FTAI Infrastructure (FIP) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We have limited operating history as an independent company and may not be able to successfully operate our business strategy, generate sufficient revenue to make or sustain distributions to our stockholders or meet our contractual commitments
2. 02Uncertainty relating to macroeconomic conditions may reduce the demand for our assets, limit our ability to obtain additional capital to finance new investments or refinance existing debt, or have other unforeseen negative effects
3. 03The industries in which we operate have experienced periods of oversupply during which asset values have declined, particularly during the most recent economic downturn, and any future oversupply could materially adversely affect our results of operations and cash flows21% rewritten
4. 04There can be no assurance that any target returns will be achieved
5. 05Contractual defaults may adversely affect our business, prospects, financial condition, results of operations and cash flows by decreasing revenues and increasing storage, positioning, collection, recovery and lost equipment expenses
6. 06If we acquire a high concentration of a particular type of asset, or concentrate our investments in a particular sector, our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector
7. 07We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our and our subsidiaries’ indebtedness and preferred stock34% rewritten
8. 08We operate in highly competitive markets
9. 09The values of our assets may fluctuate due to various factors
10. 10Our use of joint ventures or partnerships, and our Manager’s outsourcing of certain functions, may present unforeseen obstacles or costs
11. 11We are subject to the risks and costs of obsolescence of our assets
12. 12The North American rail sector is a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements could significantly increase our operational costs of doing business, thereby adversely affecting our profitability
13. 13Our business could be adversely affected if service on the railroads is interrupted or if more stringent regulations are adopted regarding railcar design or the transportation of crude oil by rail61% rewritten
14. 14We could be negatively impacted by environmental, social, and governance (“ESG”) and sustainability-related matters21% rewritten
15. 15We transport hazardous materials
16. 16We may be affected by fluctuating prices for fuel and energy
17. 17Because we depend on Class I railroads for a significant portion of our operations in North America, our results of operations, financial condition and liquidity may be adversely affected if our relationships with these carriers deteriorate
18. 18The Railroad segment faces competition from other railroads and other transportation providersNew
19. 19Our assets are exposed to unplanned interruptions caused by events outside of our control which may disrupt our business and cause damage or losses that may not be adequately covered by insurance
20. 20We are actively evaluating potential acquisitions of assets and operating companies in other infrastructure sectors which could result in additional risks and uncertainties for our business and unexpected regulatory compliance costs
21. 21Restrictive covenants in our and our subsidiaries’ debt and preferred stock instruments may adversely affect usNew
22. 22Terrorist attacks or other hostilities could negatively impact our operations and our profitability and may expose us to liability and reputational damage
23. 23Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues77% rewritten
24. 24assets. If the appraised value of such assets declines, we may be required to reduce the principal outstanding under our debt facilities or otherwise be unable to incur new borrowingsNew
25. 25The effects of various environmental regulations may negatively affect the industries in which we operate which could have a material adverse effect on our financial condition, results of operations and cash flows
26. 26Our Repauno site and the Long Ridge property are subject to environmental laws and regulations that may expose us to significant costs and liabilities
27. 27We have material customer concentration with respect to the Jefferson Terminal and Railroad segments, with a limited number of customers accounting for a material portion of our revenues
28. 28If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows
29. 29Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows

Risks Related to Our Manager

1. 30We are dependent on our Manager and other key personnel at Fortress and may not find suitable replacements if our Manager terminates the Management Agreement or if other key personnel depart
2. 31Our Management Agreement was not negotiated at arm’s-length, and its terms, including fees payable, may not be as favorable to us as if they had been negotiated with an unaffiliated third party
3. 32Our Manager will not be liable to us for any acts or omissions performed in accordance with the Management Agreement, including with respect to the performance of our assets
4. 33Our Manager’s due diligence of potential asset acquisitions or other transactions may not identify all pertinent risks, which could materially affect our business, financial condition, liquidity and results of operations

Risks Related to the Spin-off

1. 34The ownership by some of our directors of common shares, options, or other equity awards of FTAI may create, or may create the appearance of, conflicts of interest
2. 35We may compete with affiliates of and entities managed by our Manager which could adversely affect our and their results of operations
3. 36We share certain key directors with FTAI, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts
4. 37The degree to which we are leveraged could cause a material adverse effect on our business, financial condition, results of operations and cash flows28% rewritten
5. 38We experienced an “ownership change” for purposes of Section 382 of the Code, which limits our ability to utilize our net operating loss and certain other tax attributes to reduce our future taxable incomeNew

Risks Related to the Wheeling Acquisition

1. 39We may be unable to successfully integrate the businesses and realize the anticipated benefits of the Wheeling AcquisitionNew
2. 40We may not have discovered undisclosed liabilities or other issues of Wheeling during our due diligence process, and we may not have adequate legal protection from potential liabilities of, or in respect of our acquisition of WheelingNew
3. 41Wheeling faces competition from other railroads and other transportation providers
4. 42Wheeling has material customer concentration, with a limited number of customers accounting for a material portion of our revenuesNew
5. 43The future results of the Company may be adversely impacted if the Company does not effectively manage its expanded operations following the completion of the Wheeling AcquisitionNew
6. 44Wheeling has not been required to comply with the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”)New

Risks Related to Our Common Stock

1. 45The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders
2. 46An increase in market interest rates may have an adverse effect on the market price of our common stock
3. 47There can be no assurance that the market for our common stock will provide you with adequate liquidity
4. 48Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price
5. 49Your percentage ownership in us may be diluted in the future21% rewritten
6. 50Our common stock is subject to ownership and transfer restrictions intended to preserve our ability to use our net operating loss carryforwards and other tax attributes
7. 51We may incur or issue debt or issue equity, which may negatively affect the market price of our common stock
8. 52Provisions of Delaware law, our certificate of incorporation and our bylaws, prevent or delay an acquisition of our company, which could decrease the market price of our common stock
9. 53Our bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees
10. 54While we currently pay regular quarterly dividends to our stockholders, we may change our dividend policy at any time
11. 55As a public company, we will incur additional costs and face increased demands on our management
12. 56If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline
13. 57Our determination of how much leverage to use to finance our acquisitions may adversely affect our return on our assets and may reduce funds available for distribution
14. 58Changes to United States federal income tax laws could materially and adversely affect us and our stockholders