What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-03 compared with 2022-08-25 · 573 added, 540 removed, 795 unchanged (58% of the section changed)

Financial Statements

FTAI INFRASTRUCTURE LLC

BALANCE SHEETS

(Dollars in thousands)

June 30, 2022 December 31, 2021

Cash $ 30,001 $ —

Other assets 25,697 —

Total assets 55,698 —

Liabilities and Member’s Equity

Accrued liabilities 23,560 —

Total liabilities 23,560 —

Commitments and contingencies

Member's equity

Membership interest 32,138 —

Total Member's equity 32,138 —

Total liabilities and Member's equity $ 55,698 $ —

See accompanying notes to financial statements.

FTAI INFRASTRUCTURE LLC

STATEMENTS OF OPERATIONS (unaudited)

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share and per share data)

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Revenues $ — $ —

Acquisition and transaction expenses 25 25

Total expenses 25 25

Net loss ( 25 ) ( 25 )

Loss per share:

Basic $ 0.00 $ 0.00

Diluted $ 0.00 $ 0.00

Weighted average shares outstanding:

Basic 99,387,467 99,387,467

Diluted 99,387,467 99,387,467

See accompanying notes to financial statements.

FTAI INFRASTRUCTURE LLC

STATEMENT OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Six Months Ended June 30, 2022

Member's Equity

Equity - December 31, 2021 $ —

Net transfers from Parent 1

Equity - March 31, 2022 1

Net loss ( 25 )

Net transfers from Parent 32,162

Equity - June 30, 2022 $ 32,138

See accompanying notes to financial statements.

FTAI INFRASTRUCTURE LLC

STATEMENT OF CASH FLOWS (unaudited)

(Dollars in thousands)

Six Months Ended

June 30, 2022

Cash flows from operating activities:

Net loss $ ( 25 )

Net cash used in operating activities ( 25 )

Cash flows from financing activities:

Net transfers from Parent, net 30,026

Net cash provided by financing activities 30,026

Net Increase in cash and cash equivalents 30,001

Cash and cash equivalents, beginning of period —

Cash and cash equivalents, end of period $ 30,001

Supplemental disclosure of non-cash financing activities:

Deferred financing costs ( 2,136 )

See accompanying notes to financial statements.

FTAI INFRASTRUCTURE LLC

NOTES TO FINANCIAL STATEMENTS (unaudited)

FTAI Infrastructure LLC (the “Company”) was incorporated in Delaware as a limited liability company on December 13, 2021.

The Company was formed in connection with the separation of the infrastructure business of Fortress Transportation & Infrastructure Investors LLC (“FTAI” or the “Parent”) from the Parent.

The Company holds all of the material assets, liabilities and investments that comprise FTAI’s infrastructure business, and converted to FTAI Infrastructure Inc., a Delaware corporation, as of August 1, 2022, in connection with the spin-off , as described in Note 5.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation —The accompanying financial statements are presented on the accrual basis of accounting and in conformity with accounting principles generally accepted in the United States of America (“U.S.

Separate statements of income, changes in equity, and cash flows have not been included with the balance sheet as of December 31, 2021 because the Company had not begun its principal operations and had no revenue, expenses, changes in equity, or changes in cash flows to report.

Cash —The Company maintains its cash with high-credit quality financial institutions, which are insured by the U.S.

Federal Deposit Insurance Corporation.

Other Assets —Other assets is comprised of deferred financing fees and stock issuance costs of $ 25.7 million and $ — million accrued as of June 30, 2022 and December 31, 2021, respectively in connection with the anticipated financings.

Accrued Liabilities —Accrued liabilities is comprised of fees recorded in connection with the anticipated financings and is due within the next twelve months.

Use of Estimates —The preparation of the financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements.

Actual results could differ from those estimates.

EARNINGS PER SHARE

On August 1, 2022, FTAI distributed one share of FTAI Infrastructure Inc.

common stock for each FTAI common share held by FTAI shareholders of record as of the record date.

As of that date, 99,387,467 shares were distributed.

This number of shares is utilized for the calculation of basic and diluted loss per share for all periods presented prior to the spin-off.

For the three and six months ended June 30, 2022, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

For periods prior to the spin-off, it is assumed that there are no dilutive equity instruments as there were no equity awards of the Company outstanding prior to the spin-off.

COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of business.

As of June 30, 2022, the Company is not subject to any material litigation nor is the Company aware of any material litigation threatened against it.

SUBSEQUENT EVENTS

Subscription Agreements

On June 30, 2022, the Company and Transtar, LLC, a subsidiary of the Parent, entered into subscription agreements with entities affiliated with Ares Management LLC (collectively the “Subscriber”).

Pursuant to the subscription agreement, the Company agreed to sell to the Subscriber (i) 300,000 shares of newly-created Series A Senior Preferred Stock with a par value of $ 0.01 per share, (ii) warrants representing the right to purchase 3,342,566 shares of common stock of the Company, with a par value of $ 0.01 per share, at an exercise price of $ 10.00 per share (as adjusted in accordance with the agreement governing the warrants), and (iii) warrants representing the right to purchase 3,342,566 shares of common stock at an exercise price of $ 0.01 per share, for an aggregate purchase price of $ 300.0 million, net of a discount of $ 9.0 million.

Net proceeds were distributed to the Parent.

These agreements were not effective until the spin-off, described below, was complete.

Senior Secured Notes Offering

On July 7, 2022, the Company closed its private offering of $ 450.0 million aggregate principal amount of 10.500 % senior secured notes due 2027, at an issue price equal to 94.585 % of principal.

FTAI INFRASTRUCTURE LLC

NOTES TO FINANCIAL STATEMENTS (unaudited)

On July 25, 2022, the Company closed its private offering of an additional $ 50.0 million aggregate principal amount of 10.500 % senior secured notes due 2027, at an issue price equal to 94.585 % of principal.

The additional notes and the existing $ 450.0 million notes will be treated as a single class for all purposes under that certain indenture dated as of July 7, 2022, as supplemented.

Net proceeds were distributed to the Parent.

These notes were not effective until the spin-off, described below, was complete.

Conversion of Limited Liability Company to Corporation

On July 29, 2022, FTAI Infrastructure LLC was converted to a corporation, FTAI Infrastructure Inc., pursuant to the laws of the State of Delaware.

Adoption of Management Agreement

On July 31, 2022, FTAI Infrastructure Inc.

entered into a management agreement with FIG LLC (the “Manager”), an affiliate of Fortress (the “Management Agreement”), with substantially the same terms as the previously held management agreement between the Parent and the Manager.

FTAI Infrastructure Spin-off

On August 1, 2022, FTAI completed the spin-off of FTAI Infrastructure Inc., in which FTAI shareholders received one share of common stock of FTAI Infrastructure Inc., par value $ 0.01 per share for every one common share of FTAI held as of the close of business on July 21, 2022, the record date for the separation.

Following the distribution, FTAI Infrastructure Inc.

became an independent, publicly-traded company with its common stock listed under the symbol “FIP" on The Nasdaq Global Select Market.

Manager Options

In connection with the spin-off, FTAI Infrastructure Inc.

issued 10.9 million options to the Manager pursuant to the Management Agreement as compensation to the Manager for the successful completion of an offering.

Nonqualified Stock Option and Incentive Award Plan

On August 1, 2022, the Board of Directors adopted a Nonqualified Stock Option and Incentive Award Plan which provides for the ability to grant equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

As of August 1, 2022, the Plan provides for the issuance of up to 30 million shares of the Company’s common stock.

FTAI INFRASTRUCTURE

COMBINED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

Notes June 30, 2022 December 31, 2021

Notes September 30, 2022 December 31, 2021

Current assets:

22 unchanged sentences

Commitments and contingencies 20

Net Parent investment 1,656,695 1,617,601

Redeemable preferred stock ($ 0.01 par value per share;

200,000,000 shares authorized;

300,000 shares issued and outstanding as of September 30, 2022;

redemption amount of $ 450 million at September 30, 2022)

Net Former Parent investment — 1,617,601

Common shares ($ 0.01 par value per share;

2,000,000,000 shares authorized;

99,387,467 shares issued and outstanding as of September 30, 2022)

Additional paid in capital 929,088 —

Accumulated deficit ( 14,368 ) —

Accumulated other comprehensive loss ( 342,125 ) ( 155,464 )

Parent company equity 1,356,569 1,462,137

Stockholders' and Former Parent Company equity 573,589 1,462,137

Non-controlling interest in equity of consolidated subsidiaries ( 17,738 ) ( 91 )

Total equity 555,851 1,462,046

Total liabilities and equity $ 2,560,228 $ 2,442,301

See accompanying notes to combined consolidated financial statements.

FTAI INFRASTRUCTURE

COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Total liabilities, redeemable preferred stock and equity $ 2,525,468 $ 2,442,301

See accompanying notes to Consolidated and Combined Consolidated Financial Statements.

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(Dollars in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Notes 2022 2021 2022 2021

8 unchanged sentences

Equity in losses of unconsolidated entities 6 ( 12,080 ) ( 1,545 ) ( 47,982 ) ( 8,810 )

Gain on sale of assets, net — 16 — 16

(Loss) gain on sale of assets, net ( 134 ) — ( 134 ) 16

Interest expense ( 19,161 ) ( 4,384 ) ( 32,106 ) ( 9,396 )

5 unchanged sentences

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 8,381 ) ( 7,363 ) ( 24,327 ) ( 18,949 )

Net loss attributable to Parent $ ( 29,480 ) $ ( 25,435 ) $ ( 72,302 ) $ ( 34,763 )

Dividends and accretion on redeemable preferred stock 9,263 — 9,263 —

Net loss attributable to Stockholders and Former Parent $ ( 44,076 ) $ ( 27,286 ) $ ( 116,378 ) $ ( 62,050 )

Loss per share:

4 unchanged sentences

Diluted 102,730,033 99,387,467 102,730,033 99,387,467

See accompanying notes to combined consolidated financial statements.

FTAI INFRASTRUCTURE

COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)

See accompanying notes to Consolidated and Combined Consolidated Financial Statements.

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)

(Dollars in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

5 unchanged sentences

Comprehensive loss attributable to non-controlling interest ( 8,381 ) ( 7,363 ) ( 24,327 ) ( 18,949 )

Comprehensive loss attributable to Parent $ ( 77,194 ) $ ( 58,650 ) $ ( 216,964 ) $ ( 56,311 )

Comprehensive loss attributable to Stockholders and Former Parent $ ( 76,812 ) $ ( 84,659 ) $ ( 293,776 ) $ ( 140,971 )

________________________________________________________

(1) Net of deferred tax benefit of $ — and $( 6,734 ) for the three months ended June 30, 2022 and 2021, respectively, and $ — and $( 3,633 ) for the six months ended June 30, 2022 and 2021, respectively.

See accompanying notes to combined consolidated financial statements.

FTAI INFRASTRUCTURE

COMBINED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

(1) Net of deferred tax expense (benefit) of $ — and $ 2,362 for the three months ended September 30, 2022 and 2021, respectively, and $ — and $( 1,271 ) for the nine months ended September 30, 2022 and 2021, respectively.

See accompanying notes to Consolidated and Combined Consolidated Financial Statements.

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Six Months Ended June 30, 2022

Net Parent Investment Accumulated Other Comprehensive Loss Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Three and Nine Months Ended September 30, 2022

Common Shares Net Former Parent Investment Additional Paid In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - December 31, 2021 $ — $ 1,617,601 $ — $ — $ ( 155,464 ) $ ( 91 ) $ 1,462,046

2 unchanged sentences

Total comprehensive loss — ( 72,302 ) — — ( 144,662 ) ( 15,946 ) ( 232,910 )

Net transfers from Parent 34,270 34,270

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 562 562

Net transfers from Former Parent 111,396 111,396

Equity-based compensation 1,665 1,665

Equity - March 31, 2022 $ 1,609,049 $ ( 252,412 ) $ ( 6,848 ) $ 1,349,789

Equity - June 30, 2022 $ — $ 1,656,695 $ — $ — $ ( 300,126 ) $ ( 10,756 ) $ 1,345,813

Net loss ( 20,445 ) ( 14,368 ) ( 8,381 ) ( 43,194 )

1 unchanged sentence

Total comprehensive loss — ( 20,445 ) — ( 14,368 ) ( 41,999 ) ( 8,381 ) ( 85,193 )

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 562 562

Net transfers from Parent 77,126 77,126

Net transfers to Former Parent ( 728,717 ) ( 728,717 )

Distribution by Former Parent 994 ( 907,533 ) 906,539 —

Contributions from non-controlling interests 170 170

Settlement of equity-based compensation ( 148 ) ( 148 )

Issuance of warrants 13,764 13,764

Issuance of Manager options 18,127 18,127

Distribution to Manager ( 79 ) ( 79 )

Dividends and accretion on redeemable preferred stock ( 9,263 ) ( 9,263 )

Equity-based compensation 1,377 1,377

Equity - June 30, 2022 $ 1,656,695 $ ( 300,126 ) $ ( 10,756 ) $ 1,345,813

Three and Six Months Ended June 30, 2021

Net Parent Investment Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - September 30, 2022 $ 994 $ — $ 929,088 $ ( 14,368 ) $ ( 342,125 ) $ ( 17,738 ) $ 555,851

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Nine Months Ended September 30, 2021

Net Former Parent Investment Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - December 31, 2020 $ 999,291 $ ( 26,237 ) $ 22,343 $ 995,397

2 unchanged sentences

Total comprehensive (loss) income ( 34,764 ) ( 21,548 ) ( 11,586 ) ( 67,898 )

Net transfers from Parent 30,997 30,997

Net transfers from Former Parent 121,577 121,577

Equity-based compensation 2,553 2,553

Equity - March 31, 2021 $ 1,020,959 $ ( 14,570 ) $ 18,496 $ 1,024,885

Equity - June 30, 2021 $ 1,086,104 $ ( 47,785 ) $ 13,310 $ 1,051,629

Net loss ( 27,286 ) ( 7,363 ) ( 34,649 )

1 unchanged sentence

Total comprehensive loss ( 27,286 ) ( 57,373 ) ( 7,363 ) ( 92,022 )

Net transfers from Parent 90,580 90,580

Net transfers from Former Parent 572,750 572,750

Equity-based compensation 728 728

Equity - June 30, 2021 $ 1,086,104 $ ( 47,785 ) $ 13,310 $ 1,051,629

See accompanying notes to combined consolidated financial statements.

FTAI INFRASTRUCTURE

COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Equity - September 30, 2021 $ 1,631,568 $ ( 105,158 ) $ 6,675 $ 1,533,085

See accompanying notes to Consolidated and Combined Consolidated Financial Statements.

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

2 unchanged sentences

Equity in losses of unconsolidated entities 47,982 8,810

Gain on sale of assets, net — ( 16 )

Loss (gain) on sale of assets, net 134 ( 16 )

Equity-based compensation 3,042 3,281

20 unchanged sentences

Payment of deferred financing costs ( 12,803 ) ( 13,007 )

Capital contribution from non-controlling interest 562 —

Net transfers from Parent, net 111,396 121,573

Proceeds from issuance of redeemable preferred stock 291,000 —

Redeemable preferred stock issuance costs ( 16,418 ) —

Distribution to Manager ( 79 ) —

Capital contribution from non-controlling interests 732 —

Net transfers (to) from Former Parent, net ( 617,322 ) 694,327

Settlement of equity-based compensation ( 148 ) —

Net cash provided by financing activities 127,337 1,132,420

5 unchanged sentences

Conversion of interests in unconsolidated subsidiaries ( 21,302 ) —

Dividends and accretion on redeemable preferred stock ( 9,263 ) —

Non-cash change in equity method investment ( 186,662 ) ( 78,921 )

See accompanying notes to combined consolidated financial statements.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

See accompanying notes to Consolidated and Combined Consolidated Financial Statements.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Fortress Transportation and Infrastructure Investors LLC (the “Parent” or “FTAI”) consists of an equipment leasing business that owns and leases aviation and offshore equipment and an infrastructure business that owns and operates multiple infrastructure assets further described below.

During the third quarter of 2021, the Parent announced that it was proceeding with a plan to spin off its infrastructure business and separate into two distinct, publicly traded companies comprising the infrastructure business (“we”, “us”, “our”, or “FTAI Infrastructure”) and the aviation business.

In preparation for the spin off, the Parent established a new holding company, and the infrastructure business was contributed to or merged into the new holding company, which resulted in the infrastructure business being considered the predecessor of the newly formed FTAI Infrastructure Inc.

(the “Holding Company”).

On August 1, 2022, the Parent executed the spin-off of its infrastructure business by way of a pro-rata distribution of common stock of FTAI Infrastructure Inc.

to Parent common shareholders of record as of the close of business on the spin-off transaction record date.

In connection with the spin-off transaction, the Parent was treated as the accounting spinnor, consistent with the legal form of the transaction.

Following the spin-off, our Holding Company became a separate public company primarily focused on investing in high quality infrastructure and listed on The Nasdaq Global Select Market under the symbol “FIP.” Our Holding Company is headquartered in New York, New York.

FTAI Infrastructure owns and operates (i) a multi-modal crude oil and refined products terminal in Beaumont, Texas (“Jefferson Terminal”), (ii) five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities (“Transtar”), (iii) a 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 (“Repauno”), (iv) an equity method investment in a multi-modal terminal located along the Ohio River with multiple industrial development opportunities, including a power plant (“Long Ridge”), and (v) an equity method investment in two ventures developing battery and metal recycling technology (“Aleon” and “Gladieux”).

FTAI Infrastructure Inc.

(“we”, “us”, “our”, or the “Company”) is a Delaware corporation and was incorporated on December 13, 2021 in connection with the separation of the infrastructure business (“FTAI Infrastructure”) of Fortress Transportation and Infrastructure Investors LLC (the “Former Parent” or “FTAI”).

The Company owns and operates (i) five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities (“Transtar”), (ii) a multi-modal crude oil and refined products terminal in Beaumont, Texas (“Jefferson Terminal”), (iii) a 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 (“Repauno”), (iv) an equity method investment in a multi-modal terminal located along the Ohio River with multiple industrial development opportunities, including a power plant (“Long Ridge”), and (v) an equity method investment in two ventures developing battery and metal recycling technology (“Aleon” and “Gladieux”).

Additionally, we own and lease shipping containers (“Containers”) and operate a railcar cleaning business (“KRS”) as well as an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries (“FYX”).

We have three reportable segments:

(i) Jefferson Terminal, (ii) Ports and Terminals and (iii) Transtar, which operate in the infrastructure sector (see Note 17).

We have five reportable segments:

(i) Railroad, (ii) Jefferson Terminal, (iii) Repauno, (iv) Power and Gas, and (v) Sustainability and Energy Transition, which all operate in the infrastructure sector (see Note 17).

The Company is headquartered in New York, New York.

FTAI Infrastructure Spin-off

On July 11, 2022, the Former Parent announced that its Board of Directors unanimously approved the details and timing of the previously announced spin-off of its infrastructure business, which was contributed to or merged into the Company and resulted in the infrastructure business being considered as our predecessor.

Prior to the spin-off, FTAI consisted of an equipment leasing business and an infrastructure business.

On August 1, 2022 (the “Separation Date”), FTAI distributed to the holders of FTAI common shares as of July 21, 2022, one share of FTAI Infrastructure Inc.

common stock for each FTAI common share and we became an independent, publicly-traded company trading on The Nasdaq Global Select Market under the symbol “FIP.”

In connection with the spin-off, the Company made a payment to the Former Parent on the Separation Date from the proceeds of the issuance of new debt (see Note 8) and the Redeemable Preferred Stock raise (see Note 18).

The Former Parent retained no ownership interest in the Company following the spin-off.

The Company entered into several agreements with the Former Parent and FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”) that, among other things, effect the separation and govern the relationship of the parties following the separation.

The Company also entered into a management agreement with the Manager (the “Management Agreement”), with substantially the same terms as the previously held management agreement between the Former Parent and the Manager.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation —The accompanying Combined Consolidated Financial Statements were prepared on a standalone basis and have been derived from the consolidated financial statements and accounting records of the Parent.

These financial statements reflect the combined consolidated historical results of operations, financial position and cash flows of FTAI Infrastructure in accordance with U.S.

generally accepted accounting principles (“U.S.

Historically, separate financial statements have not been prepared for FTAI Infrastructure and it has not operated as a standalone business separate from the Parent.

The accompanying Combined Consolidated Financial Statements have been prepared from the Parent’s historical accounting records and are presented on a standalone basis as if the operations had been conducted independently from Parent.

Accordingly, Parent’s net investment in our operations (Parent company equity) is shown in lieu of stockholders’ equity in the accompanying Combined Consolidated Financial Statements, which include the historical operations, assets, and liabilities comprising FTAI Infrastructure.

Basis of Presentation:

Unaudited Consolidated and Combined Consolidated Financial Statements

The Company’s financial statements for the periods through the Separation Date are Combined Consolidated Financial Statements.

The Company’s financial statements for the period after the Separation Date through September 30, 2022 are Consolidated Financial Statements based on the reported results of FTAI Infrastructure Inc.

as a standalone company.

The historical results of operations, financial position, and cash flows of FTAI Infrastructure represented in the Combined Consolidated Financial Statements may not be indicative of what they would have been had FTAI Infrastructure actually been a separate standalone entity during such periods, nor are they necessarily indicative of our future results of operations, financial position, and cash flows.

The Combined Consolidated Financial Statements include certain assets and liabilities that have historically been held by the Parent but are specifically identifiable or otherwise attributable to FTAI Infrastructure.

All significant intercompany transactions between Parent and FTAI Infrastructure have been included as components of Net Parent investment in the Combined Consolidated Financial Statements, as they are to be considered effectively settled upon effectiveness of the separation.

Basis of Presentation:

Prior to spin-off

The Company’s financial statements for the periods through the Separation Date were prepared on a standalone basis as if the operations had been conducted independently from the Former Parent and have been derived from the consolidated financial statements and accounting records of the Former Parent.

Accordingly, Former Parent’s net investment in our operations (Former Parent Company equity) was shown in lieu of stockholders’ equity in the accompanying Combined Consolidated Financial Statements, which include the historical operations, assets, and liabilities comprising the infrastructure business of FTAI.

Prior to the Separation Date, the Combined Consolidated Financial Statements include certain assets and liabilities that have historically been held by the Former Parent but are specifically identifiable or otherwise attributable to FTAI Infrastructure.

All significant intercompany transactions between Former Parent and FTAI Infrastructure have been included as components of Net Former Parent investment in the Combined Consolidated Financial Statements, as they are to be considered effectively settled upon effectiveness of the separation.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The Combined Consolidated Financial Statements are presented as if our businesses had been combined for all periods presented.

The assets and liabilities in the Combined Consolidated Financial Statements have been reflected on a historical cost basis, as immediately prior to the separation, all of the assets and liabilities presented are owned by the Parent and are being transferred to us at a carry-over basis.

Cash and Cash Equivalents —The Cash and Cash Equivalents reflected in the financial statements of FTAI Infrastructure are Cash and Cash Equivalents that were legally held by FTAI Infrastructure during the periods presented in the financial statements and are directly attributed to and used in the operations of the infrastructure business.

Debt and the Corresponding Interest Expense — The Debt reflected in the financial statements of FTAI Infrastructure is debt that is directly attributable to, and legally incurred by, FTAI Infrastructure’s business.

The assets and liabilities in the Combined Consolidated Financial Statements have been reflected on a historical cost basis, as immediately prior to the separation, all of the assets and liabilities presented are owned by the Former Parent and are being transferred to us at a carry-over basis.

Principles of Combination —FTAI Infrastructure has elected the principles of Combined Consolidated Financial Statements as the basis of presentation for the periods through the Separation Date due to common ownership and management of the entities, which includes the financial results of the Railroad, Jefferson Terminal, Repauno, Power and Gas, and Sustainability and Energy Transition segments.

Cash and Cash Equivalents —The Cash and Cash Equivalents reflected in the financial statements through the Separation Date are Cash and Cash Equivalents that were legally held by FTAI Infrastructure during the periods presented in the financial statements and are directly attributed to and used in the operations of FTAI Infrastructure.

Debt and the Corresponding Interest Expense — The Debt reflected in the financial statements through the Separation Date is debt that is directly attributable to, and legally incurred by, FTAI Infrastructure.

The corresponding interest expense presented in the financial statements is derived solely from the Debt directly attributed to FTAI Infrastructure.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Corporate Function —The Combined Consolidated Financial Statements include all revenues and costs directly attributable to FTAI Infrastructure and an allocation of certain expenses.

The Parent is externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), which performs the Parent’s corporate function (“Corporate”), and incurs a variety of expenses including, but not limited to, information technology, accounting, treasury, tax, legal, corporate finance and communications.

For purposes of the Combined Consolidated Statements of Operations, an allocation of these expenses is included to reflect our portion of such corporate overhead from the Parent.

The charges reflected have either been specifically identified or allocated based on an estimate of time spent on FTAI Infrastructure’s businesses.

Corporate Function —For the periods through the Separation Date, the Combined Consolidated Financial Statements include all revenues and costs directly attributable to FTAI Infrastructure and an allocation of certain expenses.

The Former Parent is externally managed by the Manager, which performs the Former Parent’s corporate function, and incurs a variety of expenses including, but not limited to, information technology, accounting, treasury, tax, legal, corporate finance and communications.

For purposes of the Combined Consolidated Statements of Operations, an allocation of these expenses is included to reflect our portion of such corporate overhead from the Former Parent.

The charges reflected have either been specifically identified or allocated based on an estimate of time spent on FTAI Infrastructure.

These allocated costs are recorded in general and administrative, and acquisition and transaction expenses in the Combined Consolidated Statements of Operations.

We believe the assumptions regarding allocations of the Parent’s Corporate expenses are reasonable.

Nevertheless, the allocations may not be indicative of the actual expense that would have been incurred had FTAI Infrastructure operated as an independent, standalone public entity, nor are they indicative of FTAI Infrastructure’s future expenses.

Actual costs that may have been incurred if we had been a standalone company would depend on a number of factors, including the organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure.

We have entered into an arrangement with the Manager in connection with the separation which has an initial term of six years .

The Parent funded our operating and investing activities as needed.

Cash transfers to and from the Parent are reflected in the Combined Consolidated Statements of Cash Flows as “Net transfers from Parent”.

Refer to Note 16 for additional discussion on corporate costs allocated from the Parent that are included in these Combined Consolidated Financial Statements .

Unaudited Interim Financial Information —The accompanying interim Combined Consolidated Balance Sheet as of June 30, 2022, and the Combined Consolidated Statements of Operations, Comprehensive Loss, Changes in Equity and Cash Flows for the three and six months ended June 30, 2022 and 2021 are unaudited.

These unaudited interim Combined Consolidated Financial Statements have been prepared in accordance with U.S.

In the opinion of our management, the unaudited interim Combined Consolidated Financial Statements have been prepared on the same basis as the audited Combined Consolidated Financial Statements and include all adjustments necessary for the fair presentation of our financial position as of June 30, 2022, the results of operations, comprehensive loss, changes in equity and cash flows for the three and six months ended June 30, 2022 and 2021.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other period.

Principles of Combination —FTAI Infrastructure has elected the principles of Combined Consolidated Financial Statements as basis of presentation due to common ownership and management of the entities, which includes the financial results of the Jefferson Terminal, Transtar, and Ports and Terminals segments, and KRS and FYX, which are included in the Corporate and Other segment.

We believe the assumptions regarding allocations of the Former Parent’s Corporate expenses are reasonable.

Actual costs that may have been incurred if FTAI Infrastructure had been a standalone company would depend on a number of factors, including the organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure.

The Former Parent funded FTAI Infrastructure’s operating and investing activities as needed.

Cash transfers to and from the Former Parent are reflected in the Combined Consolidated Statements of Cash Flows as “Net transfers from Former Parent”.

Refer to Note 16 for additional discussion on corporate costs allocated from the Former Parent that are included in these Combined Consolidated Financial Statements .

Subsequent to the Separation Date, the Company operated as a standalone company based on actual expenses incurred.

Unaudited Interim Financial Information —The accompanying interim Consolidated Balance Sheet as of September 30, 2022, and the Consolidated and Combined Consolidated Statements of Operations, Comprehensive Loss, Changes in Equity and Cash Flows for the three and nine months ended September 30, 2022 and 2021 are unaudited.

These unaudited interim Consolidated and Combined Consolidated Financial Statements have been prepared in accordance with U.S.

In the opinion of our management, the unaudited interim Consolidated and Combined Consolidated Financial Statements include all adjustments necessary for the fair presentation of our financial position as of September 30, 2022, the results of operations, comprehensive loss, changes in equity and cash flows for the three and nine months ended September 30, 2022 and 2021.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other period.

Principles of Consolidation — We consolidate all entities in which we have a controlling financial interest and control over significant operating decisions, as well as variable interest entities (“VIEs”) in which we are the primary beneficiary.

5 unchanged sentences

Use of Estimates — The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period, including allocations from the Parent.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated and Combined Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period, including allocations from the Former Parent during the period prior to the spin-off.

Actual results could differ from those estimates.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Risks and Uncertainties — In the normal course of business, we encounter several significant types of economic risk including credit, market, and capital market risks.

6 unchanged sentences

A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Delaware River Partners LLC

4 unchanged sentences

We concluded that we were the primary beneficiary;

and accordingly, DRP has been presented on a consolidated basis in the accompanying Combined Consolidated Financial Statements.

Total VIE assets of DRP were $ 331.2 million and $ 316.5 million, and total VIE liabilities of DRP were $ 48.2 million and $ 32.6 million as of June 30, 2022 and December 31, 2021, respectively.

and accordingly, DRP has been presented on a consolidated basis in the accompanying Consolidated and Combined Consolidated Financial Statements.

Total VIE assets of DRP were $ 322.0 million and $ 316.5 million, and total VIE liabilities of DRP were $ 43.8 million and $ 32.6 million as of September 30, 2022 and December 31, 2021, respectively.

Cash and Cash Equivalents — We consider all highly liquid short-term investments with a maturity of 90 days or less when purchased to be cash equivalents.

Restricted Cash — Restricted cash consists of prepaid interest and principal pursuant to the requirements of certain of our debt agreements (see Note 8) and other qualifying construction projects at Jefferson Terminal.

Other Current Assets —Other current assets is primarily comprised of deferred financing fees and stock issuance costs of $ 25.7 million and $ — million , commodities inventory of $ 5.9 million and $ 6.8 million, deposits of $ 18.2 million and $ 17.2 million, note receivable of $ 5.0 million and $ 7.5 million, prepaid expenses of $ 20.8 million and $ 17.4 million, and other assets of $ 17.1 million and $ 11.9 million as of June 30, 2022 and December 31, 2021, respectively.

Other Current Assets —Other current assets is primarily comprised of commodities inventory of $ 4.6 million and $ 6.8 million, deposits of $ 28.6 million and $ 17.2 million, note receivable of $ 20.0 million and $ 7.5 million, prepaid expenses of $ 17.2 million and $ 17.4 million, and other assets of $ 7.4 million and $ 11.9 million as of September 30, 2022 and December 31, 2021, respectively.

Property, Plant, and Equipment, Leasing Equipment and Depreciation — Property, plant and equipment and leasing equipment are stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over their estimated useful lives, to estimated residual values which are summarized as follows:

22 unchanged sentences

Significant spare parts are depreciated in conjunction with the underlying property, plant and equipment asset when placed in service.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

We review our depreciation policies on a regular basis to determine whether changes have taken place that would suggest that a change in our depreciation policies, useful lives of our equipment or the assigned residual values is warranted.

2 unchanged sentences

Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use.

We capitalized interest of $ 2.2 million, $ 4.3 million, $ 1.0 million, and $ 3.4 million during the three and six months ended June 30, 2022 and 2021, respectively.

We capitalized interest of $ 2.6 million, $ 6.9 million, $ 2.5 million, and $ 5.9 million during the three and nine months ended September 30, 2022 and 2021, respectively.

Repairs and Maintenance —Repair and maintenance costs that do not extend the lives of the assets are expensed as incurred.

Our repairs and maintenance expense were $ 4.0 million, $ 5.4 million, $ 0.8 million, and $ 1.7 million during the three and six months ended June 30, 2022 and 2021, respectively, and are included in Operating expenses in the Combined Consolidated Statements of Operations.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Our repairs and maintenance expense were $ 3.9 million, $ 9.3 million, $ 1.6 million, and $ 3.3 million during the three and nine months ended September 30, 2022 and 2021, respectively, and are included in Operating expenses in the Consolidated and Combined Consolidated Statements of Operations.

Impairment of Long-Lived Assets —We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable.

7 unchanged sentences

Goodwill —Goodwill includes the excess of the purchase price over the fair value of the net tangible and intangible assets associated with the acquisition of Jefferson Terminal, Transtar and FYX.

The carrying amount of goodwill was approximately $ 262.8 million and $ 257.1 million as of June 30, 2022 and December 31, 2021, respectively.

The carrying amount of goodwill was approximately $ 263.1 million and $ 257.1 million as of September 30, 2022 and December 31, 2021, respectively.

We review the carrying values of goodwill at least annually to assess impairment since these assets are not amortized.

5 unchanged sentences

A qualitative analysis was not elected for the year ended December 31, 2021.

We estimate the fair value of the Jefferson and Transtar reporting units using an income approach, specifically a discounted cash flow analysis.

We estimate the fair value of the reporting units 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, the timing of future cash flows, and discount rates.

3 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.

Due to the acquisition of Transtar in the current year, the estimated fair value of that reporting unit approximates the book value.

The Jefferson reporting unit had an estimated fair value that exceeded its carrying value by more than 10% but less than 20% as of October 1, 2021.

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, 2021.

The Jefferson Terminal segment 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 and is subject to obtaining rail capacity for crude, expansion of refined product distribution to Mexico and movements in future oil spreads.

4 unchanged sentences

and Canada, are expected to result in increased demand for storage on the U.S.

Although we do not have significant direct exposure to volatility of crude oil prices, changes in crude oil pricing that affect long term refining planned output could impact Jefferson Terminal operations.

Although we do not have

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

significant direct exposure to volatility of crude oil prices, changes in crude oil pricing that affect long term refining planned output could impact Jefferson Terminal operations.

We expect the Jefferson Terminal segment to continue to generate positive Adjusted EBITDA in future years.

1 unchanged sentence

Further delays in executing these contracts or achieving our projections could adversely affect the fair value of the reporting unit.

The impact of the COVID-19 global pandemic during 2020 and 2021 negatively affected refining volumes and therefore Jefferson Terminal crude throughput but we have seen the activity starting to normalize and are expected to ramp back to pre-pandemic levels during 2022.

The impact of the COVID-19 global pandemic during 2020 and 2021 negatively affected refining volumes and therefore Jefferson Terminal crude throughput but we have seen the activity starting to normalize and have ramped back up to pre-pandemic levels during 2022.

Furthermore, we anticipate strengthening macroeconomic demand for storage and the increasing spread between Western Canadian Crude and Western Texas Intermediate as Canadian crude pipeline apportionment increases.

Also, as our pipeline connections became fully operational during 2021, we remain positive for the outlook of Jefferson Terminal's earnings potential.

There were no impairments of goodwill for the three and six months ended June 30, 2022 and 2021.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

There were no impairments of goodwill for the three and nine months ended September 30, 2022 and 2021.

Intangibles and amortization —Intangible assets include the value of existing customer relationships acquired in connection with the acquisition of Jefferson Terminal and Transtar.

Customer relationship intangible assets are amortized on a straight-line basis over their useful lives as the pattern in which the asset’s economic benefits are consumed cannot reliably be determined.

Customer relationship intangible assets have useful lives ranging from 5 to 15 years, no estimated residual value, and amortization is recorded as a component of Depreciation and amortization in the Combined Consolidated Statements of Operations.

The weighted-average remaining amortization period for customer relationships was 151 months and 154 months as of June 30, 2022 and December 31, 2021, respectively.

The weighted-average remaining amortization period for customer relationships was 149 months and 154 months as of September 30, 2022 and December 31, 2021, respectively.

Deferred Financing Costs —Costs incurred in connection with obtaining long-term financing are capitalized and amortized to interest expense over the term of the underlying loans .

Unamortized deferred financing costs of $ 20.1 million and $ 21.5 million as of June 30, 2022 and December 31, 2021, respectively, are included in Debt, net in the Combined Consolidated Balance Sheets.

Amortization expense was $ 0.9 million, $ 1.7 million, $ 0.6 million and $ 1.1 million for the three and six months ended June 30, 2022 and 2021, respectively, and is included in Interest expense in the Combined Consolidated Statements of Operations.

Other Assets —Other Assets primarily consists of $ 10.0 million of note receivable as of both June 30, 2022 and December 31, 2021 from CarbonFree, a business that develops technologies to capture carbon dioxide from industrial emissions sources.

Accounts Payable and Accrued Liabilities —Accounts payable and accrued liabilities primarily include payables relating to construction projects, interline payables to other railroads, accrued compensation and interest.

Other Current Liabilities —Other current liabilities primarily include environmental liabilities of $ 4.1 million and $ 4.1 million, and insurance premium liabilities of $ 2.8 million and $ 1.7 million as of June 30, 2022 and December 31, 2021, respectively.

Unamortized deferred financing costs of $ 31.5 million and $ 21.5 million as of September 30, 2022 and December 31, 2021, respectively, are included in Debt, net in the Consolidated and Combined Consolidated Balance Sheets.

Amortization expense was $ 1.3 million, $ 3.0 million, $ 0.7 million and $ 1.8 million for the three and nine months ended September 30, 2022 and 2021, respectively, and is included in Interest expense in the Consolidated and Combined Consolidated Statements of Operations.

Other Assets —Other Assets primarily consists of $ 10.0 million of note receivable as of both September 30, 2022 and December 31, 2021 from CarbonFree, a business that develops technologies to capture carbon dioxide from industrial emissions sources.

Additionally, the Other Assets balance included $ 5.1 million and $ 2.9 million of spare parts for the Railroad segment at September 30, 2022 and December 31, 2021, respectively.

Other Current Liabilities —Other current liabilities primarily include environmental liabilities of $ 4.1 million and $ 4.1 million, and insurance premium liabilities of $ 1.5 million and $ 1.7 million as of September 30, 2022 and December 31, 2021, respectively.

Redeemable Preferred Stock —We classify the Series A Senior Preferred Stock ("Redeemable Preferred Stock") as temporary equity in the Consolidated and Combined Consolidated Balance Sheets due to certain contingent redemption clauses that are at the election of the holders.

The carrying value of the Redeemable Preferred Stock is accreted to the redemption value at the earliest redemption date, which has been determined to be August 1, 2030.

We use the interest method to accrete to the redemption value.

Terminal Services Revenues —Terminal services are provided to customers for the receipt and redelivery of various commodities.

9 unchanged sentences

The invoicing railroad then pays the other railroads its portion of the total amount invoiced on a monthly basis.

We record revenue related to interline traffic for transportation service segments provided by carriers along railroads that are not owned or controlled by us on a net basis.

We record revenue related to interline traffic for transportation service segments provided by carriers along

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

railroads that are not owned or controlled by us on a net basis.

Interline revenues are recognized as the transportation movements occur.

15 unchanged sentences

Revenues are typically invoiced for each repair and generally have 30-day payment terms.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Payment terms for Revenues are generally short term in nature.

Leasing Arrangements — At contract inception, we evaluate whether an arrangement is or contains a lease for which we are the lessee (that is, arrangements which provide us with the right to control a physical asset for a period of time).

Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized in Operating lease right-of-use assets, net and Operating lease liabilities in our Combined Consolidated Balance Sheets, respectively.

Finance lease ROU assets are recognized in Property, plant and equipment, net and lease liabilities are recognized in Other current liabilities and Other liabilities in our Combined Consolidated Balance Sheets.

Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized in Operating lease right-of-use assets, net and Operating lease liabilities within current liabilities and non-current liabilities in our Consolidated and Combined Consolidated Balance Sheets, respectively.

Finance lease ROU assets are recognized in Property, plant and equipment, net and lease liabilities are recognized in Other current liabilities and Other liabilities in our Consolidated and Combined Consolidated Balance Sheets.

All lease liabilities are measured at the present value of the unpaid lease payments, discounted using our incremental borrowing rate based on the information available at commencement date of the lease.

9 unchanged sentences

We attempt to limit our credit risk by performing ongoing credit evaluations.

We earned approximately 11 % and 10 % of our revenue for the three and six months ended June 30, 2022 from one customer in the Jefferson Terminal segment, respectively.

Additionally, for the three months ended June 30, 2022, one customer from the Ports and Terminal segment accounted for 21 % of our revenue.

For the three months ended June 30, 2021, we earned 33 %, 21 %, and 16 % of our revenues from three customers in the Jefferson Terminal segment.

For the six months ended June 30, 2021, we earned 26 %, 16 %, and 13 % of our revenues from three customers in the Jefferson Terminal segment.

During the three and six months ended June 30, 2022, one customer in the Transtar segment accounted for approximately 54 % and 61 % of total revenue, respectively.

As of June 30, 2022, accounts receivable from three customers from the Jefferson Terminal, Ports and Terminals, and Transtar segments represented 59 % of total accounts receivable, net.

As of December 31, 2021, accounts receivable from two customers from the Jefferson Terminal and Transtar segments represented 48 % of total accounts receivable, net.

During the three and nine months ended September 30, 2022, one customer in the Railroad segment accounted for approximately 44 % and 54 % of total revenue, respectively.

Additionally, we earned approximately 10 % of our revenue for the nine months ended September 30, 2022 from one customer in the Jefferson Terminal segment.

For the three and nine months ended September 30, 2021, we earned 13 % and 20 % of our revenues from one customer in the Jefferson Terminal segment, respectively.

For the three and nine months ended September 30, 2021, we earned approximately 26 % and 10 % of our revenue from one customer in the Railroad segment, respectively.

As of September 30, 2022 and December 31, 2021, accounts receivable from two customers from the Jefferson Terminal and Railroad segments represented 44 % and 48 % of total accounts receivable, net, respectively.

We maintain cash and restricted cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions.

We monitor the financial condition of these institutions and have not experienced any losses associated with these accounts.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Allowance for Doubtful Accounts — We determine the allowance for doubtful accounts based on our assessment of the collectability of our receivables on a customer-by-customer basis.

3 unchanged sentences

Comprehensive Income (Loss) — Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners.

Our comprehensive income (loss) represents net income (loss), as presented in the Combined Consolidated Statements of Operations, adjusted for fair value changes recorded in other comprehensive income related to cash flow hedges of our equity method investees and pension and other postretirement benefits.

Our comprehensive income (loss) represents net income (loss), as presented in the Consolidated and Combined Consolidated Statements of Operations, adjusted for fair value changes recorded in other comprehensive income (loss) related to cash flow hedges of our equity method investees and pension and other postretirement benefits.

Derivative Financial Instruments

2 unchanged sentences

Cash Flow Hedges

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Certain of these derivative instruments are designated and qualify as cash flow hedges.

Our share of the derivative's gain or loss is reported as Other comprehensive income (loss) related to equity method investees, net in our Combined Consolidated Statements of Comprehensive Loss and recorded in Accumulated other comprehensive income in our Combined Consolidated Balance Sheets.

The change in our equity method investment balance related to derivative gains or losses on cash flow hedges is disclosed as a Non-cash change in equity method investment in our Combined Consolidated Statements of Cash Flows.

Our share of the derivative's gain or loss is reported as Other comprehensive income (loss) related to equity method investees, net in our Consolidated and Combined Consolidated Statements of Comprehensive Loss and recorded in Accumulated other comprehensive income (loss) in our Consolidated and Combined Consolidated Balance Sheets.

Derivatives Not Designated As Hedging Instruments

Certain of these derivative instruments are not designated as hedging instruments for accounting purposes.

Our share of the change in fair value of these contracts is recognized in Equity in earnings (losses) in unconsolidated entities in the Combined Consolidated Statements of Operations.

The cash flow impact of derivative contracts that are not designated as hedging instruments is recognized in Equity in losses (earnings) in unconsolidated entities in our Combined Consolidated Statements of Cash Flows.

Our share of the change in fair value of these contracts is recognized in Equity in earnings (losses) in unconsolidated entities in the Consolidated and Combined Consolidated Statements of Operations.

The cash flow impact of derivative contracts that are not designated as hedging instruments is recognized in Equity in earnings (losses) in unconsolidated entities in our Consolidated and Combined Consolidated Statements of Cash Flows.

Commodity Derivatives — Depending on market conditions, we enter into short-term forward purchase and sales contracts for butane.

Gains and losses related to our butane derivatives are recorded on a net basis and are included in Other revenue in our Combined Consolidated Statements of Operations, as these contracts are considered part of central operating activities.

The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Combined Consolidated Statements of Cash Flows.

We record all derivative assets on a gross basis at fair value, which are included in Other current assets, in our Combined Consolidated Balance Sheets.

Income Taxes —The income tax provision in the Combined Consolidated Financial Statements was prepared on a separate return method.

Income earned by our corporate subsidiaries for the infrastructure businesses is subject to U.S.

federal and state income taxation and is taxed at the currently enacted rates.

Following the spin-off, all of our income is subject to a corporate level of taxation.

Gains and losses related to our butane derivatives are recorded on a net basis and are included in Other revenue in our Consolidated and Combined Consolidated Statements of Operations, as these contracts are considered part of central operating activities.

The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated and Combined Consolidated Statements of Cash Flows.

We record all derivative assets on a gross basis at fair value, which are included in Other current assets, in our Consolidated and Combined Consolidated Balance Sheets.

Income Taxes —Prior to the spin-off, we were taxed as a disregarded entity for U.S.

federal income tax purposes and our taxable income or loss generated was the responsibility of our Former Parent, except as related to certain wholly owned corporate subsidiaries of the infrastructure business.

The income tax provision included in the Consolidated and Combined Consolidated Financial Statements prior to the spin-off was prepared on a separate return method.

Post spin-off, FTAI Infrastructure’s tax profile, certain return elections and assertions are different, including a single consolidated Federal tax filing in the U.S., and therefore the income taxes presented prior to the spin-off in the Consolidated and Combined Financial Statements are not expected to be indicative of the Company’s future income taxes.

We account for these taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

A valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized.

Each of our combined entities files income tax returns in the U.S.

Some of our entities file income tax returns in the U.S.

federal jurisdiction, various state jurisdictions and in certain foreign jurisdictions.

2 unchanged sentences

We recognize tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits.

Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in the Combined Consolidated Statements of Operations.

Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in the Consolidated and Combined Consolidated Statements of Operations.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Pension and Other Postretirement Benefits —We have obligations for a pension and a postretirement benefit plan in connection with the acquisition of Transtar for certain eligible Transtar employees.

3 unchanged sentences

This excess is amortized over the average remaining service period of active employees expected to receive benefits under the plan.

Refer to Note 14 for additional discussion on the pension and postretirement plans.

Refer to Note 14 for additional discussion on the pension and postretirement benefit plans.

Recent Accounting Pronouncements — In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842):

2 unchanged sentences

This standard is effective for all reporting periods beginning after December 15, 2021.

We adopted this guidance in the first quarter of 2022, which did not have a material impact on our Combined Consolidated Financial Statements.

We adopted this guidance in the first quarter of 2022, which did not have a material impact on our Consolidated or Combined Consolidated Financial Statements.

ACQUISITION OF TRANSTAR, LLC

2 unchanged sentences

We also entered into an exclusive rail partnership with USS, under which we will provide rail service to USS for an initial term of 15 years with minimum volume commitments for the first five years .

Transtar operates as a separate reportable segment.

Transtar operates within the Railroad reportable segment.

See Note 17 for additional information.

The results of operations at Transtar have been included in the Combined Consolidated Statements of Operations as of the effective date of the acquisition.

In connection with the acquisition, we recorded $ 2.4 million and $ 3.0 million of acquisition and transaction expense during the three and six months ended June 30, 2021, respectively.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The Parent funded the transaction with bridge loans in an aggregate principal amount of $ 650 million.

In September 2021, the Parent issued new equity and debt and repaid in full the bridge loans.

In accordance with ASC 805, Business Combinations , the following fair values assigned to assets acquired and liabilities assumed are preliminary based on management’s estimates and assumptions.

The results of operations at Transtar have been included in the Consolidated and Combined Consolidated Statements of Operations as of the effective date of the acquisition.

In connection with the acquisition, we recorded $ 4.0 million and $ 7.0 million of acquisition and transaction expense during the three and nine months ended September 30, 2021, respectively.

The Former Parent funded the transaction with bridge loans in an aggregate principal amount of $ 650 million.

In September 2021, the Former Parent issued new equity and debt and repaid in full the bridge loans.

In accordance with ASC 805, Business Combinations , the following fair values assigned to assets acquired and liabilities assumed are based on management’s estimates and assumptions.

The significant assumptions used to estimate the fair value of the property, plant and equipment included replacement cost estimates, salvage values and market data for similar assets where available.

The significant assumptions used to estimate the value of the customer relationship intangible assets included discount rate and future revenues and operating expenses.

The final valuation and related allocation of the purchase price is subject to change as additional information is received and will be completed no later than 12 months after the closing date.

Such adjustments are not expected to be material.

The following table summarizes the preliminary allocation of the purchase price, as presented in our Combined Consolidated Balance Sheets:

The following table summarizes the allocation of the purchase price, as presented in our Combined Consolidated Balance Sheet:

Fair value of assets acquired:

14 unchanged sentences

________________________________________________________

(1) Included in Other liabilities in the Combined Consolidated Balance Sheets.

(1) Included in Other liabilities in the Combined Consolidated Balance Sheet.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

(2) Goodwill is primarily attributable to the assembled workforce of Transtar and the synergies expected to be achieved.

This goodwill is assigned to the new Transtar segment and is tax deductible for income tax purposes.

This goodwill is assigned to the Railroad segment and is tax deductible for income tax purposes.

The following table presents the identifiable intangible assets and their estimated useful lives:

3 unchanged sentences

The following table presents the property, plant and equipment and their estimated remaining useful lives:

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Estimated remaining useful life in years Fair value

18 unchanged sentences

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2020.

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

Total revenue $ 47,059 $ 152,217

Net loss attributable to Parent ( 13,362 ) ( 12,486 )

Net loss attributable to Former Parent ( 25,148 ) ( 37,634 )

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Leasing equipment $ 44,179 $ 44,179

2 unchanged sentences

Depreciation expense for leasing equipment is summarized as follows:

Three Months Ended June 30, Six Months Ended June 30,

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Depreciation expense for leasing equipment $ 276 $ 276 $ 828 $ 828

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net is summarized as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Land, site improvements and rights $ 175,121 $ 149,914

Construction in progress 254,246 118,081

Bridges and tunnels 174,155 174,889

Buildings and improvements 19,334 19,164

Bridges and Tunnels 173,868 174,889

Terminal machinery and equipment 974,517 962,552

8 unchanged sentences

Property, plant and equipment, net $ 1,641,373 $ 1,517,594

During the six months ended June 30, 2022, we added property, plant and equipment of $ 111.4 million, which primarily consisted of assets terminal machinery, equipment placed in service or land under development at Jefferson Terminal.

During the nine months ended September 30, 2022, we added property, plant and equipment of $ 169.7 million, which primarily consisted of terminal machinery and equipment placed in service or land under development at Jefferson Terminal.

Depreciation expense for property, plant and equipment is summarized as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Carrying Value

Investment Ownership Percentage June 30, 2022 December 31, 2021

Investment Ownership Percentage September 30, 2022 December 31, 2021

Intermodal Finance I, Ltd.

3 unchanged sentences

FYX Trust Holdco LLC (2)

Equity at December 31, 2021 65 % and 14 % as of June 30, 2022 and December 31, 2021, respectively (2)

Equity at December 31, 2021 65 % and 14 % as of September 30, 2022 and December 31, 2021, respectively (2)

GM-FTAI Holdco LLC Equity method See below 70,083 52,295

2 unchanged sentences

________________________________________________________

(1) The carrying value of $ 188.0 million and $ 17.5 million as of June 30, 2022 and December 31, 2021 is included in Other liabilities in the Combined Consolidated Balance Sheets.

(1) The carrying value of $ 235.2 million and $ 17.5 million as of September 30, 2022 and December 31, 2021 is included in Other liabilities in the Consolidated and Combined Consolidated Balance Sheets.

(2) See “Equity Investments - FYX Holdco LLC” below for additional information regarding the FYX Trust Holdco LLC acquisition in May 2022.

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2022 and 2021.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

We did not recognize any other-than-temporary impairments for the three and nine months ended September 30, 2022 and 2021.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents our proportionate share of equity in (losses) income:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

13 unchanged sentences

We do not have a variable interest in this investment as none of the criteria of ASC 810-10-15-14 were met.

As of June 30, 2022, Intermodal owns a portfolio of approximately 500 shipping containers subject to multiple operating leases.

As of September 30, 2022, Intermodal owns a portfolio of approximately 500 shipping containers subject to multiple operating leases.

Long Ridge Terminal LLC

2 unchanged sentences

Following the sale, we deconsolidated ORP, which held the assets of Long Ridge.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The tables below present summarized financial information for Long Ridge Terminal LLC:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Balance Sheet

25 unchanged sentences

Total liabilities and members' equity $ 966,712 $ 926,675

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Income Statement 2022 2021 2022 2021

4 unchanged sentences

Total expenses 45,696 12,019 129,091 31,388

Total other expense ( 149 ) ( 11,825 ) ( 213 ) ( 8,826 )

Total other income (expense) 11 ( 16,614 ) ( 202 ) ( 25,440 )

Net loss $ ( 18,408 ) $ ( 7,562 ) $ ( 86,973 ) $ ( 18,487 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

10 unchanged sentences

In addition, we also terminated our credit agreements with GMR and Aleon in exchange for an approximate 8.5 % of additional interest in Class A shares.

At June 30, 2022 as a result of these exchange transactions, we own approximately 27 % of GM-FTAI Holdco LLC, which owns 100 % of both GMR and Aleon.

As a result of these exchange transactions, we own approximately 27 % of GM-FTAI Holdco LLC, which owns 100 % of both GMR and Aleon.

Clean Planet Energy USA LLC

In November 2021, we acquired 50 % of the Class A shares of Clean Planet Energy USA LLC (“CPE”) with an initial investment of $ 1.0 million.

In November 2021, we acquired 50 % of the Class A shares of Clean Planet Energy USA LLC (“Clean Planet”) with an initial investment of $ 1.0 million.

CPE intends on building waste plastic-to-fuel plants in the United States.

6 unchanged sentences

In May 2022, we purchased an additional 51 % interest in FYX from an unrelated third party for a purchase price of $ 4.6 million, which resulted in our ownership of a majority stake in the entity.

From the purchase date in May 2022 through and as of June 30, 2022, FYX is presented on a consolidated basis in the Combined Consolidated Statement of Operations and the Combined Consolidated Balance Sheets.

$ 4.2 million is recorded as non-controlling interest for interest held by other parties at June 30, 2022.

From the purchase date in May 2022 through and as of September 30, 2022, FYX is presented on a consolidated basis in the Consolidated and Combined Consolidated Statements of Operations and the Consolidated and Combined Consolidated Balance Sheets.

At September 30, 2022, $ 4.2 million is recorded as non-controlling interest for interest held by other parties.

At the purchase date, assets of FYX were $ 13.7 million, liabilities were $ 10.1 million, and goodwill of $ 5.4 million was recorded.

2 unchanged sentences

Intangible assets, net are summarized as follows:

June 30, 2022

Jefferson Terminal Transtar Total

September 30, 2022

Jefferson Terminal Railroad Total

Intangible assets

3 unchanged sentences

December 31, 2021

Jefferson Terminal Transtar Total

Jefferson Terminal Railroad Total

Intangible assets

2 unchanged sentences

Intangible assets, net $ 9,475 $ 58,262 $ 67,737

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Amortization of intangible assets is as follows:

Classification in Combined Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30,

Classification in Consolidated and Combined Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Customer relationships Depreciation and amortization $ 1,897 $ 1,671 $ 5,657 $ 3,448

As of June 30, 2022, estimated net annual amortization of intangibles is as follows:

As of September 30, 2022, estimated net annual amortization of intangibles is as follows:

Remainder of 2022 $ 1,888

1 unchanged sentence

Total $ 62,081

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Our debt, net is summarized as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

14 unchanged sentences

(i) 1/1/26 to 1/1/50

Senior Notes due 2027 (2)

473,822 10.500 % 6/1/27 —

Total bonds payable 1,162,802 688,980

5 unchanged sentences

(1) Requires a quarterly commitment fee at a rate of 1.00 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

We were in compliance with all debt covenants as of June 30, 2022.

(2) Includes an unamortized discount of $ 26,178 and $ — at September 30, 2022 and December 31, 2021, respectively.

Senior Notes due 2027 —In connection with the spin-off, we issued $ 500 million aggregate principal amount of 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, commencing on December 1, 2022.

The 2027 Notes were issued at an issue price equal to 94.585 %.

We were in compliance with all debt covenants as of September 30, 2022.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

FAIR VALUE MEASUREMENTS

8 unchanged sentences

• Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following tables set forth our financial assets measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, by level within the fair value hierarchy.

The following tables set forth our financial assets measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, by level within the fair value hierarchy.

Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of

June 30, 2022 June 30, 2022

September 30, 2022 September 30, 2022

Total Level 1 Level 2 Level 3 Valuation Technique

12 unchanged sentences

These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy.

The fair value of our commodity derivative assets are classified as Level 2 measurements are estimated by applying the income and market approaches, based on quotes of observable market transactions, and adjusted for estimated differential factors based on quality and delivery locations.

The fair value of our commodity derivative assets that are classified as Level 2 measurements are estimated by applying the income and market approaches, based on quotes of observable market transactions, and adjusted for estimated differential factors based on quality and delivery locations.

Except as discussed below, our financial instruments other than cash and cash equivalents and restricted cash consist principally of accounts receivable, notes receivable, accounts payable and accrued liabilities, loans payable, and management fees payable, whose fair values approximate their carrying values based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles.

The fair value of our bonds and notes payable reported as debt, net in the Combined Consolidated Balance Sheets are presented in the table below:

June 30, 2022 December 31, 2021

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The fair value of our bonds and notes payable reported as debt, net in the Consolidated and Combined Consolidated Balance Sheets are presented in the table below:

September 30, 2022 December 31, 2021

Series 2020 A Bonds (1)

6 unchanged sentences

156,846 194,278

2027 Notes 501,605 —

________________________________________________________

(1) Fair value is based upon market prices for similar municipal securities.

The fair value of all other items reported as debt, net in the Combined Consolidated Balance Sheets approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy.

The fair value of all other items reported as debt, net in the Consolidated and Combined Consolidated Balance Sheets approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy.

We measure the fair value of certain assets on a non-recurring basis when U.S.

3 unchanged sentences

Fair value measurements for assets subject to impairment tests are based on an income approach which uses Level 3 inputs, which include our assumptions as to future cash flows from operation of the underlying businesses.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

DERIVATIVE FINANCIAL INSTRUMENTS

3 unchanged sentences

The following table presents information related to our butane derivative contracts:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Notional Amount (BBL in thousands)

4 unchanged sentences

________________________________________________________

(1) Included in Other assets in the Combined Consolidated Balance Sheets.

(1) Included in Other assets in the Consolidated and Combined Consolidated Balance Sheets.

We disaggregate our revenue from contracts with customers by products and services provided for each of our segments, as we believe it best depicts the nature, amount, timing and uncertainty of our revenue.

1 unchanged sentence

We have elected to exclude sales and other similar taxes from revenues.

Three Months Ended June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Three Months Ended September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Lease income $ 449 $ 309 $ — $ — $ — $ — $ 758

3 unchanged sentences

Total revenues $ 39,186 $ 17,177 $ 1,879 $ — $ — $ 20,317 $ 78,559

Three Months Ended June 30, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended September 30, 2021

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Lease income $ 358 $ 433 $ — $ — $ — $ — $ 791

Rail revenues 24,986 — — — — — 24,986

Terminal services revenues — 11,469 — — — — 11,469

1 unchanged sentence

Total revenues $ 25,344 $ 11,902 $ ( 458 ) $ — $ — $ — $ 36,788

Six Months Ended June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Nine Months Ended September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Lease income $ 1,490 $ 975 $ — $ — $ — $ — $ 2,465

3 unchanged sentences

Total revenues $ 113,887 $ 44,751 $ 1,533 $ — $ — $ 30,404 $ 190,575

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Six Months Ended June 30, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Nine Months Ended September 30, 2021

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Lease income $ 358 $ 1,295 $ — $ — $ — $ — $ 1,653

Rail revenues 28,186 — — — — — 28,186

Terminal services revenues — 32,853 157 — — — 33,010

1 unchanged sentence

Total revenues $ 28,544 $ 34,148 $ 9,982 $ — $ — $ — $ 72,674

Presented below are the contracted minimum future annual revenues to be received under existing operating leases across several market sectors as of June 30, 2022:

Presented below are the contracted minimum future annual revenues to be received under existing operating leases within the Jefferson Terminal segment as of September 30, 2022:

Operating Leases

3 unchanged sentences

Our leases have remaining lease terms ranging from approximately one month to 40 years.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents lease related costs:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

7 unchanged sentences

Total lease expense $ 3,163 $ 2,225 $ 9,737 $ 5,634

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents information related to our operating leases as of and for the six months ended June 30, 2022:

The following table presents information related to our operating leases as of and for the nine months ended September 30, 2022 and the year ended December 31, 2021:

September 30, 2022

December 31, 2021

Right-of-use assets, net $ 70,567 $ 71,547

Lease liabilities 69,631 70,404

Weighted average remaining lease term 34.8 years

Weighted average remaining lease term 34.3 years 34.8 years

Weighted average incremental borrowing rate 5.7 % 5.7 %

The following table presents supplemental cash flow information for the nine months ended September 30, 2022 and 2021:

September 30, 2022

September 30, 2021

Cash paid for amounts included in the measurement of operating lease liabilities $ 5,300 $ 3,849

The following table presents future minimum lease payments under non-cancellable operating leases as of June 30, 2022:

Noncash - ROU assets recorded for new and modified leases 1,284 10,831

The following table presents future minimum lease payments under non-cancellable operating leases as of September 30, 2022:

Remainder of 2022 $ 1,719

4 unchanged sentences

EQUITY-BASED COMPENSATION

Some of our subsidiaries provide an equity-based incentive plan for eligible employees.

The following table presents our stock-based compensation expense recognized in the Combined Consolidated Statements of Operations:

Three Months Ended June 30, Six Months Ended June 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

Effective August 1, 2022, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the issuance of up to 30 million shares at inception.

The Incentive Plan provides us the ability to grant equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

We account for equity-based compensation expense in accordance with ASC 718 Compensation-Stock Compensation and it is reported within operating expenses and general and administrative in the Consolidated and Combined Consolidated Statements of Operations.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents our stock-based compensation expense recognized in the Consolidated and Combined Consolidated Statements of Operations:

Three Months Ended September 30, Nine Months Ended September 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

2022 2021 2022 2021

Restricted Shares $ 538 $ 1,270 $ 1,076 $ 2,111 $ 2,655 0.8 years

Common Units 418 169 589 442 4,227 1.2 years

Restricted Shares $ 430 $ 553 $ 1,506 $ 2,664 $ 2,025 0.6

Common Units 947 175 1,536 617 3,277 1.0

Total $ 1,377 $ 728 $ 3,042 $ 3,281 $ 5,302

During the six months ended June 30, 2022, we issued common units of our subsidiary that had a grant date fair value of $ 1.9 million and vest over three years .

During the nine months ended September 30, 2022, we issued common units of our subsidiary that had a grant date fair value of $ 1.9 million and vest over three years .

These awards are subject to continued employment, and the compensation expense is recognized ratably over the vesting periods.

1 unchanged sentence

Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date.

Additionally, during the six months ended June 30, 2022, we issued separate common units of our subsidiary that had a grant date fair value of $ 1.9 million and vest over three years .

Additionally, during the nine months ended September 30, 2022, we issued separate common units of our subsidiary that had a grant date fair value of $ 1.9 million and vest over three years .

These awards are subject to performance targets based on EBITDA as defined in the agreements, and the total expected compensation expense is recognized ratably over the vesting periods if it is probable that the performance conditions will be met.

1 unchanged sentence

Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Stock Options

In connection with our Redeemable Preferred Stock raise (see Note 18 for details), we granted to the Manager 10.9 million options to purchase common shares.

These options had a grant date fair value of $ 18.1 million, which was recorded in stockholders’ equity and treated as an issuance cost of the Redeemable Preferred Stock.

The fair value of these options was based on a Binomial Lattice Model and inputs were based on information available at the measurement date.

The assumptions used in valuing the options were:

a 2.58 % risk-free rate, a 3.6 % dividend yield, a 60 % volatility, an early exercise multiple of 2.5 x and a ten-year term.

RETIREMENT BENEFIT PLANS

9 unchanged sentences

The remaining healthcare and life insurance plans are non-contributory.

The following table summarizes our retirement benefit plan costs for the three and six months ended June 30, 2022.

Service costs and interest costs are recorded in Operating expenses and Other (expense) income, respectively, in the Combined Consolidated Statements of Operations.

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

The following table summarizes our retirement benefit plan costs for the three and nine months ended September 30, 2022.

Service costs and interest costs are recorded in Operating expenses and Other (expense) income, respectively, in the Consolidated and Combined Consolidated Statements of Operations.

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

2 unchanged sentences

Total $ 512 $ 763 $ 1,535 $ 2,288

The total amount of employer contributions paid for the six months ended June 30, 2022 was $ 0.3 million, and the expected remaining scheduled employer contributions for the year ending December 31, 2022 is $ 1.2 million.

The current and deferred components of the income tax benefit included in the Combined Consolidated Statements of Operations are as follows:

Three Months Ended June 30, Six Months Ended June 30,

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The total amount of employer contributions paid for the three and nine months ended September 30, 2022 was $ 1.1 million and $ 1.4 million, respectively, and the expected remaining scheduled employer contributions for the year ending December 31, 2022 is $ 0.3 million.

The current and deferred components of the income tax provision (benefit) included in the Consolidated and Combined Consolidated Statements of Operations are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

9 unchanged sentences

Prior to the spin-off, we were taxed as a disregarded entity for U.S.

federal income tax purposes and our taxable income or loss generated was the responsibility of our Parent, except as related to certain wholly owned corporate subsidiaries of the infrastructure business.

Taxable income or loss generated by us following the spin-off and by our corporate subsidiaries is subject to U.S.

federal, state and foreign corporate income tax in locations where they conduct business.

A valuation allowance has been established against our net U.S.

federal and state deferred tax assets, including net operating loss carryforwards.

As a result, our income tax provision is primarily related to separate company state taxes, deferred taxes for tax deductible goodwill, and deferred taxes for certain long-lived assets.

Our effective tax rate differs from the U.S.

federal tax rate of 21% primarily due to valuation allowances against a significant portion of the deferred tax assets of our corporate subsidiaries.

As of and for the six months ended June 30, 2022, we had not established a liability for uncertain tax positions as no such positions existed.

federal tax rate of 21% primarily due to state taxes and the valuation allowances against a significant portion of the deferred tax assets of our corporate subsidiaries.

As of and for the nine months ended September 30, 2022, we had not established a liability for uncertain tax positions as no such positions existed.

In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S.

1 unchanged sentence

Generally, we are not subject to examination by taxing authorities for tax years prior to 2018.

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of June 30, 2022.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of September 30, 2022.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

The Parent, and FTAI Infrastructure as a part of the Parent as of June 30, 2022, are externally managed by the Manager.

The Manager is paid annual fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto.

We are externally managed by the Manager.

The Manager is paid annual fees and incentive fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto.

In addition, the Manager may be reimbursed for various expenses incurred by the Manager on our behalf, including the costs of legal, accounting and other administrative activities.

In May 2015, in connection with the Parent’s initial public offering (“IPO”), the Parent and the Manager entered into the Management Agreement.

Additionally, the Parent has entered into certain incentive allocation arrangements with Fortress Worldwide Transportation and Infrastructure Master GP LLC (the “Master GP”).

The Manager is entitled to a management fee, incentive allocations (comprised of Income Incentive Allocation and Capital Gains Incentive Allocation described below) and reimbursement of certain expenses.

The management fee is determined by taking the average value of total equity (excluding non-controlling interests) of the Parent determined on a consolidated basis in accordance with U.S.

On July 31, 2022, in connection with the spin-off, we and the Manager entered into the Management Agreement with an initial term of six years .

The Manager is entitled to a management fee, incentive fees (comprised of an Income Incentive Fee and a Capital Gains Incentive Fee described below) and reimbursement of certain expenses.

The management fee is determined by taking the average value of total equity (including redeemable preferred stock and excluding non-controlling interests) of the Company determined on a consolidated basis in accordance with U.S.

GAAP at the end of the two most recently completed months multiplied by an annual rate of 1.50 %, and is payable monthly in arrears in cash.

The income incentive allocation is calculated and distributable quarterly in arrears based on the pre-incentive allocation net income for the immediately preceding calendar quarter (the “Income Incentive Allocation”).

For this purpose, pre-incentive allocation net income means, with respect to a calendar quarter, net income attributable to shareholders during such quarter calculated in accordance with U.S.

GAAP excluding the Parent’s pro rata share of (1) realized or unrealized gains and losses, and (2) certain non-cash or one-time items, and (3) any other adjustments as may be approved by the independent directors.

Pre-incentive allocation net income does not include any Income Incentive Allocation or Capital Gains Incentive Allocation (described below) paid to the Master GP during the relevant quarter.

The Master GP is entitled to an Income Incentive Allocation with respect to its pre-incentive allocation net income in each calendar quarter as follows:

(1) no Income Incentive Allocation in any calendar quarter in which pre-incentive allocation net income, expressed as a rate of return on the average value of the Parent’s net equity capital (excluding non-controlling interests) at the end of the two most recently completed calendar quarters, does not exceed 2 % for such quarter ( 8 % annualized);

(2) 100 % of pre-incentive allocation net income of the Parent with respect to that portion of such pre-incentive allocation net income, if any, that is equal to or exceeds 2 % but does not exceed 2.2223 % for such quarter;

and (3) 10 % of the amount of pre-incentive allocation net income of the Parent, if any, that exceeds 2.2223 % for such quarter.

These calculations will be prorated for any period of less than three months.

Capital Gains Incentive Allocation is calculated and distributable in arrears as of the end of each calendar year and is equal to 10 % of the Parent’s pro rata share of cumulative realized gains from the date of the Parent’s IPO through the end of the applicable calendar year, net of the Parent’s pro rata share of cumulative realized or unrealized losses, the cumulative non-cash portion of equity-based compensation expenses and all realized gains upon which prior performance-based Capital Gains Incentive Allocation payments were made to the Master GP.

A portion of the management fee, income incentive allocation, and capital gains incentive allocation that are attributable to the operations of FTAI Infrastructure is recorded in the Management fees and incentive allocation to affiliate on the Combined Consolidated Statement of Operations.

The income incentive fee is calculated and distributable quarterly in arrears based on the pre-incentive fee net income for the immediately preceding calendar quarter (the “Income Incentive Fee”).

For this purpose, pre-incentive fee net income means, with respect to a calendar quarter, net income attributable to stockholders during such quarter calculated in accordance with U.S.

GAAP excluding our pro rata share of (1) realized or unrealized gains and losses, and (2) certain non-cash or one-time items, and (3) any other adjustments as may be approved by the independent directors.

Pre-incentive allocation net income does not include any Income Incentive Fee or Capital Gains Incentive Fee (described below) paid to the Manager during the relevant quarter.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The Manager is entitled to an Income Incentive Fee with respect to its pre-incentive fee net income in each calendar quarter as follows:

(1) no Income Incentive Fee in any calendar quarter in which pre-incentive fee net income, expressed as a rate of return on the average value of the Company’s net equity capital (excluding non-controlling interests) at the end of the two most recently completed calendar quarters, does not exceed 2 % for such quarter ( 8 % annualized);

(2) 100 % of pre-incentive fee net income of the Company with respect to that portion of such pre-incentive fee net income, if any, that equals or exceeds 2 % but does not exceed 2.2223 % for such quarter;

and (3) 10 % of pre-incentive fee net income of the Company, if any, that exceeds 2.2223 % for portions of such quarter.

These calculations will be prorated for any periods of less than three months.

Capital Gains Incentive Fee is calculated and paid in arrears as of the end of each calendar year and is equal to 10 % of our pro rata share of cumulative realized gains from the date of the spin-off through the end of the applicable calendar year, net of our pro rata share of cumulative realized or unrealized losses, the cumulative non-cash portion of equity-based compensation expenses and all realized gains upon which prior performance-based Capital Gains Incentive Fee payments were made to the Manager.

The management fee, income incentive allocation, and capital gains incentive allocation that are attributable to the operations of FTAI Infrastructure is recorded in the Management fees and incentive allocation to affiliate on the Consolidated and Combined Consolidated Statements of Operations.

These amounts are allocated on the following basis:

Management fee —Management fee is allocated to FTAI Infrastructure by applying the calculation methodology described above to the equity of FTAI Infrastructure included in these combined consolidated financial statements.

Income Incentive Allocation and Capital Gains Incentive Allocation —The Income Incentive Allocation and Capital Gains Incentive Allocation are allocated to FTAI Infrastructure by applying the allocation calculation methodology described above to FTAI Infrastructure’s financial results in each respective period.

The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation included in these Combined Consolidated Financial Statements:

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation included in these Consolidated and Combined Consolidated Financial Statements:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Management fees $ 2,659 $ 3,829 $ 9,885 $ 11,244

Income incentive allocation — — — —

Capital gains incentive allocation — — — —

Income Incentive Fee — — — —

Capital Gains Incentive Fee — — — —

Total $ 2,659 $ 3,829 $ 9,885 $ 11,244

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The Parent pays all of its operating expenses, except those specifically required to be borne by the Manager under the Management Agreement.

The expenses required to be paid by the Parent include, but are not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of its assets, legal and auditing fees and expenses, the compensation and expenses of the Parent’s independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of the Parent (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of the Parent, costs and expenses incurred in contracting with third parties (including affiliates of the Manager), the costs of printing and mailing proxies and reports to the Parent’s shareholders, costs incurred by the Manager or its affiliates for travel on the Parent’s behalf, costs associated with any computer software or hardware that is used by the Parent, costs to obtain liability insurance to indemnify the Parent’s directors and officers and the compensation and expenses of the Parent’s transfer agent.

The Parent will pay or reimburse the Manager and its affiliates for performing certain legal, accounting, due diligence tasks and other services that outside professionals or outside consultants otherwise would perform, provided that such costs and reimbursements are no greater than those which would be paid to outside professionals or consultants.

For periods post-spin, we pay all of our operating expenses, except those specifically required to be borne by the Manager under the Management Agreement.

For periods pre-spin, the Former Parent paid all of its operating expenses, except those specifically required to be borne by the Manager under the management agreement between the Former Parent and the Manager.

The expenses required to be paid by the Company include, but are not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of its assets, legal and auditing fees and expenses, the compensation and expenses of the Company’s independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings, costs and expenses incurred in contracting with third parties (including affiliates of the Manager), the costs of printing and mailing proxies and reports to the stockholders, costs incurred by the Manager or its affiliates for travel on our behalf, costs associated with any computer software or hardware that is used by the Company, costs to obtain liability insurance to indemnify the Company’s directors and officers and the compensation and expenses of the transfer agent.

We pay or reimburse the Manager and its affiliates for performing certain legal, accounting, due diligence tasks and other services that outside professionals or outside consultants otherwise would perform, provided that such costs and reimbursements are no greater than those which would be paid to outside professionals or consultants.

The Manager is responsible for all of its other costs incident to the performance of its duties under the Management Agreement, including compensation of the Manager’s employees, rent for facilities and other “overhead” expenses;

A portion of the Parent’s reimbursement to the Manager is allocated to FTAI Infrastructure based on an estimate of time incurred by certain of the Manager’s employees on activities related to our operations.

A portion of these reimbursable expenses that the Parent paid to the Manager and are attributable to FTAI Infrastructure are included in the Combined Consolidated Financial Statements as follows:

Three Months Ended June 30, Six Months Ended June 30,

we do not reimburse the Manager for these expenses.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes our reimbursements to the Manager:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Classification in the Combined Consolidated Statements of Operations:

Classification in the Consolidated and Combined Consolidated Statements of Operations:

General and administrative $ 581 $ 962 $ 2,809 $ 2,712

1 unchanged sentence

Total $ 630 $ 1,202 $ 3,708 $ 3,432

If the Parent terminates the Management Agreement, the Parent will generally be required to pay the Manager a termination fee.

The termination fee is equal to the amount of the management fee during the 12 months immediately preceding the date of the termination.

In addition, an Incentive Allocation Fair Value Amount will be distributable to the Master GP if the Master GP is removed due to the termination of the Management Agreement in certain specified circumstances.

The Incentive Allocation Fair Value Amount is an amount equal to the Income Incentive Allocation and the Capital Gains Incentive Allocation that would be paid to the Master GP if the Parent's assets were sold for cash at their then current fair market value (as determined by an appraisal, taking into account, among other things, the expected future value of the underlying investments).

Upon the successful completion of an offering of the Parent’s common shares or other equity securities (including securities issued as consideration in an acquisition), the Parent grants the Manager options to purchase common shares in an amount equal to 10 % of the number of common shares being sold in the offering (or if the issuance relates to equity securities other than our common shares, options to purchase a number of common shares equal to 10 % of the gross capital raised in the equity issuance divided by the fair market value of a common share as of the date of issuance), with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser or attributed to such securities in connection with an acquisition (or the fair market value of a common share as of the date of the equity issuance if it relates to equity securities other than our common shares).

If we terminate the Management Agreement, we will generally be required to pay the Manager a termination fee.

The termination fee is equal to the amount of the management fee during the 12 months immediately preceding such termination and an amount equal to the Income Incentive Fee and the Capital Gains Incentive Fee that would be paid to the Manager if the Company’s assets were sold for cash at their then current fair market value (as determined by an appraisal, taking into account, among other things, the expected future value of the underlying investments).

Upon the successful completion of an offering of our common shares or other equity securities (including securities issued as consideration in an acquisition), we grant the Manager options to purchase common shares in an amount equal to 10 % of the number of common shares being sold in the offering (or if the issuance relates to equity securities other than our common shares, options to purchase a number of common shares equal to 10 % of the gross capital raised in the equity issuance divided by the fair market value of a common share as of the date of issuance), with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser or attributed to such securities in connection with an acquisition (or the fair market value of a common share as of the date of the equity issuance if it relates to equity securities other than our common shares).

Any ultimate purchaser of common shares for which such options are granted may be an affiliate of Fortress.

The following table summarizes amounts due to the Manager, which are included within Accounts payable and accrued liabilities in the Combined Consolidated Balance Sheets:

June 30, 2022 December 31, 2021

In connection with the spin-off, we issued 10.9 million options to purchase common shares to the Manager, with a term of 10 years and strike price of $ 2.76 as compensation to the Manager for services rendered in connection with the Redeemable Preferred Stock raise, as discussed in Note 18.

The following table summarizes amounts due to the Manager, which are included within Accounts payable and accrued liabilities in the Consolidated and Combined Consolidated Balance Sheets:

September 30, 2022 December 31, 2021

Accrued management fees $ 1,751 $ 1,495

Other payables 630 1,075

As of June 30, 2022 and December 31, 2021, there were no receivables from the Manager.

As of September 30, 2022 and December 31, 2021, there were no receivables from the Manager.

Other Affiliate Transactions

As of June 30, 2022 and December 31, 2021, affiliates of our Manager and their related parties collectively own an approximately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the Combined Consolidated Financial Statements.

The carrying amount of this non-controlling interest at June 30, 2022 and December 31, 2021 was $( 24.3 ) million and $( 9.1 ) million, respectively.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

As of September 30, 2022 and December 31, 2021, affiliates of our Manager and their related parties collectively own an approximately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the Consolidated and Combined Consolidated Financial Statements.

The carrying amount of this non-controlling interest at September 30, 2022 and December 31, 2021 was $( 32.3 ) million and $( 9.1 ) million, respectively.

The following table presents the amount of this non-controlling interest share of net loss:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

In May 2022, we purchased an additional 51 % interest in FYX from an unrelated third party for a purchase price of $ 4.6 million, which resulted in our ownership of a majority stake in the entity.

Additionally, other investors in FYX are also affiliates of our Manager.

SEGMENT INFORMATION

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

We have three reportable segments which operate in infrastructure businesses across several market sectors, all in North America.

Our reportable segments are (i) Jefferson Terminal, (ii) Ports and Terminals and (iii) Transtar.

During the third quarter of 2022, we reorganized our historical operating segments into five operating segments as described below.

Additionally, during the third quarter of 2022, we modified our definition of Adjusted EBITDA to exclude the impact of interest costs on pension and other post-employment benefit (“OPEB”) liabilities and dividends and accretion expense of redeemable preferred stock.

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

We have five reportable segments which operate in infrastructure businesses across several market sectors, all in North America.

Our reportable segments are (i) Railroad, (ii) Jefferson Terminal, (iii) Repauno, (iv) Power and Gas and (v) Sustainability and Energy Transition.

The Railroad segment is comprised of five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities, in addition to KRS, a railcar cleaning operation.

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

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

The Transtar segment is comprised of five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities.

Corporate and Other primarily consists of corporate general and administrative expenses and management fees, all allocated from the Parent.

Additionally, Corporate and Other includes (i) Containers, (ii) investments in Aleon, GMR, and CPE, (iii) a note receivable from CarbonFree (iv) KRS, and (v) an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.

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

The Sustainability and Energy Transition segment is comprised of Aleon/Gladieux, Clean Planet, and CarbonFree, and all three investments are development stage businesses focused on sustainability and recycling.

Corporate and Other primarily consists of unallocated corporate general and administrative expenses, management fees, debt and redeemable preferred stock.

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

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The chief operating decision maker evaluates investment performance for each reportable segment primarily based on Adjusted EBITDA.

Adjusted EBITDA is defined as net income (loss) attributable to Parent from continuing operations, 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, and interest expense, (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 Parent, as defined by U.S.

The chief operating decision maker (“CODM”) evaluates investment performance for each reportable segment primarily based on Adjusted EBITDA.

Adjusted EBITDA is defined as net income (loss) attributable to stockholders and 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 costs on pension and OPEB liabilities, and dividends and accretion expense related to redeemable preferred stock, (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 and Former Parent, as defined by U.S.

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

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

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following tables set forth certain information for each reportable segment:

For the Three Months Ended June 30, 2022

Three Months Ended June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

For the Three Months Ended September 30, 2022

Three Months Ended September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Total revenues $ 39,186 $ 17,177 $ 1,879 $ — $ — $ 20,317 $ 78,559

5 unchanged sentences

Total expenses 27,564 23,942 6,576 656 — 28,953 87,691

Other income (expense)

Equity in losses of unconsolidated entities — ( 12,971 ) — ( 888 ) ( 13,859 )

Other (expense) income

Equity in (losses) earnings of unconsolidated entities — — — ( 9,222 ) ( 2,891 ) 33 ( 12,080 )

Loss on sale of assets, net ( 134 ) — — — — — ( 134 )

Interest expense ( 64 ) ( 5,983 ) ( 432 ) — — ( 12,682 ) ( 19,161 )

1 unchanged sentence

Total other (expense) income ( 509 ) ( 7,384 ) ( 432 ) ( 9,247 ) ( 2,418 ) ( 12,517 ) ( 32,507 )

(Loss) income before income taxes ( 16,890 ) ( 18,331 ) 13,698 ( 14,490 ) ( 36,013 )

Provision for income taxes 68 — 1,818 61 1,947

Net (loss) income ( 16,958 ) ( 18,331 ) 11,880 ( 14,551 ) ( 37,960 )

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 8,135 ) ( 320 ) — ( 25 ) ( 8,480 )

Net (loss) income attributable to Parent $ ( 8,823 ) $ ( 18,011 ) $ 11,880 $ ( 14,526 ) $ ( 29,480 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Income (loss) before income taxes 11,113 ( 14,149 ) ( 5,129 ) ( 9,903 ) ( 2,418 ) ( 21,153 ) ( 41,639 )

(Provision for) benefit from income taxes ( 942 ) 2,114 — — ( 61 ) 444 1,555

Net income (loss) 12,055 ( 16,263 ) ( 5,129 ) ( 9,903 ) ( 2,357 ) ( 21,597 ) ( 43,194 )

Net income (loss) attributable to non-controlling interests in consolidated subsidiaries 6 ( 8,002 ) ( 212 ) — — ( 173 ) ( 8,381 )

Dividends and accretion on redeemable preferred stock — — — — — 9,263 9,263

Net income (loss) attributable to stockholders and Former Parent $ 12,049 $ ( 8,261 ) $ ( 4,917 ) $ ( 9,903 ) $ ( 2,357 ) $ ( 30,687 ) $ ( 44,076 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

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

Three Months Ended September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Adjusted EBITDA $ 18,419 $ 6,023 $ ( 2,471 ) $ 11,253 $ ( 1,340 ) $ ( 5,780 ) $ 26,104

1 unchanged sentence

Equity in losses of unconsolidated entities ( 12,080 )

Interest costs on pension and OPEB liabilities ( 896 )

Dividends and accretion expense on redeemable preferred stock ( 9,263 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 9,770 )

8 unchanged sentences

Provision for income taxes ( 1,555 )

Net loss attributable to Parent $ ( 29,480 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Net loss attributable to stockholders and Former Parent $ ( 44,076 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2022

Six Months Ended June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

For the Nine Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Total revenues $ 113,887 $ 44,751 $ 1,533 $ — $ — $ 30,404 $ 190,575

5 unchanged sentences

Total expenses 79,640 70,765 19,319 824 39 63,978 234,565

Other income (expense)

Other expense

Equity in losses of unconsolidated entities — — — ( 43,574 ) ( 4,529 ) 121 ( 47,982 )

Loss on sale of assets, net ( 134 ) — — — — — ( 134 )

Interest expense ( 143 ) ( 18,220 ) ( 1,060 ) — — ( 12,683 ) ( 32,106 )

1 unchanged sentence

Total other expense ( 1,253 ) ( 21,011 ) ( 1,060 ) ( 43,599 ) ( 2,976 ) ( 12,467 ) ( 82,366 )

(Loss) income before income taxes ( 32,876 ) ( 48,237 ) 23,320 ( 26,924 ) ( 84,717 )

Income (loss) before income taxes 32,994 ( 47,025 ) ( 18,846 ) ( 44,423 ) ( 3,015 ) ( 46,041 ) ( 126,356 )

Provision for income taxes 2,391 2,251 — — — 444 5,086

Net (loss) income ( 33,013 ) ( 48,237 ) 19,987 ( 26,985 ) ( 88,248 )

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 15,271 ) ( 650 ) — ( 25 ) ( 15,946 )

Net (loss) income attributable to Parent $ ( 17,742 ) $ ( 47,587 ) $ 19,987 $ ( 26,960 ) $ ( 72,302 )

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

Six Months Ended June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Net income (loss) 30,603 ( 49,276 ) ( 18,846 ) ( 44,423 ) ( 3,015 ) ( 46,485 ) ( 131,442 )

Net income (loss) attributable to non-controlling interests in consolidated subsidiaries 6 ( 23,273 ) ( 862 ) — ( 198 ) ( 24,327 )

Dividends and accretion on redeemable preferred stock — — — — — 9,263 9,263

Net income (loss) attributable to stockholders and Former Parent $ 30,597 $ ( 26,003 ) $ ( 17,984 ) $ ( 44,423 ) $ ( 3,015 ) $ ( 55,550 ) $ ( 116,378 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Nine Months Ended September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Adjusted EBITDA $ 50,793 $ 13,987 $ ( 10,826 ) $ 24,652 $ ( 1,643 ) $ ( 17,743 ) $ 59,220

1 unchanged sentence

Equity in losses of unconsolidated entities ( 47,982 )

Interest costs on pension and OPEB liabilities ( 896 )

Dividends and accretion expense on redeemable preferred stock ( 9,263 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 22,002 )

8 unchanged sentences

Benefit from income taxes ( 5,086 )

Net loss attributable to Parent $ ( 72,302 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Net loss attributable to stockholders and Former Parent $ ( 116,378 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2021

Three Months Ended June 30, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

For the Three Months Ended September 30, 2021

Three Months Ended September 30, 2021

Port and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Total revenues $ 25,344 $ 11,902 $ ( 458 ) $ — $ — $ — $ 36,788

5 unchanged sentences

Total expenses 20,651 21,846 7,554 19 — 10,828 60,898

Other (expense) income

Equity in (losses) earnings of unconsolidated entities — — — ( 1,620 ) — 75 ( 1,545 )

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

Interest expense ( 20 ) ( 4,080 ) ( 284 ) — — ( 4,384 )

Other (expense) income ( 886 ) 91 — 3 ( 792 )

Other expense ( 197 ) ( 2,091 ) — ( 3,955 ) — ( 1 ) ( 6,244 )

Total other (expense) income ( 217 ) ( 6,171 ) ( 284 ) ( 5,575 ) — 74 ( 12,173 )

Loss before income taxes ( 13,664 ) ( 13,072 ) — ( 6,039 ) ( 32,775 )

Income (loss) before income taxes 4,476 ( 16,115 ) ( 8,296 ) ( 5,594 ) — ( 10,754 ) ( 36,283 )

Provision for (benefit from) income taxes 681 48 — ( 2,363 ) — — ( 1,634 )

Net loss ( 13,723 ) ( 12,298 ) — ( 6,039 ) ( 32,060 )

Net income (loss) 3,795 ( 16,163 ) ( 8,296 ) ( 3,231 ) — ( 10,754 ) ( 34,649 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 7,189 ) ( 174 ) — — — ( 7,363 )

Net loss attributable to Parent $ ( 7,185 ) $ ( 12,211 ) $ — $ ( 6,039 ) $ ( 25,435 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Net income (loss) attributable to Former Parent $ 3,795 $ ( 8,974 ) $ ( 8,122 ) $ ( 3,231 ) $ — $ ( 10,754 ) $ ( 27,286 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended June 30, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

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

Three Months Ended September 30, 2021

Port and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Adjusted EBITDA $ 10,773 $ 1,945 $ ( 1,022 ) $ 3,787 $ — $ ( 6,317 ) $ 9,166

1 unchanged sentence

Equity in income of unconsolidated entities ( 1,545 )

Interest costs on pension and OPEB liabilities —

Dividends and accretion expense on redeemable preferred stock —

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 7,782 )

8 unchanged sentences

Provision for income taxes 1,634

Net loss attributable to Parent $ ( 25,435 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Net loss attributable to Former Parent $ ( 27,286 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2021

Six Months Ended June 30, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

For the Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Total revenues $ 28,544 $ 34,148 $ 9,982 $ — $ — $ — $ 72,674

5 unchanged sentences

Total expenses 24,652 62,377 18,867 61 — 25,426 131,383

Other income (expense)

Other (expense) income

Equity in (losses) earnings of unconsolidated entities — — — ( 9,262 ) — 452 ( 8,810 )

1 unchanged sentence

Interest expense ( 42 ) ( 8,496 ) ( 858 ) — — — ( 9,396 )

Other (expense) income ( 705 ) 91 — 3 ( 611 )

Other expense ( 195 ) ( 2,795 ) — ( 3,864 ) — ( 1 ) ( 6,855 )

Total other (expense) income ( 237 ) ( 11,291 ) ( 842 ) ( 13,126 ) — 451 ( 25,045 )

Loss before income taxes ( 23,406 ) ( 9,026 ) — ( 15,038 ) ( 47,470 )

Income (loss) before income taxes 3,655 ( 39,520 ) ( 9,727 ) ( 13,187 ) — ( 24,975 ) ( 83,754 )

Provision for (benefit from) income taxes 681 163 — ( 3,599 ) — — ( 2,755 )

Net loss ( 23,521 ) ( 7,790 ) — ( 15,038 ) ( 46,349 )

Net income (loss) 2,974 ( 39,683 ) ( 9,727 ) ( 9,588 ) — ( 24,975 ) ( 80,999 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 18,742 ) ( 207 ) — — — ( 18,949 )

Net loss attributable to Parent $ ( 11,967 ) $ ( 7,758 ) $ — $ ( 15,038 ) $ ( 34,763 )

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Net income (loss) attributable to Former Parent $ 2,974 $ ( 20,941 ) $ ( 9,520 ) $ ( 9,588 ) $ — $ ( 24,975 ) $ ( 62,050 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Six Months Ended June 30, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

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

Nine Months Ended September 30, 2021

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Adjusted EBITDA $ 10,284 $ 8,328 $ ( 3,512 ) $ 6,787 $ — $ ( 17,363 ) $ 4,524

1 unchanged sentence

Equity in losses of unconsolidated entities ( 8,810 )

Interest costs on pension and OPEB liabilities —

Dividends and accretion expense on redeemable preferred stock —

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 10,767 )

8 unchanged sentences

Benefit from income taxes 2,755

Net loss attributable to Parent $ ( 34,763 )

Net loss attributable to Former Parent $ ( 62,050 )

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Balance Sheet

1 unchanged sentence

All property, plant and equipment and leasing equipment are located in North America.

June 30, 2022

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

September 30, 2022

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Current assets $ 94,213 $ 182,054 $ 35,156 $ 13 $ 20,302 $ 20,798 $ 352,536

5 unchanged sentences

Total liabilities 115,602 826,888 43,770 236,944 — 494,458 1,717,662

Redeemable preferred stock — — — — — 251,955 251,955

Non-controlling interests in equity of consolidated subsidiaries 1,086 ( 24,371 ) 1,336 — — 4,211 ( 17,738 )

Total equity 658,398 459,064 278,246 ( 229,530 ) 94,830 ( 705,157 ) 555,851

Total liabilities and equity $ 1,304,515 $ 331,843 $ 748,210 $ 175,660 $ 2,560,228

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Total liabilities, redeemable preferred stock and equity $ 774,000 $ 1,285,952 $ 322,016 $ 7,414 $ 94,830 $ 41,256 $ 2,525,468

December 31, 2021

Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Ports and Terminals

Railroad Jefferson Terminal Repauno Power and Gas Sustainability and Energy Transition Corporate and Other Total

Current assets $ 72,965 $ 296,753 $ 34,944 $ 357 $ 7,680 $ 285 $ 412,984

8 unchanged sentences

Total liabilities and equity $ 768,596 $ 1,284,431 $ 316,543 $ 357 $ 60,833 $ 11,541 $ 2,442,301

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

REDEEMABLE PREFERRED STOCK

On August 1, 2022, the Company issued and sold 300,000 shares of Redeemable Preferred Stock at a price of $ 1,000 per share and $ 0.01 par value.

The shares were issued at a 3 % discount for net proceeds of $ 291.0 million.

The Company also issued two classes of warrants to the preferred stockholders (see Note 19).

The fair value of the Redeemable Preferred Stock and the warrants at issuance were determined to be $ 242.7 million and $ 13.8 million, respectively .

The Company incurred $ 16.4 million of issuance costs related to the Redeemable Preferred Stock and warrants.

Additionally, the Company issued options to the Manager with a total fair value of $ 18.1 million (see Note 16).

The Redeemable Preferred Stock has the following rights, preferences and restrictions:

Each holder of the Redeemable Preferred Stock will have one vote per share on any matter on which holders of the Redeemable Preferred Stock are entitled to vote separately as a class, whether at a meeting or by written consent.

The holders of shares of the Redeemable Preferred Stock do not otherwise have any voting rights.

Liquidation Preference

The Redeemable Preferred Stock ranks senior to the common stock with respect to dividend rights and rights upon the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

Upon a liquidation, dissolution or winding up of the affairs of the Company, each share of Redeemable Preferred Stock will be entitled to receive an amount per share equal to the greater of (i) the purchase price paid by the purchaser, plus all accrued and unpaid dividends (the “Liquidation Preference”) and (ii) the purchase price, plus $ 150.0 million of cash Dividends (the ”Base Preferred Return Amount”).

Dividends on the Redeemable Preferred Stock are payable at a rate equal to 14.0 % per annum subject to increase in accordance with the terms of the Redeemable Preferred Stock.

Specifically, the rate will be increased by 2.0 % per annum for any periods during the first two years following closing of the issuance of the Redeemable Preferred Stock, where the dividend is not paid in cash.

Prior to the second anniversary of the issuance date, such dividends will automatically accrue and accumulate on each share of Redeemable Preferred Stock, whether or not declared and paid, or they may be paid in cash at our discretion.

After the second anniversary of the issuance date, we are required to pay such dividends in cash.

Failure to pay such dividends will result in a dividend rate equal to 18.0 % per annum, and a failure to pay cash dividends for 12 monthly dividend periods (whether or not consecutive) following the second anniversary of the issuance date will constitute an event of noncompliance.

The dividend rate on the Preferred Stock will increase by 1.0 % per annum beginning on the fifth anniversary of the issuance date of the Redeemable Preferred Stock.

As of September 30, 2022, the Company has $ 8.2 million of dividends paid-in-kind increasing our Redeemable Preferred Stock balance.

The Company has presented the Redeemable Preferred Stock in temporary equity and is accreting the discount and debt issuance costs using the interest method to the earliest redemption date of August 1, 2030.

Such accretion, recorded in dividends and accretion on redeemable preferred stock on the Consolidated Statement of Operations, totaled $ 1.1 million for the three and nine months ended September 30, 2022.

Mandatory Redemption :

The Redeemable Preferred Stock is not mandatorily redeemable at the option of the holders, except upon the occurrence of any (i) bankruptcy event, (ii) any change of control event, or (iii) any debt acceleration event (together with any bankruptcy event and change of control event) (each a “Mandatory Redemption Event”).

Upon the occurrence of a Mandatory Redemption Event, to the extent not prohibited by law, we will be required to redeem all preferred stock in cash at the greater of the (i) Liquidation Preference, and (ii) the Base Preferred Return Amount at the date of redemption.

Optional Redemption:

The Redeemable Preferred Stock is optionally redeemable at the option of the Company, at any time, at the greater of the (i) Liquidation Preference, and (ii) the Base Preferred Return Amount at the date of redemption.

Upon certain contingent events or events of noncompliance, the preferred stockholders have the right to a majority of the board seats of the Company.

If the Redeemable Preferred Stock were redeemed as of September 30, 2022, it would be redeemable for $ 450.0 million.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

EARNINGS PER SHARE AND EQUITY

On August 1, 2022, FTAI distributed one share of FTAI Infrastructure common stock for each FTAI common share held by FTAI shareholders of record as of the record date.

Basic earnings (loss) per common share (“EPS”) is calculated by dividing net income (loss) attributable to stockholders by the weighted average number of common shares outstanding, plus any participating securities.

Diluted EPS is calculated by dividing net income attributable to stockholders by the weighted average number of common shares outstanding, plus any participating securities and potentially dilutive securities.

Potentially dilutive securities are calculated using the treasury stock method.

The calculation of basic and diluted EPS is presented below:

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except per share data) 2022 2021 2022 2021

Net loss $ ( 43,194 ) $ ( 34,649 ) $ ( 131,442 ) $ ( 80,999 )

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 8,381 ) ( 7,363 ) ( 24,327 ) ( 18,949 )

Dividends and accretion on redeemable preferred stock 9,263 — 9,263 —

Net loss attributable to stockholders $ ( 44,076 ) $ ( 27,286 ) $ ( 116,378 ) $ ( 62,050 )

Weighted Average Common Shares Outstanding - Basic (1)

102,730,033 99,387,467 102,730,033 99,387,467

Weighted Average Common Shares Outstanding - Diluted (1)

102,730,033 99,387,467 102,730,033 99,387,467

Loss per share:

Basic $ ( 0.43 ) $ ( 0.27 ) $ ( 1.13 ) $ ( 0.62 )

Diluted $ ( 0.43 ) $ ( 0.27 ) $ ( 1.13 ) $ ( 0.62 )

________________________________________________________

(1) Three and nine months ended September 30, 2022 include penny warrants which can be converted into a fixed amount of our shares.

For the three and nine months ended September 30, 2022, 904,796 and 904,796 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

On the Separation Date, FTAI distributed one share of FTAI Infrastructure, Inc.

common stock for each FTAI common share held by FTAI’s shareholders of record as of the record date.

As of that date, 99,387,467 shares were distributed.

This number of shares is utilized for the calculation of basic and diluted loss per share for all periods presented prior to the spin-off.

For the three and six months ended June 30, 2022 and 2021, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

For periods prior to the spin-off, it is assumed that there are no dilutive equity instruments as there were no equity awards of FTAI Infrastructure outstanding prior to the spin-off.

For the three and nine months ended September 30, 2021, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

For periods prior to the spin-off, it is assumed that there are no dilutive equity instruments as there were no equity awards of FTAI Infrastructure, Inc.

outstanding prior to the spin-off.

In addition, as of the Separation Date, each FTAI option held by the Manager or by the directors, officers, employees, service providers, consultants and advisors of the Manager was converted into an adjusted FTAI option and a new FTAI Infrastructure option.

The exercise price of each adjusted FTAI Infrastructure option was set to collectively maintain the intrinsic value of the FTAI option immediately prior to the spin-off and to maintain the ratio of the exercise price of the adjusted FTAI option and the FTAI Infrastructure option, respectively, to the fair market value of the underlying shares.

The terms and conditions applicable to each FTAI Infrastructure option are substantially similar to the terms and conditions otherwise applicable to the FTAI option.

Common Stock Warrants

On August 1, 2022, in connection with the Redeemable Preferred Stock raise, the Company issued two classes of warrants to the redeemable preferred stockholders.

The Series I Warrants represent the right to purchase 3,342,566 shares of common stock, at an exercise price of $ 10.00 per share, and the Series II Warrants represent the right to purchase 3,342,566 shares of common stock at an exercise price of $ 0.01 per share.

Both classes of warrants expire on the earlier of August 1, 2030 or a change in control.

The Series II Warrants will participate on an as-converted basis in any dividends with respect to the common stock.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

A summary of the status of the Company’s outstanding stock warrants and changes during the nine months ended September 30, 2022 is as follows:

Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years)

Outstanding as of December 31, 2021

Issued 6,685,132 5.01 7.8

Expired — — —

Exercised — — —

Outstanding as of September 30, 2022

6,685,132 $ 5.01 7.8

Warrants exercisable as of September 30, 2022

6,685,132 $ 5.01 7.8

COMMITMENTS AND CONTINGENCIES

In the normal course of business we, and our subsidiaries, may be involved in various claims, legal proceedings, or may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications.

We have entered into an arrangement with our non-controlling interest holder of Repauno, as part of the initial acquisition, whereby the non-controlling interest holder may receive additional payments contingent upon the achievement of c ertain conditions, not to exceed $ 15.0 million.

We will account for such amounts when and if such conditions are achieved.

The contingency related to $ 5.0 million of the total $ 15.0 million was resolved during the year ended December 31, 2021.

The $ 5.0 million payment was included in the cost of the asset acquisition.

Jefferson entered into a two-year pipeline capacity agreement for a recently completed pipeline.

Under the agreement, which took effect in the second quarter of 2021, Jefferson is obligated to pay fixed marketing fees over the two-year agreement, which totals a minimum of $ 9.2 million for the next twelve months.

contingency related to $ 5.0 million of the total $ 15.0 million was resolved during the year ended December 31, 2021, and the

contingency related to an additional $ 5.0 million of the total $ 15.0 million was resolved during the quarter ended September 30, 2022.

Jefferson Terminal entered into a two-year pipeline capacity agreement for a recently completed pipeline.

Under the agreement, which took effect in the second quarter of 2021, Jefferson Terminal is obligated to pay fixed marketing fees over the two-year agreement, which totals a minimum of $ 6.4 million for the next twelve months.

SUBSEQUENT EVENTS

Subscription Agreements

On June 30, 2022, our Holding Company and Transtar, LLC, a subsidiary of our Holding Company, entered into subscription agreements with entities affiliated with Ares Management LLC (collectively, the “Subscriber”).

Pursuant to the subscription agreement, the Holding Company agreed to sell to the Subscriber (i) 300,000 shares of newly-created Series A Senior Preferred Stock with a par value of $ 0.01 per share, (ii) warrants representing the right to purchase 3,342,566 shares of common stock of the Holding Company, with a par value of $ 0.01 per share, at an exercise price of $ 10.00 per share (as adjusted in accordance with the agreement governing the warrants), and (iii) warrants representing the right to purchase 3,342,566 shares of common stock at an exercise price of $ 0.01 per share, for an aggregate purchase price of $ 300.0 million, net of a discount of $ 9.0 million.

Net proceeds were distributed to the Parent.

These agreements were not effective until the spin-off, described below, was complete.

Senior Secured Notes Offering

On July 7, 2022, the Holding Company closed its private offering of $ 450.0 million aggregate principal amount of 10.500 % senior secured notes due 2027, at an issue price equal to 94.585 % of principal.

FTAI INFRASTRUCTURE

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

On July 25, 2022, the Holding Company closed its private offering of an additional $ 50.0 million aggregate principal amount of 10.500 % senior secured notes due 2027, at an issue price equal to 94.585 % of principal.

The additional notes and the existing $ 450.0 million notes will be treated as a single class for all purposes under that certain indenture dated as of July 7, 2022, as supplemented.

Net proceeds were distributed to the Parent.

These notes were not effective until the spin-off, described below, was complete.

Conversion of Limited Liability Company to Corporation

On July 29, 2022, FTAI Infrastructure LLC was converted to a corporation, FTAI Infrastructure Inc., pursuant to the laws of the State of Delaware.

Adoption of Management Agreement

On July 31, 2022, the Holding Company entered into a management agreement with the Manager, an affiliate of Fortress (the “Management Agreement”), with substantially the same terms as the previously held management agreement between the Parent and the Manager.

FTAI Infrastructure Spin-off

Following the distribution, FTAI Infrastructure Inc.

became an independent, publicly-traded company with its common stock listed under the symbol “FIP" on The Nasdaq Global Select Market.

Manager Options

In connection with the spin-off, the Holding Company issued 10.9 million options to the Manager pursuant to the Management Agreement as compensation to the Manager for the successful completion of an offering.

Nonqualified Stock Option and Incentive Award Plan

As of August 1, 2022, the Plan provides for the issuance of up to 30 million shares of the FTAI Infrastructure Inc.’s common stock.

On October 31, 2022, our Board of Directors declared a cash dividend on our common shares of $ 0.03 per share for the quarter ended September 30, 2022, payable on November 28, 2022 to the holders of record on November 14, 2022.

Director Options

On October 31, 2022, the Company issued an aggregate of 15,000 stock options ( 5,000 options each) to its three independent directors pursuant to the Incentive Plan with a term of 10 years and strike price of $ 2.75 .

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 1. Financial Statements