What changed in this filing

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Item 1. Business

2024-03-27 compared with 2023-03-09 · 57 added, 68 removed, 216 unchanged (37% of the section changed)

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(“we”, “us”, “our”, or the “Company”) is in the business of acquiring, developing and operating assets and businesses that represent critical infrastructure for customers in the transportation, energy and industrial products industries.

We were formed on December 13, 2021 as FTAI Infrastructure LLC, a Delaware limited liability company and subsidiary of Fortress Transportation and Infrastructure Investors LLC (“Former Parent”).

Former Parent became a subsidiary of FTAI Aviation Ltd., a Cayman Islands exempted company and the surviving parent company (“FTAI Aviation”), upon completion of the transactions contemplated in that certain Agreement and Plan of Merger (the “Merger”) on November 10, 2022, between Former Parent and FTAI Aviation and certain other parties thereto.

Except as otherwise specified, prior to the Merger, “FTAI” refers to Former Parent and, following the Merger, “FTAI” refers to FTAI Aviation, in each case including their consolidated subsidiaries.

In connection with the spin-off of the infrastructure business (“FTAI Infrastructure”), as described below, FTAI Infrastructure LLC converted into FTAI Infrastructure Inc., a Delaware corporation, which holds all of the material assets and investments that comprised FTAI's former infrastructure business.

Prior to the spin-off, we operated as a subsidiary of FTAI, a Nasdaq-listed company that is externally managed and advised by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”).

Following the spin-off, FTAI Infrastructure Inc.

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

We were formed on December 13, 2021 as FTAI Infrastructure LLC, a Delaware limited liability company and subsidiary of FTAI Aviation Ltd.

(previously Fortress Transportation and Infrastructure Investors LLC;

“FTAI” or “Former Parent”).

In connection with the spin-off, FTAI Infrastructure LLC converted into FTAI Infrastructure Inc., a Delaware corporation, and acquired all of the material assets and investments that comprised FTAI's infrastructure business (“FTAI Infrastructure”).

On August 1, 2022 (the “Spin-off Date”), FTAI distributed to the holders of FTAI common shares, one share of FTAI Infrastructure Inc.

common stock for each FTAI common share held by such shareholder at the close of business on July 21, 2022 and we became an independent, publicly-traded company trading on The Nasdaq Global Select Market under the symbol “FIP.”

Our operations consist of four primary business lines:

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Corporate and other sources accounted for the remaining 21% of our total revenue.

We target sectors that we believe enjoy strong long-term growth potential and proactively seek investment opportunities within those sectors that we believe will generate strong risk-adjusted returns.

We target sectors that we believe value strong long-term growth potential and proactively seek investment opportunities within those sectors that we believe will generate strong risk-adjusted returns.

We take an opportunistic approach—targeting assets that are distressed or undervalued, or where we believe we can add value through active management, without heavy reliance on the use of financial leverage to generate returns.

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We believe that there are a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital and generally available capital for infrastructure projects in today’s marketplace, will allow us to take advantage of these opportunities.

As of December 31, 2022, we had total consolidated assets of $2.5 billion and total redeemable preferred stock and equity of $789.4 million.

Spin-Off of FTAI Infrastructure

On August 1, 2022, FTAI distributed to the holders of FTAI common shares one share of FTAI Infrastructure Inc.

common stock for each FTAI common share held by such shareholder at the close of business on July 21, 2022.

FTAI Infrastructure Inc.

was spun out as an entity taxed as a corporation for U.S.

federal income tax purposes and holds FTAI’s former (i) Transtar business, (ii) Jefferson Terminal business, (iii) Repauno business, (iv) Long Ridge investment, (v) Aleon and Gladieux investment, (vi) KRS business, (vii) Clean Planet USA investment, (viii) FYX business, (ix) CarbonFree business, and (x) Containers business.

FTAI Infrastructure Inc.

retained all related project-level debt of those entities.

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

entered into subscription agreements to issue $300.0 million of redeemable preferred stock and warrants and sold $500.0 million of 10.500% senior secured notes due 2027 (the “2027 Notes”), the net proceeds of which were remitted to FTAI in connection with the spin-off.

FTAI Infrastructure Inc.

is externally managed by the Manager.

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

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

The Management Agreement has an

initial term of six years.

The Manager is entitled to a management fee, incentive fees (comprised of income incentive fees and capital gains incentive fees) and reimbursement of certain expenses on substantially similar terms as the previously held agreements with the Manager.

As of December 31, 2023, we had total consolidated assets of $2.4 billion and redeemable preferred stock and equity of $0.7 billion.

We invest across a number of major sectors including energy, intermodal transport, ports and terminals and rail, and we may pursue acquisitions in other areas as and when opportunities arise in the future.

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We have several such opportunities currently identified, including significant potential for future investment at our Jefferson Terminal, Repauno and Long Ridge sites, in addition to our other assets, as discussed below.

Our Manager has significant prior experience in all of our target sectors, as well as a network of industry relationships, that we believe positions us well to make successful acquisitions and to actively manage and improve operations and cash flows of our existing and newly-acquired assets.

existing and newly-acquired assets.

These relationships include senior executives at lessors and operators, end users of transportation and infrastructure assets, as well as banks, lenders and other asset owners.

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We are externally managed by our Manager, an affiliate of Fortress, which has a dedicated team of experienced professionals focused on the acquisition of infrastructure assets since 2002.

On December 27, 2017, SoftBank Group Corp.

(“SoftBank”) completed its acquisition of Fortress (the “SoftBank Merger”).

On December 27, 2017, SoftBank completed its acquisition of Fortress (the “SoftBank Merger”).

In connection with the SoftBank Merger, Fortress operates within SoftBank as an independent business headquartered in New York.

Pursuant to the terms of the management agreement with our Manager, our Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors.

Pursuant to the terms of the management agreement with our Manager (the “Management Agreement”), our Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors.

Our Management Agreement has an initial six-year term and is automatically renewed for one-year terms thereafter unless terminated either by us or our Manager.

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In addition, we are obligated to reimburse certain expenses incurred by our Manager on our behalf.

On May 22, 2023, Fortress and 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.

While Fortress’s senior investment professionals are expected to remain at Fortress, including those individuals who perform services for us, there can be no assurance that the transaction will not have an adverse impact on us or our relationship with our Manager.

Our Portfolio

The following primarily comprise our Railroad business:

Transtar is comprised of five short-line freight railroads and one switching company, including two railroads that connect to U.S.

Steel Corporation’s (“USS”) largest production facilities in North America:

Transtar is comprised of six short-line freight railroads and one switching company:

the Gary Railway Company, Indiana;

The Lake Terminal Railroad Company, Ohio;

Union Railroad Company LLC, Pennsylvania;

East Ohio Valley Railroad Company, Ohio;

Fairfield Southern Company Inc., Alabama;

Delray Connecting Railroad Company, Michigan;

and the Texas & Northern Railroad Company, Texas.

Texas & Northern Railroad Company, Texas;

and the Union Railroad Company LLC, Pennsylvania.

Gary Railway Company, Indiana and Union Railroad Company LLC, Pennsylvania connect to two of U.S.

Steel Corporation’s (“USS”) largest production facilities in North America.

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

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Acquisition of Transtar

On July 28, 2021, FTAI completed the purchase of 100% of the equity interests of Transtar, which was a wholly owned short-line railroad subsidiary of U.S.

Steel, for a cash purchase price of $640.0 million, subject to certain customary adjustments set forth in the Transtar Purchase Agreement.

On July 28, 2021, FTAI completed the purchase of 100% of the equity interests of Transtar, which was a wholly owned short-line railroad subsidiary of USS, for a cash purchase price of $640.0 million, subject to certain customary adjustments set forth in the Transtar Purchase Agreement.

As of December 31, 2023, Transtar has approximately 440 employees, of which approximately 360 are subject to collective bargaining agreements.

Railway Services Agreement

On July 28, 2021, in connection with the closing of the Transtar Acquisition, Transtar, certain Transtar subsidiaries (together with Transtar, the “Transtar Parties”), and U.S.

Steel entered into a railway services agreement (the “Railway Services Agreement”).

Under the Railway Services Agreement, for an initial term of 15 years from and after the closing of the Transtar Acquisition, Transtar will continue to provide U.S.

Steel with rail haulage, switching and transportation services at U.S.

Steel’s facilities in and around Gary, Indiana, Pittsburgh, Pennsylvania, Fairfield, Alabama, Ecorse, Michigan, Lorain, Ohio and Lone Star, Texas, including but not limited to:

On July 28, 2021, in connection with the closing of the Transtar Acquisition, Transtar, certain Transtar subsidiaries (together with Transtar, the “Transtar Parties”), and USS entered into a railway services agreement (the “Railway Services Agreement”).

Under the Railway Services Agreement, for an initial term of 15 years from and after the closing of the Transtar Acquisition, Transtar will continue to provide USS with rail haulage, switching and transportation services at USS’s facilities in and around Gary, Indiana, Pittsburgh, Pennsylvania, Fairfield, Alabama, Ecorse, Michigan, Lorain, Ohio and Lone Star, Texas, including but not limited to:

railcar maintenance and repair services, locomotive maintenance, inspection and repair services, maintenance-of-way services, car management services, and rail and material handling services.

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Jefferson Terminal

In August 2014, FTAI and certain other Fortress affiliates purchased substantially all of the assets and assumed certain liabilities of Jefferson Terminal, a Texas-based group of companies developing crude oil and refined products logistics assets since 2012.

Jefferson Terminal is located on approximately 250 acres of land at the Port of Beaumont, Texas, a deep-water port near the mouth of the Neches River (the “Port”).

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Jefferson Terminal also transloads refined products, including automotive gasoline, diesel fuel, and other products, that nearby refineries produce and ship through its terminal by pipeline, rail and marine to other domestic and foreign markets in North and South America.

In addition to its property located at the Port, Jefferson Terminal owns an approximately 600-acre industrial property in Nederland, Texas (“Jefferson Terminal South”).

Currently, Jefferson Terminal is constructing a new ship dock at Jefferson Terminal South in order to handle ammonia for an adjacent customer under a 15-year throughput agreement.

Jefferson Terminal is currently exploring multiple opportunities for future development at Jefferson Terminal South.

Heavy crude oils, such as those produced in Utah and Western Canada, are in high demand on the Gulf Coast because most refineries in the area are configured to handle heavier crudes (previously sourced predominately from Mexico and Venezuela) than those in other parts of the United States.

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Jefferson Terminal is one of only a few terminals on the Gulf Coast that has heated unloading system capabilities to handle these heavier grades of crude.

As the production of North American heavy crude grows in excess of existing takeaway

capacity, demand for crude-by-rail to the Gulf Coast is expected to increase.

As the production of North American heavy crude grows in excess of existing takeaway capacity, demand for crude-by-rail to the Gulf Coast is expected to increase.

Refined products opportunities for storage and logistics are expected to be positively impacted by demand growth in export markets.

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This has spurred the rapid build-out of new Mexican rail terminals, as well as storage capacity on both sides of the U.S.-Mexico border.

To meet such increased demand, Jefferson Terminal operates a refined products system that receives three grades of products by direct pipeline connection from a large area refiner, as well as inland tank barge via the barge dock, stores the cargo in six tanks with a combined capacity of approximately 0.7 million barrels, and operates a 20 spot rail car loading system with the capacity to load approximately 70,000 barrels per day.

To meet such increased demand, Jefferson Terminal operates a refined products system that receives three grades of products by direct pipeline connection from a large area refiner, as well as an inland tank barge via the barge dock, which stores the cargo in six tanks with a combined capacity of approximately 0.7 million barrels, and operates a 20 spot rail car loading system with the capacity to load approximately 70,000 barrels per day.

This system may be further expanded to meet additional market demand.

Recent expansion projects completed include the construction of 10 new tanks and related infrastructure, consisting of approximately 1.9 million barrels of refined products storage to support international marine exports.

Additionally, a second ship dock is currently in development and expected to be in service during 2023.

In addition to the Jefferson Terminal, Jefferson Terminal owns several other energy and infrastructure-related assets, including 299 tank railcars for the purpose of leasing to third parties;

Recent expansion projects completed include the construction of a second ship dock in 2023, as well as 10 new tanks and related infrastructure, consisting of approximately 1.9 million barrels of refined products storage to support international marine exports.

In addition to the Jefferson Terminal and Jefferson Terminal South, Jefferson Terminal owns several other energy and infrastructure-related assets, including 299 tank railcars for the purpose of leasing to third parties;

pipeline rights-of-way;

an approximately 50-acre property with inter-coastal waterway access all of which can be developed as well as an approximately 605-acre industrial property in Nederland, Texas.

as well as an approximately 50-acre property with inter-coastal waterway access.

These assets can be deployed or developed in the future to meet market demands for transportation and hydrocarbon processing, and if successfully deployed or developed, may represent additional opportunities to generate stable, recurring cash flow.

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Shortly after the end of 2020, DRP completed its new state-of-the-art rail-to-ship transloading system.

This allows DRP to load Liquified Petroleum Gas (“LPG”) marine vessels from its new wharf, including 16 marine vessels loaded in 2022.

This allows DRP to load Liquified Petroleum Gas (“LPG”) marine vessels from its new wharf, including 13 fully refrigerated LPG marine vessels loaded in 2023.

As the newest marine terminal on the Delaware River, Repauno is designed to safely and efficiently handle a wide variety of freight, providing critical logistics services to a multitude of industrial segments.

In addition, Repauno is expanding its storage and transloading capacity, and pursuing accretive sustainable energy projects such as the development of a recycling facility on-site (see discussion of Clean Planet USA below).

In addition, Repauno is expanding its storage and transloading capacity, and pursuing accretive sustainable energy projects such as the export of green hydrogen and the development of a recycling facility on-site (see discussion of Clean Planet USA below).

The following primarily comprise our Power and Gas business:

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We no longer have a controlling interest in Long Ridge but still maintain significant influence through our retained interest and, therefore, now account for this investment in accordance with the equity method.

Long Ridge Energy & Power is one of the Appalachian Basin’s leading multimodal energy terminals with a 485 megawatt power plant, nearly 300 acres of flat land, two barge docks on the Ohio River, a unit-train-capable loop track and direct highway access.

In October 2021, Long Ridge completed its construction of its now fully-functional 485 MW combined-cycle power plant at the site and the associated plans to self-supply the natural gas fuel requirements for the plant.

In October 2021, Long Ridge completed its construction of its now fully-functional 485 megawatt combined-cycle power plant at the site and the associated plans to self-supply the natural gas fuel requirements for the plant.

Long Ridge operates one of the Appalachian Basin’s leading multimodal energy terminals, with nearly 300 acres of flat land, two barge docks on the Ohio River, a unit-train-capable loop track and direct highway access.

Long Ridge continues to evaluate opportunities to deploy its assets for sustainable and traditional energy projects and other value-driving enterprises.

For example, Long Ridge plans to eventually run its power plant on carbon-free hydrogen.

In collaboration with New Fortress Energy and GE, Long Ridge has test-blended carbon-free hydrogen as a fuel and intends to continue testing to increase that blend over time by blending hydrogen in the gas stream and transitioning the plant to be capable of burning 100% green hydrogen over the next decade.

In collaboration with New Fortress Energy and General Electric, Long Ridge has test-blended carbon-free hydrogen as a fuel and intends to continue testing to increase that blend over time by blending hydrogen in the gas stream and transitioning the plant to be capable of burning 100% green hydrogen over the next decade.

In April 2022, Long Ridge became the first large scale gas power plant in the U.S.

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This is also the first GE-H class turbine in the world to achieve this milestone.

Long Ridge has continued with plans for plant integration for hydrogen blending and to ensure safe and reliable industrial practices.

Long Ridge has continued to evaluate opportunities for plant integration of hydrogen blending and to ensure safe and reliable industrial practices.

For initial testing of hydrogen blending, Long Ridge has access to nearby industrial byproduct hydrogen.

For the production of green hydrogen with electrolysis, Long Ridge has access to water from the Ohio River.

Long Ridge also continues to explore possibilities for on-site development of projects using on-site power generation.

In particular, Long Ridge has an agreement with a company to develop a biodegradable plastics plant on site which would use on-

site power and produce environmentally-friendly plastic products.

For the production of green hydrogen through electrolysis, Long Ridge has direct access to water from the Ohio River.

Long Ridge also continues to explore possibilities for development of projects using on-site power generation.

In particular, Long Ridge has an agreement with a company to develop a biodegradable plastics plant on site which would use on-site power and produce environmentally-friendly plastic products.

Long Ridge also continues to explore the possibility for on-site data center development which would utilize Long Ridge’s on-site power capabilities.

Long Ridge West Virginia LLC

During 2022, Long Ridge West Virginia LLC (“Long Ridge WV”), a wholly owned subsidiary, purchased rights to gas properties in West Virginia.

In November 2023, we sold a 49.9% interest for $7.5 million in cash.

Long Ridge WV will focus on energy and gas development in the West Virginia region.

Following the sale, we no longer have a controlling interest in Long Ridge WV, but we still maintain significant influence through our retained interest and, therefore, account for this investment in accordance with the equity method as of and subsequent to the November 2023 sale.

The following primarily comprise our Sustainability and Energy Transition business:

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Aleon and Gladieux are governed by separate boards of directors.

Due to an internal reorganization of GM-FTAI Holdco LLC in June 2022, we now own a 27.4% indirect interest in each of Gladieux and Aleon.

Due to an internal reorganization of GM-FTAI Holdco LLC in June 2022, we now own a 27.4% indirect equity interest in each of Gladieux and Aleon.

Clean Planet USA

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FYX has developed a mobile and web-based application that connects fleet managers, owner-operators, and drivers with repair vendors to efficiently and reliably quote, dispatch, monitor, and bill comprehensive roadside and fleet repair services.

In May 2022, we purchased an additional 51% interest in FYX from an unrelated third party for cash consideration of $4.6 million, which resulted in our ownership of a majority stake in the entity and consolidation of the entity, and subsequently purchased an additional approximate 1% interest in FYX for cash consideration of $0.1 million.

FYX is currently recorded as part of the Corporate and Other segment.

In May 2022, FTAI purchased an additional 51% interest in FYX from an unrelated third party for cash consideration of $4.6 million, which resulted in our ownership of a majority stake in the entity and consolidation of the entity, and subsequently purchased an additional approximate 1% interest in FYX for cash consideration of $0.1 million.

In March 2023, we purchased the remaining non-controlling interest of FYX from an affiliate of our Manager for a purchase price of $4.4 million.

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

FYX is currently presented as part of the Corporate and Other segment.

Asset Management

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Our customers consist of global industrial and energy companies, including corporations that refine crude oil and trade petroleum products, manufacturers and local electricity markets and traders.

We maintain ongoing relationships and discussions with our customers and seek to have consistent dialogue.

We maintain ongoing relationships and discussions with our

customers and seek to have consistent dialogue.

In addition to helping us monitor the needs and quality of our customers, we believe these relationships help source additional opportunities and gain insight into attractive opportunities in the infrastructure sectors.

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

Aleon’s initial battery recycling plant is planned to be build-out at the Freeport site owned by Gladieux, leveraging their existing assets and infrastructure.

Aleon’s initial battery recycling plant is planned to be build-out at the Freeport site owned by Gladieux, leveraging its existing assets and infrastructure.

At full ramp, the plant is expected to process approximately 110,000 tons of spent lithium-ion batteries each year.

• Hydrogen-fueled power plant .

In October 2020, Long Ridge, located in Hannibal, Ohio, announced its plan to transition its 485 MW combined-cycle power plant to run on carbon-free hydrogen, in collaboration with New Fortress Energy, GE, Kiewit Power Constructors Co., Black & Veatch and NAES Corporation.

In October 2020, Long Ridge, located in Hannibal, Ohio, announced its plan to transition its 485 megawatt combined-cycle power plant to run on carbon-free hydrogen, in collaboration with New Fortress Energy, General Electric, Kiewit Power Constructors Co., Black & Veatch and NAES Corporation.

In April 2022, Long Ridge became the first large scale gas power plant in the U.S.

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Our Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors.

As of December 31, 2022, we have approximately 690 employees at our subsidiaries across our business segments, approximately 340 of whom are party to

collective bargaining agreements.

As of December 31, 2023, we have approximately 700 employees at our subsidiaries across our business segments, approximately 360 of whom are party to collective bargaining agreements.

We consider our relationship with our employees to be good and we focus heavily on employee engagement.

We have invested substantial time and resources into building our team, and our human capital management objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.

We have invested substantial time and resources into building our team, and our human capital

management objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.

To facilitate attraction and retention, we strive to create a diverse, inclusive, and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits programs.

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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-K

Item 1. Business