What changed in this filing

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Item 1. Financial Statements

2023-10-27 compared with 2023-07-27 · 226 added, 187 removed, 1084 unchanged (28% of the section changed)

3 unchanged sentences

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

Notes June 30, 2023 December 31, 2022

Notes September 30, 2023 December 31, 2022

Current assets:

25 unchanged sentences

200,000,000 shares authorized;

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)

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

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

15 310,401 264,590

1 unchanged sentence

2,000,000,000 shares authorized;

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

99,490,386 and 99,445,074 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively)

Additional paid in capital 862,675 911,599

9 unchanged sentences

(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 2023 2022 2023 2022

8 unchanged sentences

Other income (expense)

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

Gain on sale of assets, net 647 — 523 —

Equity in losses of unconsolidated entities 5 ( 9,914 ) ( 12,080 ) ( 7,173 ) ( 47,982 )

(Loss) gain on sale of assets, net ( 263 ) ( 134 ) 260 ( 134 )

Loss on extinguishment of debt 7 ( 2,020 ) — ( 2,020 ) —

Interest expense ( 25,999 ) ( 19,161 ) ( 73,431 ) ( 32,106 )

15 unchanged sentences

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited)

(Dollars in thousands)

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

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

2023 2022 2023 2022

1 unchanged sentence

Other comprehensive income (loss):

Other comprehensive income (loss) related to equity method investees, net 62,578 ( 47,714 ) 115,430 ( 144,662 )

Other comprehensive income (loss) related to equity method investees 5,504 ( 41,999 ) 120,934 ( 186,661 )

Change in pension and other employee benefit accounts ( 11 ) — ( 35 ) —

Comprehensive income (loss) 28,694 ( 85,674 ) 45,622 ( 232,910 )

Comprehensive (loss) income ( 44,556 ) ( 85,193 ) 1,066 ( 318,103 )

Comprehensive loss attributable to non-controlling interest ( 9,932 ) ( 8,381 ) ( 30,101 ) ( 24,327 )

Comprehensive income (loss) attributable to stockholders/Former Parent $ 38,970 $ ( 77,194 ) $ 65,791 $ ( 216,964 )

Comprehensive (loss) income attributable to stockholders/Former Parent $ ( 34,624 ) $ ( 76,812 ) $ 31,167 $ ( 293,776 )

See accompanying notes to consolidated and combined consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three and Six Months Ended June 30, 2023

Three and Nine Months Ended September 30, 2023

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

5 unchanged sentences

Acquisition of consolidated subsidiary ( 953 ) ( 3,495 ) ( 4,448 )

Distributions to non-controlling interest (20) —

Dividends declared on common stock ( 6,170 ) ( 6,170 )

1 unchanged sentence

Equity-based compensation 80 1,457 1,537

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

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

Net loss ( 40,117 ) ( 9,932 ) ( 50,049 )

1 unchanged sentence

Total comprehensive (loss) income — — ( 40,117 ) 5,493 ( 9,932 ) ( 44,556 )

Issuance of common shares 29 29

Distributions to non-controlling interest ( 1,626 ) ( 1,626 )

2 unchanged sentences

Equity-based compensation 6,985 ( 2,708 ) 4,277

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

Equity - September 30, 2023 $ 994 $ 862,675 $ ( 150,569 ) $ ( 179,234 ) $ ( 63,412 ) $ 470,454

FTAI INFRASTRUCTURE INC.

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

(Dollars in thousands)

Three and Nine Months Ended September 30, 2022

Common Stock 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 )

Acquisition of a consolidated subsidiary 3,054 3,054

Contribution 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 170 170

Net transfers from Former Parent 77,126 77,126

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

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

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

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

See accompanying notes to consolidated and combined consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net loss to net cash used in operating activities:

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

Gain on sale of assets, net ( 523 ) —

Equity in losses of unconsolidated entities 7,173 47,982

(Gain) loss on sale of assets, net ( 260 ) 134

Loss on extinguishment of debt 2,020 —

Equity-based compensation 5,814 3,042

5 unchanged sentences

Amortization of bond discount 3,472 —

(Benefit from) provision for credit losses ( 74 ) 90

Provision for credit losses 1,661 418

Accounts receivable ( 5,547 ) ( 20,476 )

9 unchanged sentences

Acquisition of property, plant and equipment ( 78,712 ) ( 172,226 )

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

Proceeds from sale of leasing equipment 116 —

3 unchanged sentences

Proceeds from debt 162,100 482,375

Repayment of debt ( 75,131 ) —

Payment of deferred financing costs ( 6,472 ) ( 12,803 )

Proceeds from issuance of redeemable preferred stock — 291,000

Redeemable preferred stock issuance costs — ( 16,418 )

Cash dividends - common stock ( 9,254 ) —

Capital contribution from non-controlling interests — 732

Net transfers from Former Parent, net — 111,396

Net transfers to Former Parent, net — ( 617,322 )

Settlement of equity-based compensation ( 90 ) ( 148 )

Distributions to non-controlling interests ( 1,647 ) —

Distribution to Manager — ( 79 )

Net cash provided by financing activities 69,506 127,337

5 unchanged sentences

Dividends and accretion on redeemable preferred stock ( 45,811 ) ( 9,263 )

FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Dollars in thousands)

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

Non-cash change in equity method investment 120,934 ( 186,662 )

Deferred financing costs ( 2,012 ) —

See accompanying notes to consolidated and combined consolidated financial statements.

41 unchanged sentences

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”.

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

Refer to Note 13 for additional discussion on corporate costs allocated from the Former Parent that are included in these combined consolidated financial statements .

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 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.

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

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

The results of operations for the three and nine months ended September 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 $ 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.

Total VIE assets of DRP were $ 301.1 million and $ 306.0 million, and total VIE liabilities of DRP were $ 33.6 million and $ 34.1 million as of September 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 $ 2.2 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.

We capitalized interest of $ 1.1 million and $ 2.6 million during the three months ended September 30, 2023 and 2022, respectively, and $ 3.9 million and $ 6.9 million during the nine months ended September 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 $ 4.9 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.

Our repairs and maintenance expenses were $ 5.3 million and $ 3.9 million during the three months ended September 30, 2023 and 2022, respectively, and $ 14.5 million and $ 9.3 million during the nine months ended September 30, 2023 and 2022, respectively, and are included in Operating expenses 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)

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.

2 unchanged sentences

When performing a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its net book value.

The undiscounted cash flows consist of cash flows from terminal services contracts and currently contracted leases, future projected leases, terminal service and freight rail rates,

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

transition costs, and estimated residual or scrap values.

The undiscounted cash flows consist of cash flows from terminal services contracts and currently contracted leases, future projected leases, terminal service and freight rail rates, transition costs, and estimated residual or scrap values.

In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge.

1 unchanged sentence

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 $ 0.3 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.

Other Current Assets — Other current assets is primarily comprised of commodities inventory of $ 0.3 million and $ 3.6 million, deposits of $ 1.9 million and $ 22.8 million, note receivable of $ 21.4 million and $ 20.0 million, prepaid expenses of $ 11.0 million and $ 16.4 million, and other assets of $ 2.7 million and $ 4.5 million as of September 30, 2023 and December 31, 2022, respectively.

Other Assets — Other assets primarily consists of a note receivable of $ 10.8 million as of both September 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, 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.

Other Current Liabilities — Other current liabilities primarily include environmental liabilities of $ 0.5 million and $ 4.1 million, insurance premium liabilities of $ 3.4 million and $ 6.2 million, deposits of $ 7.5 million and $ — million , and deferred revenue of $ 5.2 million and $ 3.3 million as of September 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 June 30, 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, $ 147.2 million, and $ 5.4 million, respectively, as of September 30, 2023.

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, respectively, as of December 31, 2022.

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 which 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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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 %.

3 unchanged sentences

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.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

2 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 and six months ended June 30, 2023 and 2022.

There were no impairments of goodwill for the three and nine months ended September 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 145 months and 148 months as of June 30, 2023 and December 31, 2022, respectively.

The weighted-average remaining amortization period for customer relationships was 144 months and 148 months as of September 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 $ 29.1 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.

Unamortized deferred financing costs of $ 33.1 million and $ 30.9 million as of September 30, 2023 and December 31, 2022, respectively, are included in Debt, net in the Consolidated Balance Sheets.

Amortization expense was $ 1.8 million and $ 1.3 million during the three months ended September 30, 2023 and 2022, respectively, and $ 4.9 million and $ 3.0 million during the nine months ended September 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.

16 unchanged sentences

Lease income is recognized on a straight-line basis over the terms of the relevant lease agreement.

Roadside Services Revenues — Roadside services revenue is revenue related to providing roadside assistance services to customers in the intermodal and over-the-road trucking industries.

Revenue is recognized when a performance obligation is satisfied by completing a repair service at a point in time.

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

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Roadside Services Revenues — Roadside services revenue is revenue related to providing roadside assistance services to customers in the intermodal and over-the-road trucking industries.

Revenue is recognized when a performance obligation is satisfied by completing a repair service at a point in time.

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

Other Revenue — Other revenue primarily consists of revenue related to the handling, storage and sale of raw materials.

21 unchanged sentences

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

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.

We earned approximately 55 % and 52 %, respectively, of total revenues for the three and nine months ended September 30, 2023 from one customer in the Railroad segment.

Additionally, we earned 12 % and 11%, respectively, of total revenues for the three and nine months ended September 30, 2023 from one customer in the Jefferson Terminal segment.

We earned 44 % and 54 %, respectively, of total revenues for the three and nine months ended September 30, 2022 from one customer in the Railroad segment.

We earned 10 % of total revenues for both the three and nine months ended September 30, 2022 from one customer in the Jefferson Terminal segment.

As of September 30, 2023 accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 53 % 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.

5 unchanged sentences

Acquisition and Transaction expenses — Acquisition and transaction expense is comprised of costs related to business combinations, dispositions and terminated deal costs related to asset acquisitions, including advisory, legal, accounting, valuation and other professional or consulting fees.

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 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 employee benefit accounts.

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Comprehensive (Loss) Income — Comprehensive (loss) income 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 (loss) income represents net 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 employee benefit accounts.

Derivative Financial Instruments

3 unchanged sentences

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 Consolidated and Combined Consolidated Statements of Comprehensive Income (Loss) and recorded in Accumulated other comprehensive loss in our Consolidated Balance Sheets.

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) Income and recorded in Accumulated other comprehensive loss in our 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 Consolidated and Combined Consolidated Statements of Cash Flows.

2 unchanged sentences

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

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

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

24 unchanged sentences

Leasing equipment, net is summarized as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Leasing equipment $ 44,039 $ 44,179

2 unchanged sentences

Depreciation expense for leasing 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,

2023 2022 2023 2022

2 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Land, site improvements and rights $ 184,685 $ 183,640

13 unchanged sentences

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,

2023 2022 2023 2022

5 unchanged sentences

Carrying Value

Investment Ownership Percentage June 30, 2023 December 31, 2022

Investment Ownership Percentage September 30, 2023 December 31, 2022

Intermodal Finance I, Ltd.

6 unchanged sentences

________________________________________________________

(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.

(1) The carrying value of $( 7.8 ) million and $( 187.2 ) million as of September 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 nine months ended September 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,

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

2023 2022 2023 2022

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

As of September 30, 2023, Intermodal owns a portfolio of approximately 211 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 $ 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.

The Company made an additional $ 51.0 million of investment in Long Ridge as part of the shareholder loan agreement during the nine months ended September 30, 2023.

As of September 30, 2023, the balance of the note receivable was $ 83.5 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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Balance Sheet

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Total liabilities and equity $ 985,460 $ 987,829

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

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

Income Statement 2023 2022 2023 2022

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Total other income (expense) ( 24 ) 11 207 ( 202 )

Net income (loss) $ 3,271 $ ( 25,892 ) $ 18,763 $ ( 68,566 )

Net (loss) income

$ ( 14,086 ) $ ( 18,408 ) $ 4,677 $ ( 86,973 )

FTAI INFRASTRUCTURE INC.

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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 June 30, 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 September 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:

June 30, 2023

September 30, 2023

Jefferson Terminal Railroad Total

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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,

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

2023 2022 2023 2022

Amortization of customer relationships $ 1,898 $ 1,897 $ 5,679 $ 5,657

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

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

Remainder of 2023 $ 1,888

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Outstanding Borrowings

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

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

Loans payable

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12/27/25 — 10,000

Credit Agreement (i) Base Rate + 6.50 %;

(ii) Adjusted Term SOFR + 7.50 %

12/31/23 25,000 —

Total loans payable 88,800 97,200

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(1) Requires a quarterly commitment fee at a rate of 1.000 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(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 $ 23,027 and $ 25,172 at June 30, 2023 and December 31, 2022, respectively.

(2) Required 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 $ 26,200 and $ 25,172 at September 30, 2023 and December 31, 2022, respectively.

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 (see below), and used a portion of the net proceeds to repay the Credit Agreement in full.

We recognized a loss on extinguishment of debt of $1.1 million.

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.

Transtar Revolver

On December 27, 2022, our subsidiary entered into a revolving credit facility (the “Transtar Revolver”) that provided for revolving loans in the aggregate amount of $ 25.0 million.

In January 2023, our subsidiary entered into an amendment to the Transtar Revolver for an additional $ 25.0 million, for a total facility of $ 50.0 million.

In July 2023, we issued an additional $ 100.0 million aggregate principal amount of 10.500 % Senior Notes due 2027 (see below), and used a portion of the net proceeds to repay in full and terminate the Transtar Revolver.

We recognized a loss on extinguishment of debt of $0.9 million.

Senior Notes Due 2027

On July 5, 2023, we issued an additional $ 100.0 million aggregate principal amount of 10.500 % Senior 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 Senior Notes due 2027, 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 were in compliance with all debt covenants as of September 30, 2023.

FAIR VALUE MEASUREMENTS

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• 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 June 30, 2023 and December 31, 2022, by level within the fair value hierarchy.

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 our financial assets measured at fair value on a recurring basis as of September 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

June 30, 2023 June 30, 2023

September 30, 2023 September 30, 2023

Total Level 1 Level 2 Level 3 Valuation Technique

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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.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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 Consolidated Balance Sheets are presented in the table below:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Series 2020 A Bonds (1)

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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.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Ports and Terminals

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Total revenues $ 41,864 $ 16,610 $ 4,087 $ — $ — $ 18,145 $ 80,706

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Ports and Terminals

6 unchanged sentences

Total revenues $ 125,415 $ 52,806 $ 6,581 $ — $ — $ 54,230 $ 239,032

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Ports and Terminals

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

Six Months Ended June 30, 2022

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Nine Months Ended September 30, 2022

Ports and Terminals

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

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:

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, 2023:

Operating Leases

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

As of September 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.

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)

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

During the nine months ended September 30, 2023, the Manager transferred 2,173,914 of its op tions to certain employees of the Manager.

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 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)

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

2023 2022 2023 2022

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Total $ 564 $ 1,377 $ 2,021 $ 3,042 $ 1,951

Restricted Stock Units to Subsidiary Employees

During the nine months ended September 30, 2023, we issued restricted stock units (“RSUs”) of our common stock that had a grant date fair value of $ 16.9 million, based on the closing price of FIP’s stock on the grant date, and vest over three years.

These awards were made to employees of certain of our subsidiaries, are subject to continued employment, and the

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

compensation expense is recognized ratably over the vesting periods.

This grant fully canceled and replaced the vested and unvested restricted shares of our subsidiary issued in the first quarter of 2021.

The following table presents the expense related to our restricted stock units to subsidiary employees:

2023 2022 2023 2022

Restricted Stock Units $ 3,713 $ — $ 3,713 $ — $ 9,890 2.4

Total $ 3,713 $ — $ 3,713 $ — $ 9,890

RETIREMENT BENEFIT PLANS

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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 June 30,

Three Months Ended September 30,

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

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Total $ 419 $ 854 $ 512 $ 763

Six Months Ended June 30,

Nine Months Ended September 30,

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

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Total $ 1,257 $ 2,562 $ 1,535 $ 2,288

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.

The total employer contributions for the nine months ended September 30, 2023 and 2022 was $ 1.5 million and $ 1.4 million, respectively, and there are no expected remaining scheduled employer contributions for the year ending December 31, 2023.

FTAI INFRASTRUCTURE INC.

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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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

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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 six months ended June 30, 2023, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the nine months ended September 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 June 30, 2023.

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, 2023.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

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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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

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The following table summarizes our reimbursements to the Manager:

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

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

2023 2022 2023 2022

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Accrued management fees $ 7,343 $ 3,092

Other payables $ 3,583 $ —

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

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

Other Affiliate Transactions

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.

As of September 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 September 30, 2023 and December 31, 2022 was $( 71.1 ) million and $( 41.1 ) 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,

2023 2022 2023 2022

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

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

For the three and nine months ended September 30, 2023, the Company incurred approximately $0.1 million and $ 0.3 million of rent and office related expenses, respectively.

FTAI INFRASTRUCTURE INC.

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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 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.

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 and other non-cash impacts.

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

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

For the Three Months Ended June 30, 2023

Three Months Ended June 30, 2023

For the Three Months Ended September 30, 2023

Three Months Ended September 30, 2023

Ports and Terminals

6 unchanged sentences

Depreciation and amortization 4,362 12,643 2,390 — — 755 20,150

Asset impairment 602 — — — — — 602

Total expenses 28,880 30,271 8,569 1,393 — 25,825 94,938

Other (expense) income

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

Equity in (losses) earnings of unconsolidated entities — — — ( 7,057 ) ( 2,867 ) 10 ( 9,914 )

(Loss) gain on sale of assets, net ( 264 ) 1 — — — — ( 263 )

Loss on extinguishment of debt ( 937 ) — — — — ( 1,083 ) ( 2,020 )

Interest expense ( 82 ) ( 8,280 ) ( 642 ) — — ( 16,995 ) ( 25,999 )

Other (expense) income ( 520 ) 109 — 2,149 649 — 2,387

Total other (expense) income ( 1,844 ) ( 7,595 ) ( 615 ) 3,281 ( 2,657 ) ( 14,360 ) ( 23,790 )

Total other expense ( 1,803 ) ( 8,170 ) ( 642 ) ( 4,908 ) ( 2,218 ) ( 18,068 ) ( 35,809 )

Income (loss) before income taxes 11,181 ( 21,831 ) ( 5,124 ) ( 6,301 ) ( 2,218 ) ( 25,748 ) ( 50,041 )

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Ports and Terminals

20 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2023

Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Nine Months Ended September 30, 2023

Ports and Terminals

8 unchanged sentences

Total expenses 87,708 86,735 23,800 2,061 30 77,585 277,919

Other expense

Other income (expense)

Equity in earnings (losses) of unconsolidated entities — — — 2,343 ( 9,560 ) 44 ( 7,173 )

(Loss) gain on sale of assets, net ( 473 ) 733 — — — — 260

Loss on extinguishment of debt ( 937 ) — — — — ( 1,083 ) ( 2,020 )

Interest expense ( 2,252 ) ( 24,142 ) ( 1,845 ) ( 3 ) — ( 45,189 ) ( 73,431 )

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Ports and Terminals

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Non-controlling share of Adjusted EBITDA 15,577

Equity in earnings of unconsolidated entities 2,741

Equity in losses of unconsolidated entities ( 7,173 )

Interest costs on pension and OPEB liabilities ( 1,440 )

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(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2022

Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Three Months Ended September 30, 2022

Port and Terminals

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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 )

Other (expense) income ( 311 ) ( 1,401 ) — ( 25 ) 473 132 ( 1,132 )

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

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

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

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

(Benefit from) provision for 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 loss attributable to non-controlling interests in consolidated subsidiaries — ( 8,135 ) ( 320 ) — — ( 25 ) ( 8,480 )

Net income (loss) attributable to Former Parent $ 11,592 $ ( 8,823 ) $ ( 4,947 ) $ ( 13,064 ) $ ( 481 ) $ ( 13,757 ) $ ( 29,480 )

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.

1 unchanged sentence

(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:

Three Months Ended June 30, 2022

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

Port and Terminals

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Other non-recurring items —

Net loss attributable to Former Parent $ ( 29,480 )

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

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2022

Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Port and Terminals

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Equity in losses (earnings) 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 )

Other (expense) income ( 976 ) ( 2,791 ) — ( 25 ) 1,553 95 ( 2,144 )

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

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

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

1 unchanged sentence

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

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 )

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.

1 unchanged sentence

(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

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

Port and Terminals

16 unchanged sentences

Other non-recurring items —

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

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

FTAI INFRASTRUCTURE INC.

4 unchanged sentences

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

June 30, 2023

September 30, 2023

Ports and Terminals

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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 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.

As of September 30, 2023, the Company has $ 60.1 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 $ 14.3 million and $ 40.9 million for the three and nine months ended September 30, 2023, respectively, and $ 8.2 million for both the three and nine months ended September 30, 2022.

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 and $ 3.2 million for the three and six months ended June 30, 2023, respectively.

Such accretion, recorded in Dividends and accretion on redeemable preferred stock on the Consolidated and Combined Consolidated Statement of Operations, totaled $ 1.7 million and $ 4.9 million for the three and nine months ended September 30, 2023, respectively, and $ 1.1 million for both the three and nine months ended September 30, 2022.

Mandatory Redemption :

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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 June 30, 2023, it would be redeemable for $ 448.2 million.

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

FTAI INFRASTRUCTURE INC.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Amendment to Certificate of Designations of Our Series A Preferred Stock

On July 5, 2023, a Certificate of Amendment (the “Amendment”) to the Certificate of Designations for its Series A Preferred Stock (the “Certificate of Designations”) became effective, amending 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”).

The holders of our Series A Preferred Stock received a customary fee for their consent and purchased $ 33.4 million aggregate principal amount of the Additional Notes.

EARNINGS PER SHARE AND EQUITY

3 unchanged sentences

The calculation of basic and diluted LPS is presented below:

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

Three Months Ended September 30,

Nine Months Ended September 30,

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

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________________________________________________________

(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.

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

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

For the three and nine months ended September 30, 2023, 3,023,965 and 2,343,212 sha res, 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 and six months ended June 30, 2022, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

For the three and nine months ended September 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.

outstanding prior to the spin-off.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Common Stock Warrants

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:

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

Number of Warrants Weighted Average Exercise Price

2 unchanged sentences

Exercised — —

Outstanding as of June 30, 2023 (1)

Outstanding as of September 30, 2023 (1)

6,685,132 $ 4.95

Warrants exercisable as of June 30, 2023 (1)

Warrants exercisable as of September 30, 2023 (1)

6,685,132 $ 4.95

________________________________________________________

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(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.

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

The weighted average remaining contractual term of the outstanding warrants as of September 30, 2023 is 6.8 years.

The aggregate intrinsic value of the warrants as of September 30, 2023 is $ 10.7 million.

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

SUBSEQUENT EVENTS

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.

On October 26, 2023, our board of directors declared a cash dividend on our common stock of $ 0.03 per share for the quarter ended September 30, 2023, payable on November 16, 2023 to the holders of record on November 9, 2023.

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