin compression.

Total expenses increased $3.0 million primarily due to:

• an increase in operating expenses of $2.8 million due to increased terminal activity;

• an increase in depreciation expense of $0.3 million due to assets being placed into service.

Other (expense) income

Total other expense increased $0.5 million primarily due to an increase in interest expense for the period relating to the revolver loan.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $8.6 million due to the changes noted above.

Power and Gas Segment

10 unchanged sentences

Interest expense — (3) — 3 (3)

Other income (expense) 7,523 524 (3,782) 6,999 4,306

Other income 12,430 7,523 524 4,907 6,999

Total other expense (24,716) (2,429) (60,014) (22,287) 57,585

Loss before income taxes (5,249) (61,298) (17,478) 56,049 (43,820)

Benefit from income taxes — — (3,930) — 3,930

Net loss attributable to stockholders/Former Parent $ (29,199) $ (5,249) $ (61,298) $ (23,950) $ 56,049

3 unchanged sentences

Net loss attributable to stockholders/Former Parent $ (29,199) $ (5,249) $ (61,298) $ (23,950) $ 56,049

Benefit from income taxes — — (3,930) — 3,930

Provision for income taxes — — — — —

Equity-based compensation expense — — — — —

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(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022:

(i) net loss of $(8,858), $(60,538) and $(11,430), (ii) depreciation expense of $26,146, $27,625 and $12,443, (iii) interest expense of $31,109, $26,758 and $5,513, (iv) acquisition and transaction expense of $445, $616 and $104, (v) changes in fair value of non-hedge derivative instruments of $(18,904), $21,218 and $19,850, (vi) asset impairment of $1,135, $2,280 and $2,146, (vii) equity-based compensation of $5, $382, and $779 and (viii) equity method basis adjustments of $(1,091), $— and $—, respectively.

(i) net loss of $(37,211), $(8,858) and $(60,538), (ii) depreciation expense of $25,353, $26,146 and $27,625, (iii) interest expense of $37,600, $31,109 and $26,758, (iv) acquisition and transaction expense of $209, $445 and $616, (v) changes in fair value of non-hedge derivative instruments of $(1,488), $(18,904) and $21,218, (vi) asset impairment of $274, $1,135 and $2,280, (vii) equity-based compensation of $2, $5 and $382, (viii) loss on modification or extinguishment of debt of $4,724, $— and $—, (ix) equity method basis adjustments of $65, $(1,091) and $— and (x) other non-recurring items of $478, $— and $—, respectively.

Comparison of the years ended December 31, 2024 and 2023

Total expenses increased $1.5 million primarily due to an increase in professional fees.

Total expenses increased $1.7 million primarily due to an increase in consulting fees.

Other (expense) income

Total other expense decreased $57.6 million primarily due to decreases in equity in losses in unconsolidated entities primarily due to unrealized gains on power swaps at Long Ridge as power prices decreased, as well as increases in other income due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC.

Total other expense increased $22.3 million primarily due to increases in equity in losses in unconsolidated entities primarily due to a decrease in unrealized gains on power swaps at Long Ridge Energy & Power LLC and loss on extinguishment of debt at Long Ridge West Virginia LLC, partially offset by increases in other income 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 increased $16.7 million due to an increase in the pro-rata share of adjusted EBITDA from unconsolidated entities of $11.6 million, and the changes noted above.

Adjusted EBITDA increased $5.5 million due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

Total expenses increased $1.2 million primarily due to the acquisition and development of natural gas reserves.

Total expenses increased $1.5 million primarily due to an increase in professional fees.

Other (expense) income

Total other expenses increased $42.6 million primarily due to increases in equity in losses in unconsolidated entities primarily due to realized and unrealized losses on power swaps at Long Ridge, as well as an unexpected power plant outage at the end of 2022.

Total other expenses decreased $57.6 million primarily due to decreases in equity in losses in unconsolidated entities primarily due to unrealized gains on power swaps at Long Ridge as power prices decreased, as well as increases in other income due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy & Power LLC.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $7.5 million due to the changes noted above.

Adjusted EBITDA increased $16.7 million due to an increase in the pro-rata share of Adjusted EBITDA from unconsolidated entities of $11.6 million, and the changes noted above.

Sustainability and Energy Transition Segment

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Acquisition and transaction expenses 17 1 280 16 (279)

Asset impairment 72,336 — — 72,336 —

Total expenses 72,360 30 290 72,330 (260)

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Other non-recurring items — — — — —

Equity in (earnings) losses of unconsolidated entities 14,814 7,012 372 7,802 6,640

Equity in losses of unconsolidated entities 18,390 14,814 7,012 3,576 7,802

Non-controlling share of Adjusted EBITDA — — — — —

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Comparison of the years ended December 31, 2024 and 2023

Total expenses increased $72.3 million primarily due to the impairment of our investment and the related note receivable in GM-FTAI Holdco LLC.

Other (expense) income

Total other expense increased $7.4 million which reflects an increase of $7.8 million in equity in losses of unconsolidated entities primarily due to operating losses at GM-FTAI Holdco LLC, offset by an increase in other income of $0.4 million due to interest income earned on outstanding notes.

Total other expense increased $3.9 million which primarily reflects an increase of $3.6 million 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 $4.9 million primarily due to a decrease in the pro-rata share of adjusted EBITDA from unconsolidated entities of $5.3 million, and the changes noted above.

Adjusted EBITDA decreased $2.2 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

Other (expense) income

Other expense increased $4.5 million which reflects an increase of $6.6 million in equity method losses in unconsolidated entities primarily due to increased losses at GM-FTAI Holdco LLC and Clean Planet Energy USA, offset by an increase in other income of $2.1 million due to interest income earned on outstanding notes.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $2.0 million due to the changes noted above.

Adjusted EBITDA decreased $4.9 million primarily due to a decrease in the pro-rata share of Adjusted EBITDA from unconsolidated entities of $5.3 million, and the changes noted above.

Corporate and Other

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Other income 22 — 133 22 (133)

Total other (expense) income (63,359) (26,355) 470 (37,004) (26,825)

Total other expense (71,122) (63,359) (26,355) (7,763) (37,004)

Loss before income taxes (99,844) (94,723) (68,504) (5,121) (26,219)

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Net loss attributable to non-controlling interest in consolidated subsidiaries — (228) (688) 228 460

(228) (688) — 460 (688)

Dividends and accretion of redeemable preferred stock 70,814 62,400 23,657 8,414 38,743

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Other non-recurring items — — — — —

Equity in (earnings) losses of unconsolidated entities (56) (151) (470) 95 319

Equity in earnings of unconsolidated entities (40) (56) (151) 16 95

Non-controlling share of Adjusted EBITDA (2)

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Comparison of the years ended December 31, 2024 and 2023

Total revenues decreased $13.2 million primarily due to a decrease in roadside services at FYX.

Total expenses decreased $15.8 million primarily due to:

• a decrease in operating expenses of $15.6 million due to a decrease in roadside services at FYX;

• a decrease in depreciation and amortization expense of $1.7 million due to assets that became fully depreciated;

partially offset by

• an increase in general and administrative expense of $2.0 million primarily due to higher professional fees.

Other income (expense)

Total other expense increased $7.8 million due primarily to (i) an increase in interest expense of $8.9 million due to the additional issuance of the Senior Notes due 2027 in July 2023, partially offset by (ii) a decrease in loss on extinguishment of debt of $1.1 million due to repayment of amounts outstanding under the Credit Agreement in July 2023.

Dividends and accretion of redeemable preferred stock

Dividends and accretion of redeemable preferred stock increased $8.4 million due to continued accretion of our redeemable preferred stock balance for the year.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $2.0 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $20.3 million primarily due to the acquisition and consolidation of FYX in May 2022, in addition to FYX price increases during the year.

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Adjusted EBITDA decreased $1.5 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $47.9 million due to the acquisition of a majority stake and consolidation of FYX in May 2022.

Total expenses increased $53.6 million primarily due to the acquisition of a majority stake and consolidation of FYX in May 2022.

Other (expense) income

Total other expense increased $26.8 million due to an increase in interest expense of $26.6 million which reflects an increase in the average outstanding debt from the 2027 Notes issued in July 2022.

Dividends and accretion of redeemable preferred stock

Dividends and accretion of redeemable preferred stock increased $23.7 million due to the redeemable preferred stock raise completed in August 2022.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $0.3 million primarily due to the changes noted above.

Transactions with Affiliates and Affiliated Entities

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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.

In July 2023, we issued an additional $100.0 million aggregate principal amount of the Senior Notes due 2027 (the “2027 Notes”) .

The 2027 Notes bear interest at a rate of 10.500% per annum, payable semi-annually in arrears on June 1 and December 1 of each year.

Additionally, in December 2023, Repauno entered into an amendment to an existing revolver agreement (the “DRP Revolver”) that provides for revolving loans in the aggregate amount of an additional $25.0 million, for a total facility of $50.0 million.

Refer to Note 7 to the consolidated and combined consolidated financial statements for more information on our debt obligations.

As discussed in Note 2 to the consolidated and combined 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 repayment of Jefferson Terminal’s Taxable Series 2020B Bonds totaling $79.1 million that mature on January 1, 2025, the Company’s operating and capital expenditure commitments 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 a plan to alleviate liquidity risk by:

(i) refinancing the Taxable Series 2020B Bonds prior to their maturity date, including contributing additional unencumbered assets as collateral;

(ii) delaying planned capital expenditures;

(iii) electing to defer payment of the management fee and expense reimbursements to the Manager;

(iv) continuing to accrue paid-in-kind dividends on its Series A Senior Preferred Stock;

and (v) eliminating future dividends on common stock, excluding the common dividend that our board of directors declared on February 29, 2024 that will be paid on April 5, 2024.

We believe such plans are probable of being implemented and 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 and combined 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.

To the extent the Company improves its liquidity and financial position, Management and the Company’s board of directors may consider reinstating certain of the activities included in (ii) through (v) of Management’s plan discussed above.

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) a cquisitions of and investments in infrastructure assets, (ii) expenses associated with our operating activities and (iii) debt service obligations associated with our investments.

As disclosed in Note 19, subsequent to December 31, 2024, the Company has (i) extended the maturity dates of its EB-5 and EB-5.2 Loan Agreements to January 25, 2027 and March 10, 2027, respectively, (ii) amended its October 2024 Jefferson Credit Agreement to include the option to extend its maturity date to April 1, 2026 and (iii) executed an additional loan agreement for $30.0 million at its Repauno segment that will be due July 18, 2025 and includes the option to extend its maturity date to April 1, 2026.

Notwithstanding these actions, Management concluded that the Company’s current liquidity and forecasted cash flows from operations are not sufficient to meet its obligations as they become due, when including cash dividend payments on its Series A Preferred Stock.

However, Management has approved a plan to accrue paid-in-kind dividends on the Series A Preferred Stock which would preclude the payment of future dividends on common stock, excluding the common dividend that our board of directors declared on February 27, 2025 that will be paid on March 26, 2025 (see Note 19).

In addition, Management will exercise the options to extend the maturity dates of the debt instruments noted above, as needed.

Management concluded that such plans are probable of being implemented and 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.

Management will continue to evaluate its liquidity and financial position and update future plans accordingly.

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 $121.9 million, $147.2 million and $267.3 million during the years ended December 31, 2024, 2023 and 2022, respectively.

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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 December 31, 2023 (ii) revenues from our infrastructure businesses net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales.

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

• During the year ended December 31, 2024, additional borrowings were obtained in connection with the (i) April 2024 Jefferson Credit Agreement of $75.0 million, (ii) Series 2024 Bond Offering of $382.3 million and (iii) October 2024 Jefferson Credit Agreement of $50.0 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.

In August 2024, we used a portion of the net proceeds from the Series 2024 Bonds to repurchase and cancel an additional $6.0 million of the Tax Exempt Series 2021A Bonds.

• During the year ended December 31, 2023, additional borrowings were obtained in connection with the (i) EB-5 Loan Agreement of $1.6 million, (ii) Transtar Revolver of $40.0 million, (iii) Credit Agreement of $25.0 million, (iv) 2027 Notes (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $100.0 million and (v) DRP Revolver of $19.3 million.

In July 2023, we used a portion of the net proceeds from the additional $100.0 million aggregate principal amount of the 2027 Notes to repay the amounts outstanding under the Transtar Revolver and Credit Agreement in full.

• During the year ended December 31, 2022, additional borrowings were obtained in connection with the (i) 2027 Notes (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $473.8 million;

(ii) Transtar Revolver of $10.0 million and (iii) EB-5.3 Loan Agreement of $26.4 million.

We did not make any principal repayments of debt during the year ended December 31, 2022.

• During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Series 2021 Bonds (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $425.0 million and (ii) EB-5 Loan Agreement of $26.1 million.

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.

In addition, from time to time, we may seek to repay, refinance or restructure all or a portion of our debt or to repurchase or repay our outstanding debt through, as applicable, tender offers, exchange offers, open market purchases, privately negotiated transactions or otherwise.

Such transactions, if any, will depend on a number of factors, including prevailing market conditions, our liquidity requirements and contractual requirements (including compliance with the terms of our debt agreements), among other factors.

Historical Cash Flow

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Cash Flow Data:

Net cash provided by (used in) operating activities $ 5,513 $ (42,690) $ (61,716)

Net cash (used in) provided by operating activities $ (15,278) $ 5,513 $ (42,690)

Net cash used in investing activities (118,137) (147,123) (267,266)

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Comparison of the years ended December 31, 2024 and 2023

Net cash used in operating activities increased $20.8 million, which primarily reflects (i) an increase in net loss of $106.3 million, (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $23.6 million, (iii) a decrease in depreciation and amortization of $1.6 million and (iv) an increase in gain on sale of easement of $3.5 million, partially offset by (v) a change in equity in losses of unconsolidated entities of $30.8 million, (vi) a decrease in gain on the sale of assets of $4.5 million, (vii) an increase in loss on modification or extinguishment of debt of $6.9 million and (viii) an increase in asset impairment of $71.6 million.

Net cash used in investing activities decreased $29.0 million primarily due to (i) a decrease in acquisitions of property, plant and equipment of $19.5 million, (ii) a decrease in investment in convertible promissory notes of $4.6 million, (iii) a decrease in cash used for the acquisition of business of $4.4 million, (iv) a decrease in the investment in unconsolidated entities of $3.3 million and (v) an increase in gain on sale of easement of $3.5 million, partially offset by (vi) an increase in the acquisition of leasing equipment of $1.6 million and (vii) an increase in investment in equity instruments of $5.0 million.

Net cash provided by financing activities increased $113.8 million primarily due to (i) an increase in proceeds from debt of $317.1 million, partially offset by (ii) repayment of debt proceeds of $172.5 million, (iii) an increase in settlement of equity-based compensation of $1.2 million, (iv) an increase in payment of deferred financing costs of $2.6 million, (v) an increase in cash dividends paid for Redeemable Preferred Stock of $12.9 million and (vi) an increase in distributions to non-controlling interests of $13.4 million.

Comparison of the years ended December 31, 2023 and 2022

Net cash provided by operating activities increased $48.2 million, which primarily reflects (i) a decrease in net loss of $27.8 million, (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $46.5 million, (iii) an increase in depreciation and amortization of $10.2 million, (iv) an increase in equity-based compensation of $5.1 million and (v) an increase in bad debt expense of $1.4 million, partially offset by (vi) a change in equity in losses of unconsolidated entities of $42.7 million.

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Net cash provided by financing activities decreased $78.3 million primarily due to (i) a decrease in the proceeds from the issuance of Redeemable Preferred Stock of $274.6 million, (ii) a decrease in proceeds from debt of $337.7 million, (iii) repayment of debt proceeds of $75.1 million, (iv) cash dividends paid of $9.3 million and (v) a decrease in settlement of equity-based compensation of $1.6 million, partially offset by (vi) a decrease in net transfers to Former Parent of $617.3 million and (vii) a decrease in payment of deferred financing costs of $4.8 million.

Comparison of the years ended December 31, 2022 and 2021

Net cash used in operating activities decreased $19.0 million, which primarily reflects (i) an increase in net loss of $81.2 million, partially offset by (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $14.7 million, (iii) an increase in depreciation and amortization of $16.7 million, (iv) a change in equity in losses of unconsolidated entities of $53.9 million, and (v) an increase in deferred income taxes of $7.8 million.

Net cash used in investing activities decreased $561.5 million primarily due to a (i) decrease in the acquisition of business, net of cash acquired for $623.3 million and (ii) a decrease in the investment in unconsolidated entities of $49.2 million, partially offset by (iii) an increase in acquisitions of property, plant and equipment of $76.2 million and (iv) an increase in investment in convertible promissory notes of $37.5 million.

Net cash provided by financing activities decreased $979.1 million primarily due to (i) a decrease in net transfers from Former Parent of $1.3 billion partially offset by (ii) an increase in the proceeds from the issuance of Redeemable Preferred Stock of $274.6 million and (iii) an increase in proceeds from debt of $67.9 million.

Debt Covenants

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

Debt Obligations — As of December 31, 2023, we have outstanding principal and interest payment obligations of $1.4 billion and $531.3 million, respectively, of which, there is no principal payment due and $97.2 million of interest payments due within the next twelve months.

Debt Obligations — As of December 31, 2024, we have outstanding principal and interest payment obligations of $1.6 billion and $555.3 million, respectively, of which, there are $50.0 million of principal payments due and $122.0 million of interest payments due within the next twelve months.

See Note 7 of the consolidated and combined consolidated financial statements for additional information about our debt obligations.

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See Notes 2 and 16 for additional information related to our preferred stock obligations.

Other Cash Requirements —On July 5, 2023, we issued an additional $100.0 million aggregate principal amount of 10.500% senior secured notes due 2027, at an issue price equal to 95.50% of principal, plus accrued interest from and including June 1, 2023.

These notes have identical terms as the original notes, other than with respect to the date of issuance and the issue price, and bear interest at a rate of 10.500% per annum, payable semi-annually in arrears on June 1 and December 1 of each year.

We used a portion of the net proceeds from the offering to repay in full the amount outstanding under the Transtar Revolver and Credit Agreement and the commitments thereunder were terminated in connection with the closing of the offering.

We intend to use the remainder of net proceeds for general corporate purposes.

Other Cash Requirements —In addition to our contractual obligations, we may pay quarterly cash dividends on our common stock, which are subject to change at the discretion of our board of directors.

We expect to meet our future short-term liquidity requirements through cash on hand, unused borrowing capacity or future financings and net cash provided by our current operations.

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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.

Application of Critical Accounting Policies

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Scrap value at end of useful life

Vehicles 5 - 7 years from date of manufacture

Scrap value at end of useful life

Furniture and fixtures 3 - 6 years from date of purchase

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A goodwill impairment assessment compares the fair value of a respective reporting unit with its carrying amount, including goodwill.

The estimate of fair value of the respective reporting unit is based on the best information available as of the date of assessment, which primarily incorporates certain factors including our assumptions about operating results, business plans, income projections, anticipated future cash flows and market data.

income projections, anticipated future cash flows and market data.

If the estimated fair value of the reporting unit is less than the carrying amount, a goodwill impairment is recorded to the extent that the carrying value of the reporting unit exceeds the fair value.

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We estimate the fair value of Jefferson Terminal using an income approach, specifically a discounted cash flow analysis.

This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, EBITDA margins, capital expenditures and discount rates.

This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, capital expenditures and discount rates.

The estimates and assumptions used consider historical performance if indicative of future performance and are consistent with the assumptions used in determining future profit plans for the reporting units.

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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 had an estimated fair value that exceeded its carrying value by more than 10% as of October 1, 2024.

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.

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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-K

Item 7. Management’s Discussion and Analysis