1319229--3/16/2007--TransMontaigne_Partners

related topics

{customer, product, revenue}

{debt, indebtedness, cash}

{operation, natural, condition}

{gas, price, oil}

{tax, income, asset}

{acquisition, growth, future}

{cost, regulation, environmental}

{cost, contract, operation}

{loss, insurance, financial}

We depend upon a relatively small number of customers for a substantial majority of our revenues. A substantial reduction of those revenues would have a material adverse effect on our financial condition and results of operations. Our credit facility requires that we reduce our leverage during 2007, which may limit our flexibility in pursuing other business opportunities. If one or more of our significant customers do not continue to engage us to provide services after the expiration of their current terminaling services agreements and we are unable to secure comparable alternative arrangements, our financial condition and results of operations will be adversely affected. Our business involves many hazards and operational risks, including adverse weather conditions, which could cause us to incur substantial liabilities. TransMontaigne may not elect to renew the omnibus agreement when it expires, which could have an adverse impact on our business operations and financial condition. We are exposed to the credit risks of TransMontaigne Inc. and our other significant customers, which could affect our creditworthiness. Any material nonpayment or nonperformance by such customers could also adversely affect our financial condition and results of operations. If we do not make acquisitions on economically acceptable terms, any future growth will be limited. Any acquisitions we make are subject to substantial risks, which could adversely affect our financial condition and results of operations. Our exclusive options to purchase additional refined product terminals from TransMontaigne Inc. are subject to significant risks and uncertainty, and thus these options may never be exercised, which could limit our ability to grow our business. We may not be able to obtain financing for the exercise of our exclusive options to purchase additional refined product terminals from TransMontaigne Inc., which could limit our ability to grow our business. Expanding our business by constructing new facilities subjects us to risks that the project may not be completed on schedule, and that the costs associated with the project may exceed our expectations, which could adversely affect our financial condition and results of operations. A significant decrease in demand for refined products in the areas served by our terminals and pipeline would adversely affect our financial condition and results of operations. Competition from other terminals and pipelines that are able to supply TransMontaigne Inc.'s and Morgan Stanley Capital Group's customers with refined petroleum products storage capacity at a lower price could adversely affect our financial condition and results of operations. Because of our lack of asset diversification, adverse developments in our terminals or pipeline operations could adversely affect our revenues and cash flows. Our operations are subject to governmental laws and regulations relating to the protection of the environment that may expose us to significant costs and liabilities. Terrorist attacks, and the threat of terrorist attacks, have resulted in increased costs to our business. Continued hostilities in the Middle East or other sustained military campaigns may adversely impact our ability to make distributions to our unitholders. The obligations of several of our key customers under their terminaling services agreements may be reduced or suspended in some circumstances, which would adversely affect our financial condition and results of operations. We are not fully insured against all risks incident to our business, and could incur substantial liabilities as a result. Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities. TransMontaigne Inc. controls our general partner, which has sole responsibility for conducting our business and managing our operations. TransMontaigne Inc. and Morgan Stanley Capital Group have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests to our detriment. The control of our general partner may be transferred to a third party without unitholder consent. Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as our not being subject to entity-level taxation by states. If the Internal Revenue Service were to treat us as a corporation or if we were to become subject to entity-level taxation for state tax purposes, then our cash flows would be substantially reduced. If the IRS were to successfully challenge our use of a calendar taxable year for federal income tax purposes, the challenge may result in adjustments to the federal income tax liability of our unitholders, the imposition of tax penalties on us and we may have difficulty providing our unitholders with all of the information necessary to timely file their federal income tax returns. As a result, the market for our common units may be adversely affected and our relations with our unitholders could suffer.

Full 10-K form ▸

1319229--3/16/2007--TransMontaigne_Partners_L.P.