What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-05-03 · 321 added, 139 removed, 950 unchanged (33% of the section changed)

3 unchanged sentences

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

Notes March 31, 2023 December 31, 2022

Notes June 30, 2023 December 31, 2022

Current assets:

14 unchanged sentences

Accounts payable and accrued liabilities 2 $ 122,491 $ 136,048

Current debt, net 7 24,037 —

Operating lease liabilities 7,070 7,045

8 unchanged sentences

200,000,000 shares authorized;

300,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022;

redemption amount of $ 448.2 million at March 31, 2023 and December 31, 2022)

300,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022;

redemption amount of $ 448.2 million at June 30, 2023 and December 31, 2022)

15 294,417 264,590

1 unchanged sentence

2,000,000,000 shares authorized;

99,445,074 shares issued and outstanding as of March 31, 2023 and December 31, 2022)

99,470,553 and 99,445,074 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)

Additional paid in capital 874,729 911,599

9 unchanged sentences

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

Three Months Ended March 31,

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

Notes 2023 2022 2023 2022

8 unchanged sentences

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 5 4,366 ( 22,043 )

Loss on sale of assets, net ( 124 ) —

Equity in (losses) earnings of unconsolidated entities 5 ( 1,625 ) ( 13,859 ) 2,741 ( 35,902 )

Gain on sale of assets, net 647 — 523 —

Interest expense ( 24,182 ) ( 6,486 ) ( 47,432 ) ( 12,945 )

17 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net loss $ ( 33,872 ) $ ( 37,960 ) $ ( 69,784 ) $ ( 88,248 )

9 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2023

Three and Six Months Ended June 30, 2023

Common Stock Additional Paid In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

9 unchanged sentences

Equity - March 31, 2023 $ 994 $ 892,992 $ ( 86,856 ) $ ( 247,293 ) $ ( 39,412 ) $ 520,425

Three Months Ended March 31, 2022

Net loss ( 23,596 ) ( 10,276 ) ( 33,872 )

Other comprehensive income 62,566 62,566

Total comprehensive (loss) income — — ( 23,596 ) 62,566 ( 10,276 ) 28,694

Distributions to non-controlling interest ( 20 ) ( 20 )

Dividends declared on common stock ( 3,086 ) ( 3,086 )

Dividends and accretion on redeemable preferred stock ( 15,257 ) ( 15,257 )

Equity-based compensation — 80 562 642

Equity - June 30, 2023 $ 994 $ 874,729 $ ( 110,452 ) $ ( 184,727 ) $ ( 49,146 ) $ 531,398

Three and Six Months Ended June 30, 2022

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

6 unchanged sentences

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

Net loss ( 29,480 ) ( 8,480 ) ( 37,960 )

Other comprehensive loss ( 47,714 ) ( 47,714 )

Total comprehensive loss ( 29,480 ) ( 47,714 ) ( 8,480 ) ( 85,674 )

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 562 562

Net transfers from Former Parent 77,126 77,126

Equity-based compensation 956 956

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

See accompanying notes to consolidated and combined consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

2 unchanged sentences

Equity in (earnings) losses of unconsolidated entities ( 2,741 ) 35,902

Loss on sale of assets, net 124 —

Gain on sale of assets, net ( 523 ) —

Equity-based compensation 1,537 1,665

14 unchanged sentences

Investment in unconsolidated entities ( 3,315 ) ( 2,745 )

Acquisition of consolidated subsidiary ( 4,448 ) —

Investment in convertible promissory notes — ( 5,000 )

Acquisition of business, net of cash acquired ( 4,448 ) ( 3,819 )

Acquisition of property, plant and equipment ( 65,696 ) ( 113,916 )

Investment in promissory notes and loans ( 22,000 ) —

Proceeds from sale of leasing equipment 115 —

Proceeds from sale of property, plant and equipment 988 4,304

4 unchanged sentences

Cash dividends - common stock ( 6,170 ) —

Capital contribution from non-controlling interests — 562

Net transfers from Former Parent, net — 111,396

Settlement of equity-based compensation ( 90 ) —

Distributions to non-controlling interests ( 20 ) —

Net cash provided by financing activities 59,128 121,131

5 unchanged sentences

Dividends and accretion on redeemable preferred stock ( 29,827 ) —

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

Non-cash change in equity method investment 115,430 ( 144,661 )

45 unchanged sentences

Subsequent to the Spin-off 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 March 31, 2023, and the Consolidated and Combined Consolidated Statements of Operations, Comprehensive Income (Loss), Changes in Equity and Cash Flows for the three months ended March 31, 2023 and 2022 are unaudited.

Unaudited Interim Financial Information — The accompanying interim Consolidated Balance Sheet as of June 30, 2023, the Consolidated and Combined Consolidated Statements of Operations, Comprehensive Income (Loss) and Changes in Equity for the three and six months ended June 30, 2023 and 2022, and the Consolidated and Combined Statements of Cash Flows for the six months ended June 30, 2023 and 2022 are unaudited.

These unaudited interim consolidated and combined consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“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 March 31, 2023, the results of operations, comprehensive income (loss), changes in equity and cash flows for the three months ended March 31, 2023 and 2022.

The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any other period.

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 June 30, 2023, the results of operations, comprehensive income (loss) and changes in equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 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.

25 unchanged sentences

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 $ 302.6 million and $ 306.0 million, and total VIE liabilities of DRP were $ 34.9 million and $ 34.1 million as of March 31, 2023 and December 31, 2022, respectively.

Total VIE assets of DRP were $ 300.1 million and $ 306.0 million, and total VIE liabilities of DRP were $ 35.9 million and $ 34.1 million as of June 30, 2023 and December 31, 2022, 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.

27 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 $ 1.4 million and $ 2.1 million during the three months ended March 31, 2023 and 2022, respectively.

We capitalized interest of $ 1.4 million and $ 2.2 million during the three months ended June 30, 2023 and 2022, respectively, and $ 2.8 million and $ 4.3 million during the six months ended June 30, 2023 and 2022, 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 expenses were $ 4.3 million and $ 1.3 million during the three months ended March 31, 2023 and 2022, respectively, and are included in Operating expenses in the Consolidated and Combined Consolidated Statements of Operations.

Our repairs and maintenance expenses were $ 4.9 million and $ 4.0 million during the three months ended June 30, 2023 and 2022, respectively, and $ 9.2 million and $ 5.4 million during the six months ended June 30, 2023 and 2022, 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.

10 unchanged sentences

The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in contracted lease rates, terminal service, and freight rail rates, residual values, economic conditions, technology, demand for a particular asset type and other factors.

Other Current Assets —Other current assets is primarily comprised of commodities inventory of $ 0.9 million and $ 3.6 million, deposits of $ 21.6 million and $ 22.8 million, note receivable of $ 20.0 million and $ 20.0 million, prepaid expenses of $ 10.9 million and $ 16.4 million, and other assets of $ 5.5 million and $ 4.5 million as of March 31, 2023 and December 31, 2022, respectively.

Other Assets —Other Assets primarily consists of a note receivable of $ 10.8 million as of both March 31, 2023 and December 31, 2022 from CarbonFree, a business that develops technologies to capture carbon dioxide from industrial emissions sources.

Other Current Assets — Other current assets is primarily comprised of commodities inventory of $ 0.3 million and $ 3.6 million, deposits of $ 19.7 million and $ 22.8 million, note receivable of $ 21.4 million and $ 20.0 million, prepaid expenses of $ 13.7 million and $ 16.4 million, and other assets of $ 5.5 million and $ 4.5 million as of June 30, 2023 and December 31, 2022, respectively.

Other Assets — Other assets primarily consists of a note receivable of $ 10.8 million as of both June 30, 2023 and December 31, 2022 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, interest and payables to Manager.

Other Current Liabilities —Other current liabilities primarily include environmental liabilities of $ 4.1 million and $ 4.1 million, and insurance premium liabilities of $ 4.1 million and $ 6.2 million as of March 31, 2023 and December 31, 2022, respectively.

Other Current Liabilities — Other current liabilities primarily include environmental liabilities of $ 4.1 million and $ 4.1 million, insurance premium liabilities of $ 9.0 million and $ 6.2 million, and deposits of $ 7.5 million and $ — million as of June 30, 2023 and December 31, 2022, respectively.

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 within the Jefferson Terminal, Railroad and Corporate and Other segments was $ 122.7 million, $ 132.1 million, and $ 5.4 million as of both March 31, 2023 and December 31, 2022, respectively.

The carrying amount of goodwill within the Jefferson Terminal, Railroad and Corporate and Other segments was $ 122.7 million, $ 132.1 million, and $ 5.4 million as of both June 30, 2023 and December 31, 2022, respectively.

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

16 unchanged sentences

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

At October 1, 2022, approximately 4.3 million barrels of storage was operational with 1.9 million barrels under construction for new contracts that came online in December 2022 and completed our storage development for our main terminal.

At October 1, 2022, approximately 4.3 million barrels of storage was operational with 1.9 million barrels under construction for new contracts that came online in December 2022 which completed our storage development for our main terminal.

Our discount rate for our 2022 goodwill impairment analysis was 9.5 % and our assumed terminal growth rate was 2.0 %.

10 unchanged sentences

Further delays in executing anticipated contracts or achieving our projected volumes could adversely affect the fair value of the reporting unit.

There were no impairments of goodwill for the three months ended March 31, 2023 and 2022.

There were no impairments of goodwill for the three and six months ended June 30, 2023 and 2022.

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

1 unchanged sentence

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 Consolidated and Combined Consolidated Statements of Operations.

The weighted-average remaining amortization period for customer relationships was 147 months and 148 months as of March 31, 2023 and December 31, 2022, respectively.

The weighted-average remaining amortization period for customer relationships was 145 months and 148 months as of June 30, 2023 and December 31, 2022, respectively.

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

2 unchanged sentences

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 $ 29.5 million and $ 30.9 million as of March 31, 2023 and December 31, 2022, respectively, are included in Debt, net in the Consolidated Balance Sheets.

Amortization expense was $ 1.4 million and $ 0.8 million for the three months ended March 31, 2023 and 2022, respectively, and is included in Interest expense in the Consolidated and Combined Consolidated Statements of Operations.

Unamortized deferred financing costs of $ 29.1 million and $ 30.9 million as of June 30, 2023 and December 31, 2022, respectively, are included in Debt, net in the Consolidated Balance Sheets.

Amortization expense was $ 1.7 million and $ 0.9 million during the three months ended June 30, 2023 and 2022, respectively, and $ 3.1 million and $ 1.7 million during the six months ended June 30, 2023 and 2022, respectively, and is included in Interest expense in the Consolidated and Combined Consolidated Statements of Operations.

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

45 unchanged sentences

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

During the three months ended March 31, 2023, one customer in the Railroad segment accounted for approximately 48 % of total revenue.

Additionally, we earned approximately 12 % of our revenue for the three months ended March 31, 2023 from one customer in the Jefferson Terminal segment.

For the three months ended March 31, 2022, we earned 70 % and 12 % of our revenues from one customer in the Railroad segment and one customer in the Jefferson Terminal segment, respectively.

As of March 31, 2023 accounts receivable from three customers from the Jefferson Terminal and Railroad segments represented 50 % of total accounts receivable, net.

As of December 31, 2022, accounts receivable from three customers from the Jefferson Terminal and Railroad segments represented 55 % of total accounts receivable, net.

We earned approximately 54 % and 51 % of total revenues for the three and six months ended June 30, 2023, respectively, from one customer in the Railroad segment.

Additionally, we earned 11 % of total revenues for both the three and six months ended June 30, 2023 from one customer in the Jefferson Terminal segment.

We earned 54 % and 61 % of total revenues for the three and six months ended June 30, 2022, respectively, from one customer in the Railroad segment.

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

Additionally, for the three months ended June 30, 2022, one customer from the Repauno segment accounted for 21 % of total revenues.

As of June 30, 2023 accounts receivable from two customers within the Jefferson Terminal and Railroad segments represented 42 % of total accounts receivable, net.

As of December 31, 2022, accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 55 % of total accounts receivable, net.

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.

41 unchanged sentences

Refer to Note 11 for additional discussion on the pension and postretirement benefit plans.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Leasing equipment $ 44,039 $ 44,179

2 unchanged sentences

Depreciation expense for leasing equipment is summarized as follows:

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended March 31,

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

2023 2022 2023 2022

Depreciation expense for leasing equipment $ 276 $ 276 $ 552 $ 552

1 unchanged sentence

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Land, site improvements and rights $ 184,215 $ 183,640

Construction in progress 145,544 127,941

Buildings and improvements 19,377 19,356

6 unchanged sentences

Furniture and fixtures 1,822 1,745

Construction in progress 100,753 127,941

Other 11,712 11,336

2 unchanged sentences

Property, plant and equipment, net $ 1,687,929 $ 1,673,808

During the three months ended March 31, 2023, we added property, plant and equipment of $ 29.4 million, which primarily consisted of terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Depreciation expense $ 18,121 $ 15,158 $ 36,094 $ 30,003

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents the ownership interests and carrying values of our investments:

Carrying Value

Investment Ownership Percentage March 31, 2023 December 31, 2022

Investment Ownership Percentage June 30, 2023 December 31, 2022

Intermodal Finance I, Ltd.

6 unchanged sentences

________________________________________________________

(1) The carrying value of $ 104.8 million and $ 187.2 million as of March 31, 2023 and December 31, 2022 is included in Other liabilities in the Consolidated Balance Sheets.

We did not recognize any other-than-temporary impairments for the three months ended March 31, 2023 and 2022.

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 income (losses):

Three Months Ended March 31,

(1) The carrying value of $( 37.5 ) million and $( 187.2 ) million as of June 30, 2023 and December 31, 2022 is included in Other liabilities in the Consolidated Balance Sheets.

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2023 and 2022.

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

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

2023 2022 2023 2022

Intermodal Finance I, Ltd.

$ 13 $ 44 $ 34 $ 88

Long Ridge Energy & Power LLC 1,639 ( 12,971 ) 9,400 ( 34,352 )

10 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 March 31, 2023, Intermodal owns a portfolio of approximately 239 shipping containers subject to multiple operating leases.

As of June 30, 2023, Intermodal owns a portfolio of approximately 219 shipping containers subject to multiple operating leases.

Long Ridge Energy & Power LLC

3 unchanged sentences

In addition to our equity method investment, in October 2022 we entered into a shareholder loan agreement maturing on October 15, 2023 and accruing paid-in-kind (“PIK”) interest at a 13 % rate.

The Company made an additional $ 20.5 million of investment in Long Ridge as part of the shareholder loan agreement in Q1 2023.

As of March 31, 2023, the balance of the note receivable was $ 49.2 million recorded as part of the Long Ridge investment in Other liabilities on the Consolidated Balance Sheet.

The Company made an additional $ 22.0 million of investment in Long Ridge as part of the shareholder loan agreement during the six months ended June 30, 2023.

As of June 30, 2023, the balance of the note receivable was $ 52.3 million recorded as part of the Long Ridge investment in Other liabilities on the Consolidated Balance Sheet.

FTAI INFRASTRUCTURE INC.

2 unchanged sentences

The tables below present summarized financial information for Long Ridge Energy & Power LLC:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Balance Sheet

24 unchanged sentences

Total liabilities and equity $ 972,296 $ 987,829

Three Months Ended March 31,

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

Income Statement 2023 2022 2023 2022

11 unchanged sentences

In September 2021, we acquired 1 % of the Class A shares and 50 % of the Class B shares of GM-FTAI Holdco LLC for $ 52.5 million.

GM-FTAI Holdco LLC owns 100 % interest in Gladieux Metals Recycling (“GMR”) and Aleon Renewable Metals LLC (“Aleon”).

GM-FTAI Holdco LLC owns 100 % interest in Gladieux Metals Recycling LLC (“GMR”) and Aleon Renewable Metals LLC (“Aleon”).

GMR specializes in recycling spent catalyst produced in the petroleum refining industry.

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This resulted in 100 % ownership in FYX and the elimination of any non-controlling interest.

From the initial consolidation date in May 2022 through and as of March 31, 2023, FYX is presented on a consolidated basis in the Consolidated and Combined Consolidated Statements of Operations and the Consolidated Balance Sheets.

From the initial consolidation date in May 2022 through and as of June 30, 2023, FYX is presented on a consolidated basis in the Consolidated and Combined Consolidated Statements of Operations and the Consolidated Balance Sheets.

INTANGIBLE ASSETS, NET

Intangible assets, net are summarized as follows:

March 31, 2023

June 30, 2023

Jefferson Terminal Railroad Total

12 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Amortization of intangible assets is as follows:

Classification in Consolidated and Combined Consolidated Statements of Operations Three Months Ended March 31,

Customer relationships Depreciation and amortization $ 1,886 $ 1,875

As of March 31, 2023, estimated net annual amortization of intangibles is as follows:

Amortization of customer relationships is included in Depreciation and amortization in the Consolidated and Combined Consolidated Statements of Operations and is as follows:

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

2023 2022 2023 2022

Amortization of customer relationships $ 1,895 $ 1,885 $ 3,781 $ 3,760

As of June 30, 2023, estimated net annual amortization of intangibles is as follows:

Remainder of 2023 $ 3,776

3 unchanged sentences

Outstanding Borrowings

Stated Interest Rate Maturity Date March 31, 2023 December 31, 2022

Stated Interest Rate Maturity Date June 30, 2023 December 31, 2022

Loans payable

9 unchanged sentences

12/27/25 50,000 10,000

Credit Agreement (i) Base Rate + 6.50 %;

(ii) Adjusted Term SOFR + 7.50 %

12/31/23 25,000 —

Total loans payable 163,800 97,200

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(2) Requires a quarterly commitment fee at a rate of 0.500 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(3) Includes an unamortized discount of $ 24,127 and $ 25,172 at March 31, 2023 and December 31, 2022, respectively.

Transtar Revolver Amendment —In January 2023, our subsidiary entered into an amendment to an existing revolving credit facility (the “Transtar Revolver”) that provides for revolving loans in the aggregate amount of an additional $ 25.0 million, for a total facility of $ 50.0 million.

The terms of the amendment are substantially the same as the original agreement.

We were in compliance with all debt covenants as of March 31, 2023.

(3) Includes an unamortized discount of $ 23,027 and $ 25,172 at June 30, 2023 and December 31, 2022, respectively.

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Credit Agreement

On May 18, 2023, we entered into a credit agreement, providing for a $ 25.0 million secured loan facility (the “Credit Agreement”).

In July 2023, we issued an additional $ 100.0 million aggregate principal amount of 10.500 % Senior Notes due 2027, and used a portion of the net proceeds to repay the Credit Agreement in full.

See Note 18 for additional information.

We were in compliance with all debt covenants as of June 30, 2023.

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).

The following tables set forth our financial assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022, 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

March 31, 2023 March 31, 2023

June 30, 2023 June 30, 2023

Total Level 1 Level 2 Level 3 Valuation Technique

1 unchanged sentence

Restricted cash 54,960 54,960 — — Market

Note receivable 10,800 — 10,800 — Market

Total assets $ 108,283 $ 97,483 $ 10,800 $ —

9 unchanged sentences

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.

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Series 2020 A Bonds (1)

9 unchanged sentences

(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 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 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.

6 unchanged sentences

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

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Ports and Terminals

6 unchanged sentences

Total revenues $ 42,546 $ 17,104 $ 3,947 $ — $ — $ 18,235 $ 81,832

Three Months Ended March 31, 2022

Six Months Ended June 30, 2023

Ports and Terminals

3 unchanged sentences

Terminal services revenues — 35,571 4,445 — — — 40,016

Roadside services revenues — — — — — 36,085 36,085

Other revenue — — ( 1,951 ) — — — ( 1,951 )

3 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Presented below are the contracted minimum future annual revenues to be received under existing operating leases within the Jefferson Terminal segment as of March 31, 2023:

Three Months Ended June 30, 2022

Ports and Terminals

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

Lease income $ 553 $ 314 $ — $ — $ — $ — $ 867

Rail revenues 39,060 — — — — — 39,060

Terminal services revenues — 14,214 13 — — — 14,227

Roadside services revenues — — — — — 10,087 10,087

Other revenue — — 1,627 — — — 1,627

Total revenues $ 39,613 $ 14,528 $ 1,640 $ — $ — $ 10,087 $ 65,868

Six Months Ended June 30, 2022

Ports and Terminals

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

Lease income $ 1,041 $ 666 $ — $ — $ — $ — $ 1,707

Rail revenues 73,660 — 86 — — — 73,746

Terminal services revenues — 26,908 103 — — — 27,011

Roadside services revenues — — — — — 10,087 10,087

Other revenue — — ( 535 ) — — — ( 535 )

Total revenues $ 74,701 $ 27,574 $ ( 346 ) $ — $ — $ 10,087 $ 112,016

Presented below are the contracted minimum future annual revenues to be received under existing operating leases within the Jefferson Terminal segment as of June 30, 2023:

Operating Leases

3 unchanged sentences

On August 1, 2022, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive 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 March 31, 2023, the Incentive Plan provides for the issuance of up to 30.0 million shares.

As of June 30, 2023, the Incentive Plan provides for the issuance of up to 30.0 million shares.

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

During the three months ended March 31, 2023, the Manager transferred 2,173,914 of its options to certain employees of the Manager.

Director compensation

During the six months ended June 30, 2023, we issued 25,479 shares of common stock to certain directors as compensation.

During the six months ended June 30, 2023, the Manager tran sferred 2,173,914 of its op tions to certain employees of the Manager.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Subsidiary stock-based compensation

The following table presents the expense related to our subsidiary stock-based compensation arrangements:

Expense Recognized During the Three Months Ended March 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

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

2023 2022 2023 2022

Restricted Shares $ 303 $ 538 $ 747 $ 1,076 $ 765 0.7

12 unchanged sentences

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

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 retirement benefit plan costs for the three months ended March 31, 2023 and 2022.

The following table summarizes our retirement benefit plan costs.

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

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

Three Months Ended June 30,

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

4 unchanged sentences

Total $ 419 $ 854 $ 512 $ 763

The total employer contributions for the three months ended March 31, 2023 was $ 0.3 million, and the expected remaining scheduled employer contributions for the year ending December 31, 2023 is $ 1.2 million.

Six Months Ended June 30,

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

Service costs $ 696 $ 892 $ 876 $ 1,075

Interest costs 234 748 148 450

Amortization of prior service costs — 68 — —

Amortization of actuarial gains ( 92 ) — — —

Total $ 838 $ 1,708 $ 1,024 $ 1,525

The total employer contributions for the six months ended June 30, 2023 and 2022 was $ 0.6 million and $ 0.3 million, respectively, and the expected remaining scheduled employer contributions for the year ending December 31, 2023 is $ 0.9 million.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Federal $ — $ 62 $ — $ 62

State and local 260 71 442 142

Foreign — — — —

Total current provision 260 133 442 204

1 unchanged sentence

State and local 240 265 970 720

Foreign — — — —

Total deferred provision 563 1,814 2,110 3,327

12 unchanged sentences

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 three months ended March 31, 2023, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the six months ended June 30, 2023, 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 2019.

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 March 31, 2023.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND 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 June 30, 2023.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

10 unchanged sentences

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:

9 unchanged sentences

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 March 31,

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

2023 2022 2023 2022

Management fee $ 3,084 $ 3,065 $ 6,066 $ 7,226

2 unchanged sentences

Total $ 3,084 $ 3,065 $ 6,066 $ 7,226

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

4 unchanged sentences

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 March 31,

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

2023 2022 2023 2022

Classification in the Consolidated and Combined Consolidated Statements of Operations:

8 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Accrued management fees $ 6,066 $ 3,092

Other payables 4,101 —

As of March 31, 2023 and December 31, 2022, there were no receivables from the Manager.

As of June 30, 2023 and December 31, 2022, there were no receivables from the Manager.

Other Affiliate Transactions

As of March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022 was $( 50.3 ) million and $( 41.1 ) million, respectively.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

As of June 30, 2023 and December 31, 2022, 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 June 30, 2023 and December 31, 2022 was $( 60.3 ) million and $( 41.1 ) million, respectively.

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Non-controlling interest share of net loss $ ( 10,048 ) $ ( 8,135 ) $ ( 19,233 ) $ ( 15,271 )

6 unchanged sentences

The Company subleases a portion of office space from an entity controlled by certain principals of Fortress since February 2023.

For the three months ended March 31, 2023, the Company incurred approximately $ 0.1 million of rent and office related expenses.

For the six months ended June 30, 2023, the Company incurred approximately $ 0.2 million of rent and office related expenses.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

On May 22, 2023, Fortress and Mubadala Investment Company, through its wholly owned asset management subsidiary Mubadala Capital (“Mubadala”), announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank Group Corp.

(“SoftBank”).

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

SEGMENT INFORMATION

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.

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

20 unchanged sentences

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

For the Three Months Ended March 31, 2023

Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Three Months Ended June 30, 2023

Ports and Terminals

10 unchanged sentences

Equity in earnings (losses) of unconsolidated entities — — — 1,639 ( 3,277 ) 13 ( 1,625 )

Loss on sale of assets, net ( 124 ) — — — — — ( 124 )

(Loss) gain on sale of assets, net ( 85 ) 732 — — — — 647

Interest expense ( 1,215 ) ( 7,978 ) ( 615 ) ( 1 ) — ( 14,373 ) ( 24,182 )

2 unchanged sentences

Income (loss) before income taxes 12,534 ( 18,661 ) ( 4,725 ) 3,059 ( 2,685 ) ( 22,571 ) ( 33,049 )

Provision for (benefit from) income taxes 720 152 40 — — ( 89 ) 823

Net income (loss) 11,814 ( 18,813 ) ( 4,765 ) 3,059 ( 2,685 ) ( 22,482 ) ( 33,872 )

Net income (loss) attributable to non-controlling interests in consolidated subsidiaries 28 ( 10,048 ) ( 255 ) — — ( 1 ) ( 10,276 )

Dividends and accretion on redeemable preferred stock — — — — — 15,257 15,257

Net income (loss) attributable to stockholders $ 11,786 $ ( 8,765 ) $ ( 4,510 ) $ 3,059 $ ( 2,685 ) $ ( 37,738 ) $ ( 38,853 )

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:

Three Months Ended June 30, 2023

Ports and Terminals

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

Adjusted EBITDA $ 20,304 $ 7,082 $ ( 1,636 ) $ 10,403 $ ( 1,448 ) $ ( 7,028 ) $ 27,677

Non-controlling share of Adjusted EBITDA 4,946

Equity in losses of unconsolidated entities ( 1,625 )

Interest costs on pension and OPEB liabilities ( 480 )

Dividends and accretion on redeemable preferred stock ( 15,257 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 6,886 )

Interest expense ( 24,182 )

Depreciation and amortization expense ( 20,292 )

Incentive allocations —

Asset impairment charges ( 602 )

Changes in fair value of non-hedge derivative instruments —

Losses on the modification or extinguishment of debt and capital lease obligations —

Acquisition and transaction expenses ( 636 )

Equity-based compensation expense ( 642 )

Provision for income taxes ( 823 )

Other non-recurring items ( 51 )

Net loss attributable to stockholders $ ( 38,853 )

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, 2023

Six Months Ended June 30, 2023

Ports and Terminals

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

Total revenues $ 83,551 $ 36,196 $ 2,494 $ — $ — $ 36,085 $ 158,326

Operating expenses 47,492 32,415 10,705 597 29 36,699 127,937

General and administrative — — — — — 6,903 6,903

Acquisition and transaction expenses 367 36 — 71 1 430 905

Management fees and incentive allocation to affiliate — — — — — 6,066 6,066

Depreciation and amortization 10,226 24,013 4,526 — — 1,662 40,427

Asset impairment 743 — — — — — 743

Total expenses 58,828 56,464 15,231 668 30 51,760 182,981

Other expense

Equity in earnings (losses) of unconsolidated entities — — — 9,400 ( 6,693 ) 34 2,741

(Loss) gain on sale of assets, net ( 209 ) 732 — — — — 523

Interest expense ( 2,170 ) ( 15,862 ) ( 1,203 ) ( 3 ) — ( 28,194 ) ( 47,432 )

Other (expense) income ( 1,096 ) ( 1,412 ) — 2,872 1,227 — 1,591

Total other (expense) income ( 3,475 ) ( 16,542 ) ( 1,203 ) 12,269 ( 5,466 ) ( 28,160 ) ( 42,577 )

Income (loss) before income taxes 21,248 ( 36,810 ) ( 13,940 ) 11,601 ( 5,496 ) ( 43,835 ) ( 67,232 )

Provision for income taxes 1,318 350 154 — — 730 2,552

Net income (loss) 19,930 ( 37,160 ) ( 14,094 ) 11,601 ( 5,496 ) ( 44,565 ) ( 69,784 )

6 unchanged sentences

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

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Ports and Terminals

3 unchanged sentences

Equity in earnings of unconsolidated entities 2,741

Interest and other costs on pension and OPEB liabilities ( 480 )

Interest costs on pension and OPEB liabilities ( 960 )

Dividends and accretion on redeemable preferred stock ( 29,827 )

14 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended March 31, 2022

Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Three Months Ended June 30, 2022

Port and Terminals

10 unchanged sentences

Interest expense ( 17 ) ( 6,127 ) ( 341 ) — — ( 1 ) ( 6,486 )

Other expense ( 360 ) ( 99 ) — — 528 ( 528 ) ( 459 )

Other (expense) income ( 305 ) ( 1,291 ) — — 552 491 ( 553 )

Total other (expense) income ( 322 ) ( 7,418 ) ( 341 ) ( 12,971 ) ( 381 ) 535 ( 20,898 )

8 unchanged sentences

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

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Port and Terminals

2 unchanged sentences

Non-controlling share of Adjusted EBITDA 3,716

Equity in income of unconsolidated entities ( 22,043 )

Interest and other costs on pension and OPEB liabilities —

Equity in losses of unconsolidated entities ( 13,859 )

Interest costs on pension and OPEB liabilities —

Dividends and accretion on redeemable preferred stock —

14 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2022

Six Months Ended June 30, 2022

Port and Terminals

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

Total revenues $ 74,701 $ 27,574 $ ( 346 ) $ — $ — $ 10,087 $ 112,016

Operating expenses 41,930 27,384 7,998 168 10 9,807 87,297

General and administrative — — — — — 4,928 4,928

Acquisition and transaction expenses 355 — — — 29 12,724 13,108

Management fees and incentive allocation to affiliate — — — — — 7,226 7,226

Depreciation and amortization 9,791 19,439 4,745 — — 340 34,315

Total expenses 52,076 46,823 12,743 168 39 35,025 146,874

Other (expense) income

Equity in losses (earnings) of unconsolidated entities — — — ( 34,352 ) ( 1,638 ) 88 ( 35,902 )

Interest expense ( 79 ) ( 12,237 ) ( 628 ) — — ( 1 ) ( 12,945 )

Other (expense) income ( 665 ) ( 1,390 ) — — 1,080 ( 37 ) ( 1,012 )

Total other (expense) income ( 744 ) ( 13,627 ) ( 628 ) ( 34,352 ) ( 558 ) 50 ( 49,859 )

Income (loss) before income taxes 21,881 ( 32,876 ) ( 13,717 ) ( 34,520 ) ( 597 ) ( 24,888 ) ( 84,717 )

Provision for income taxes 3,333 137 — — 61 — 3,531

Net income (loss) 18,548 ( 33,013 ) ( 13,717 ) ( 34,520 ) ( 658 ) ( 24,888 ) ( 88,248 )

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

Net income (loss) attributable to Former Parent $ 18,548 $ ( 17,742 ) $ ( 13,067 ) $ ( 34,520 ) $ ( 658 ) $ ( 24,863 ) $ ( 72,302 )

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 Former Parent:

Six Months Ended June 30, 2022

Port and Terminals

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

Adjusted EBITDA $ 32,374 $ 7,964 $ ( 8,355 ) $ 13,399 $ ( 303 ) $ ( 11,963 ) $ 33,116

Non-controlling share of Adjusted EBITDA 7,532

Equity in losses of unconsolidated entities ( 35,902 )

Interest costs on pension and OPEB liabilities —

Dividends and accretion on redeemable preferred stock —

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 12,232 )

Interest expense ( 12,945 )

Depreciation and amortization expense ( 34,315 )

Incentive allocations —

Asset impairment charges —

Changes in fair value of non-hedge derivative instruments 748

Losses on the modification or extinguishment of debt and capital lease obligations —

Acquisition and transaction expenses ( 13,108 )

Equity-based compensation expense ( 1,665 )

Provision for income taxes ( 3,531 )

Other non-recurring items —

Net loss attributable to Former Parent $ ( 72,302 )

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.

March 31, 2023

June 30, 2023

Ports and Terminals

47 unchanged sentences

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 March 31, 2023, the Company has $ 32.1 million of dividends PIK increasing our Redeemable Preferred Stock balance.

Dividends recorded in Dividends and accretion on redeemable preferred stock on the Consolidated and Combined Consolidated Statement of Operations totaled $ 12.9 million for the three months ended March 31, 2023.

As of June 30, 2023, the Company has $ 45.8 million of dividends PIK increasing our Redeemable Preferred Stock balance.

Dividends recorded in Dividends and accretion on redeemable preferred stock on the Consolidated and Combined Consolidated Statement of Operations totaled $ 13.6 million and $ 26.5 million for the three and six months ended June 30, 2023, respectively.

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 and Combined Consolidated Statement of Operations, totaled $ 1.6 million for the three months ended March 31, 2023.

Mandatory Redemption :

4 unchanged sentences

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 March 31, 2023, it would be redeemable for $ 448.2 million.

If the Redeemable Preferred Stock were redeemed as of June 30, 2023, it would be redeemable for $ 448.2 million.

FTAI INFRASTRUCTURE INC.

6 unchanged sentences

The calculation of basic and diluted LPS is presented below:

Three Months Ended March 31,

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

(in thousands, except per share data) 2023 2022 2023 2022

11 unchanged sentences

________________________________________________________

(1) Three months ended March 31, 2023 includes penny warrants which can be converted into a fixed amount of our stock.

(2) Diluted LPS for the three months ended March 31, 2023 includes the dilutive effect of subsidiary earnings per share .

For the three months ended March 31, 2023, 1,647,839 shares have been excluded from the calculation of Diluted LPS because the impact would be anti-dilutive.

(1) Three and six months ended June 30, 2023 includes penny warrants which can be converted into a fixed amount of our stock.

(2) Diluted LPS for the three and six months ended June 30, 2023 includes the dilutive effect of subsidiary earnings per share .

For the three and six months ended June 30, 2023, 2,345,888 and 2,007,077 shares, respectively, have been excluded from the calculation of Diluted LPS because the impact would be anti-dilutive.

On the Spin-off Date, FTAI distributed one share of FTAI Infrastructure, Inc.

2 unchanged sentences

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 months ended March 31, 2022, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

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 FTAI Infrastructure, Inc.

1 unchanged sentence

Common Stock Warrants

A summary of the status of the Company’s outstanding stock warrants and changes during the three months ended March 31, 2023 is as follows:

A summary of the status of the Company’s outstanding stock warrants and changes during the six months ended June 30, 2023 is as follows:

Number of Warrants Weighted Average Exercise Price

2 unchanged sentences

Exercised — —

Outstanding as of March 31, 2023

Outstanding as of June 30, 2023 (1)

6,685,132 $ 4.96

Warrants exercisable as of March 31, 2023

Warrants exercisable as of June 30, 2023 (1)

6,685,132 $ 4.96

The weighted average remaining contractual term of the outstanding warrants as of March 31, 2023 is 7.3 years.

The aggregate intrinsic value of the warrants as of March 31, 2023 is $ 9.5 million.

COMMITMENTS AND CONTINGENCIES

________________________________________________________

(1) Weighted average exercise price as of June 30, 2023 includes adjustments for quarterly dividend payments.

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

The weighted average remaining contractual term of the outstanding warrants as of June 30, 2023 is 7.1 years.

The aggregate intrinsic value of the warrants as of June 30, 2023 is $ 12.3 million.

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.

1 unchanged sentence

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

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 year ended December 31, 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 $ 0.9 million for the next twelve months as of March 31, 2023.

The 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 year ended December 31, 2022.

SUBSEQUENT EVENTS

On April 3, 2023, our equity method investee, Long Ridge, entered into an agreement to sell certain of its assets to our subsidiary, Transtar, for $ 5.0 million.

On May 2, 2023, our board of directors declared a cash dividend on our common stock of $ 0.03 per share for the quarter ended March 31, 2023, payable on May 26, 2023 to the holders of record on May 15, 2023.

On July 25, 2023, our board of directors declared a cash dividend on our common stock of $ 0.03 per share for the quarter ended June 30, 2023, payable on August 15, 2023 to the holders of record on August 8, 2023.

Offering of Additional Notes

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

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

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

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

Amendment to Certificate of Designations of our Series A Preferred Stock

On June 27, 2023, the Company’s board of directors approved a Certificate of Amendment (the “Amendment”) to the Certificate of Designations for its Series A Preferred Stock (the “Certificate of Designations”), which amends certain provisions of the Certificate of Designations to increase the aggregate principal amount of outstanding indebtedness that the Company and its subsidiaries may incur in order to facilitate the issuance of the additional $ 100.0 million of Senior Notes due 2027 (the “Additional Notes”) , subject to obtaining the prior affirmative vote or consent of the Majority Holders (as defined in the Certificate of Designations) to such Amendment.

On June 28, 2023, the holders of our Series A Preferred Stock (the “Series A Holders”) executed a unanimous written consent (the “Series A Consent”) pursuant to which the Series A Holders authorized, consented to and approved the offering of the Additional Notes and the Amendment, subject to certain customary conditions.

On July 5, 2023, the Series A Consent became effective and the Company filed the Amendment with the Secretary of State of the State of Delaware.

The Series A Holders received a customary fee for the consent and purchased $ 33.4 million aggregate principal amount of the Additional Notes.

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