What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-27 compared with 2023-03-09 · 397 added, 376 removed, 1167 unchanged (40% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated and Combined Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated and Combined Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021

Consolidated and Combined Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022, 2021 and 2020

Consolidated and Combined Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021

Consolidated and Combined Consolidated Statement of Changes in Equity for the years ended December 31, 2023, 2022 and 2021

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Opinion on the Financial Statements

We have audited the accompanying consolidated and combined consolidated balance sheets of FTAI Infrastructure Inc.

(the Company) as of December 31, 2022 and 2021, the related consolidated and combined consolidated statements of operations, comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated and combined consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of FTAI Infrastructure Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated and combined consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated and combined consolidated financial statements”).

In our opinion, the consolidated and combined consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 8, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 26, 2024 expressed an adverse opinion thereon.

Basis for Opinion

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated and combined consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the account or disclosure to which it relates.

The communication of critical audit matter does not alter in any way our opinion on the consolidated and combined consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Valuation of Goodwill-Jefferson Terminal Reporting Unit

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Auditing the fair value estimate of the Jefferson Terminal reporting unit used in the annual goodwill impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the Jefferson Terminal reporting unit.

In particular, the fair value estimate was sensitive to significant assumptions such as the forecasted revenue growth rates, earnings before interest, income taxes, depreciation and amortization (“EBITDA”) margins and discount rate, which are affected by expectations about the Company’s ability to increase volumes from existing contracts as well as expectations about the overall industry, market and economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment test process, including controls over management’s review of valuation methodology and significant assumptions described above.

To test the estimated fair value of the Company’s Jefferson Terminal reporting unit for use in the goodwill impairment assessment, we performed audit procedures that included, among others, assessing the valuation methodology used and testing the significant assumptions described above and the completeness and accuracy of the underlying data used by the Company in its impairment test.

In particular, the fair value estimate was sensitive to significant assumptions such as the forecasted revenue growth rates, earnings before interest, income taxes, depreciation and amortization (“EBITDA”) margins, capital expenditures and discount rate, which are affected by expectations about the Company’s ability to secure new contracts and increase volumes from existing contracts as well as expectations about the overall industry, market and economic conditions.

How We Addressed the Matter in Our Audit To test the estimated fair value of the Company’s Jefferson Terminal reporting unit for use in the goodwill impairment assessment, we performed audit procedures that included, among others, assessing the valuation methodology used and testing the significant assumptions, described above, and the completeness and accuracy of the underlying data used by the Company in its impairment test.

For example, we compared significant assumptions used by management to current industry, market and economic trends and to the historical results of the reporting unit and other guideline companies within the same industry.

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FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

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

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200,000,000 shares authorized;

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

redemption amount of $ 448.2 million as of December 31, 2022)

Net Former Parent investment $ — $ 1,617,601

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

redemption amount of $ 446.5 million and $ 448.2 million as of December 31, 2023 and December 31, 2022, respectively)

16 325,232 264,590

Common stock ($ 0.01 par value per share;

2,000,000,000 shares authorized;

99,445,074 shares issued and outstanding at December 31, 2022)

100,589,572 and 99,445,074 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively)

Additional paid in capital 843,971 911,599

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Accumulated other comprehensive loss ( 178,515 ) ( 300,133 )

Stockholders'/Former Parent company equity 551,623 1,462,137

Stockholders' equity 484,289 551,623

Non-controlling interests in equity of consolidated subsidiaries ( 71,430 ) ( 26,829 )

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Depreciation and amortization 3, 4, 6 80,992 70,749 54,016

Asset impairment 743 — —

Total expenses 364,847 319,605 191,758

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Equity in losses of unconsolidated entities 5 ( 24,707 ) ( 67,399 ) ( 13,499 )

(Loss) gain on sale of assets, net ( 1,603 ) 16 ( 8 )

Gain (loss) on sale of assets, net 6,855 ( 1,603 ) 16

Loss on extinguishment of debt ( 2,036 ) — —

Interest expense ( 99,603 ) ( 53,239 ) ( 16,019 )

Other (expense) income ( 3,169 ) ( 8,930 ) 92

Other income (expense) 6,586 ( 3,169 ) ( 8,930 )

Total other expense ( 112,905 ) ( 125,410 ) ( 38,432 )

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Dividends and accretion of redeemable preferred stock 62,400 23,657 —

Net loss attributable to stockholders and Former Parent $ ( 177,241 ) $ ( 79,869 ) $ ( 55,201 )

Net loss attributable to stockholders/Former Parent $ ( 183,736 ) $ ( 177,241 ) $ ( 79,869 )

Loss per share:

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FTAI INFRASTRUCTURE INC.

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED AND COMBINED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

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Net loss $ ( 159,750 ) $ ( 187,517 ) $ ( 106,341 )

Other comprehensive loss:

Other comprehensive loss related to equity method investees, net (1)

Other comprehensive income (loss):

Other comprehensive income (loss) related to equity method investees (1)

123,845 ( 149,078 ) ( 128,990 )

Changes in pension and other employee benefit accounts ( 2,227 ) 4,409 ( 237 )

Total other comprehensive loss ( 144,669 ) ( 129,227 ) ( 26,609 )

Total other comprehensive income (loss) 121,618 ( 144,669 ) ( 129,227 )

Comprehensive loss ( 38,132 ) ( 332,186 ) ( 235,568 )

Comprehensive loss attributable to non-controlling interests ( 38,414 ) ( 33,933 ) ( 26,472 )

Comprehensive loss attributable to stockholders and Former Parent $ ( 298,253 ) $ ( 209,096 ) $ ( 81,810 )

Comprehensive income (loss) attributable to stockholders/Former Parent $ 282 $ ( 298,253 ) $ ( 209,096 )

______________________________________________________________________________________

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Total comprehensive loss — ( 92,747 ) — ( 60,837 ) ( 144,669 ) ( 33,933 ) ( 332,186 )

Net transfers from Former Parent 698,179 — 698,179

Equity-based compensation — 4,038 4,038

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

Net loss ( 92,747 ) ( 60,837 ) ( 33,933 ) ( 187,517 )

Other comprehensive loss ( 144,669 ) ( 144,669 )

Total comprehensive loss — ( 92,747 ) — ( 60,837 ) ( 144,669 ) ( 33,933 ) ( 332,186 )

Net transfers to Former Parent ( 617,321 ) ( 617,321 )

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Equity - December 31, 2022 $ 994 $ — $ 911,599 $ ( 60,837 ) $ ( 300,133 ) $ ( 26,829 ) $ 524,794

Net loss ( 121,336 ) ( 38,414 ) ( 159,750 )

Other comprehensive income 121,618 121,618

Total comprehensive (loss) income — — — ( 121,336 ) 121,618 ( 38,414 ) ( 38,132 )

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

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

Issuance of common shares 12 16 28

Dividends and accretion of redeemable preferred stock ( 62,400 ) ( 62,400 )

Dividends declared on common stock ( 12,372 ) ( 12,372 )

Settlement of equity-based compensation ( 1,629 ) ( 534 ) ( 2,163 )

Equity-based compensation 9,710 ( 511 ) 9,199

Equity - December 31, 2023 $ 1,006 $ — $ 843,971 $ ( 182,173 ) $ ( 178,515 ) $ ( 71,430 ) $ 412,859

See accompanying notes to the consolidated and combined consolidated financial statements.

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Net loss $ ( 159,750 ) $ ( 187,517 ) $ ( 106,341 )

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

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

Equity in losses of unconsolidated entities 24,707 67,399 13,499

Loss (gain) on sale of assets 1,603 ( 16 ) 8

(Gain) loss on sale of assets ( 6,855 ) 1,603 ( 16 )

Loss on extinguishment of debt 2,036 — —

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Depreciation and amortization 80,992 70,749 54,016

Asset impairment 743 — —

Change in deferred income taxes 2,016 3,982 ( 3,867 )

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Amortization of deferred financing costs 6,769 4,393 2,599

Bad debt expense (recoveries) 575 74 ( 1 )

Bad debt expense 1,977 575 74

Amortization of bond discount 4,853 1,903 —

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Accounts payable and accrued liabilities 8,553 7,013 15,475

Management fees payable to affiliate — ( 19 ) —

Other liabilities 1,125 ( 4,709 ) 6,239

Net cash used in operating activities ( 42,690 ) ( 61,716 ) ( 46,860 )

Net cash provided by (used in) operating activities 5,513 ( 42,690 ) ( 61,716 )

Cash flows from investing activities:

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Acquisition of business, net of cash acquired ( 4,448 ) ( 3,819 ) ( 627,090 )

Acquisition of leasing equipment ( 1,724 ) — —

Acquisition of property, plant and equipment ( 99,022 ) ( 217,141 ) ( 140,897 )

Investment in convertible promissory notes ( 36,044 ) ( 47,454 ) ( 10,000 )

Proceeds from sale of leasing equipment 105 — —

Proceeds from sale of property, plant and equipment 1,087 7,144 4,494

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Settlement of equity-based compensation ( 2,161 ) ( 593 ) —

Net transfers from Former Parent ( 617,321 ) 698,179 325,435

Net transfers to (from) Former Parent — ( 617,321 ) 698,179

Cash dividends - common stock ( 12,372 ) ( 3,082 ) —

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Net cash provided by financing activities 79,447 157,743 1,136,866

Net increase (decrease) in cash and cash equivalents and restricted cash ( 152,213 ) 246,434 38,552

Net (decrease) increase in cash and cash equivalents and restricted cash ( 62,163 ) ( 152,213 ) 246,434

Cash and cash equivalents and restricted cash, beginning of period 149,642 301,855 55,421

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FTAI Infrastructure Inc.

(“we”, “us”, “our”, or the “Company”) is a Delaware corporation and was originally formed as a limited liability company on December 13, 2021 in connection with the spin-off of the infrastructure business (“FTAI Infrastructure”) of Fortress Transportation and Infrastructure Investors LLC (“Former Parent”).

The Company then converted to a corporation on July 29, 2022.

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.

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

(previously Fortress Transportation and Infrastructure Investors LLC;

“FTAI” or “Former Parent”).

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

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

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(i) Railroad, (ii) Jefferson Terminal, (iii) Repauno, (iv) Power and Gas, and (v) Sustainability and Energy Transition, which all operate in the infrastructure sector (see Note 15).

The Company is headquartered in New York, New York.

FTAI Infrastructure Spin-off

On July 11, 2022, the Former Parent announced that its board of directors unanimously approved the details and timing of a distribution and previously announced spin-off of its infrastructure business, which was contributed or merged into the Company through a series of restructuring transactions and resulted in the infrastructure business being considered as our predecessor.

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

On August 1, 2022 (the “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.”

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

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

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

The Company also entered into a management agreement with the Manager (the “Management Agreement”), with substantially the same terms as the previously held management agreement between the Former Parent and the Manager (see Note 16).

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Accordingly, Former Parent’s net investment in our operations (Net Former Parent investment) was shown in lieu of stockholders’ equity in the accompanying combined consolidated financial statements, which include the historical operations, assets, and liabilities comprising the infrastructure business of FTAI.

Prior to the Spin-off Date, the combined consolidated financial statements include certain assets and liabilities that have historically been held by the Former Parent but are specifically identifiable or otherwise attributable to FTAI Infrastructure.

All significant intercompany transactions between Former Parent and FTAI Infrastructure have been included as components of Net

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Former Parent investment in the combined consolidated financial statements, as they are to be considered effectively settled upon effectiveness of the spin-off.

All significant intercompany transactions between Former Parent and FTAI Infrastructure have been included as components of Net Former Parent investment in the combined consolidated financial statements, as they are to be considered effectively settled upon effectiveness of the spin-off.

The combined consolidated financial statements are presented as if our businesses had been combined for all periods presented.

The assets and liabilities in the combined consolidated financial statements have been reflected on a historical cost basis, as immediately prior to the spin-off, all of the assets and liabilities presented are owned by the Former Parent and are being transferred to us at a carry-over basis.

Principles of Combination —FTAI Infrastructure had elected the principles of combined consolidated financial statements as the basis of presentation for the periods through the Spin-off Date due to common ownership and management of the entities, which includes the financial results of the Railroad, Jefferson Terminal, Repauno, Power and Gas, and Sustainability and Energy Transition segments.

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

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

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

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Corporate Function —For the periods through the Spin-off Date, the combined consolidated financial statements include all revenues and costs directly attributable to FTAI Infrastructure and an allocation of certain expenses.

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

The Former Parent was externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), which performed the Former Parent’s corporate function, and incurred a variety of expenses including, but not limited to, information technology,

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

accounting, treasury, tax, legal, corporate finance and communications.

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

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

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

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

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

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

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 in which we are the primary beneficiary.

All significant intercompany transactions and balances have been eliminated.

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

generally accepted accounting principles (“U.S.

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

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We do not have significant exposure to foreign currency risk as all of our leasing and revenue arrangements are denominated in U.S.

Variable Interest Entities (“VIE”) —The assessment of whether an entity is a VIE and the determination of whether to consolidate a VIE requires judgment.

VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional

Liquidity —In performing the first step of the evaluation under ASC 205-40, management concluded that the Company’s current liquidity and forecasted cash flows from operations are not sufficient to support, in full, the repayment of Jefferson Terminal’s Taxable Series 2020B Bonds totaling $ 79.1 million that mature on January 1, 2025, the Company’s operating and capital expenditure commitments and dividend payments on Series A Preferred Stock.

In performing the second step of this assessment, the Company evaluated whether it is probable that the Company’s plans will be effectively implemented within one year after the financial statements are issued and whether it is probable that those plans will alleviate the liquidity risk raised in the first step of the evaluation.

Management has approved a plan to alleviate liquidity risk by:

(i) refinancing the Taxable Series 2020B Bonds prior to their maturity date, including contributing additional unencumbered assets as collateral;

(ii) delaying planned capital expenditures;

(iii) electing to defer payment of the management fee and expense reimbursements to the Manager;

(iv) continuing to accrue paid-in-kind dividends on its Series A Senior Preferred Stock;

and (v) eliminating future dividends on common stock, excluding the common dividend that our board of directors declared on February 29, 2024 that will be paid on April 5, 2024.

Management concluded that such plans are probable of being implemented and the Company will have sufficient liquidity to meet its obligations as they become due over the next twelve months from the date that the consolidated and combined consolidated financial statements were issued.

Management will continue to evaluate its liquidity and financial position and update future plans accordingly.

Variable Interest Entities —The assessment of whether an entity is a VIE and the determination of whether to consolidate a VIE requires judgment.

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

FTAI INFRASTRUCTURE INC.

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(Dollars in tables in thousands, unless otherwise noted)

subordinated financial support from other parties.

Delaware River Partners LLC

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Restricted Cash —Restricted cash consists of prepaid interest and principal pursuant to the requirements of certain of our debt agreements (see Note 7) and other qualifying construction projects at Jefferson Terminal.

Inventory —Commodities inventory is carried at the lower of cost or net realizable value on our balance sheet.

Commodities are removed from inventory based on the average cost at the time of sale.

We had commodities inventory of $ 3.6 million, and $ 6.8 million as of December 31, 2022 and 2021, respectively, which is included in Other current assets in the Consolidated and Combined Consolidated Balance Sheets.

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

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

Our repairs and maintenance expense were $ 13.4 million, $ 5.9 million, and $ 2.9 million during the years ended December 31, 2022, 2021 and 2020, 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

(Dollars in tables in thousands, unless otherwise noted)

Our repairs and maintenance expenses were $ 19.2 million, $ 13.4 million and $ 5.9 million during the years ended December 31, 2023, 2022 and 2021, respectively, and are included in Operating expenses in the Consolidated and Combined Consolidated Statements of Operations.

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

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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.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Management develops the assumptions used in the recoverability analysis based on its knowledge of active contracts, current and future expectations of the demand for a particular asset and historical experience, as well as information received from third party industry sources.

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 $ 3.6 million and $ 6.8 million, deposits of $ 22.8 million and $ 17.2 million, note receivable of $ 20.0 million and $ 7.5 million, prepaid expenses of $ 16.4 million and $ 17.4 million and other assets of $ 4.5 million and $ 11.9 million as of December 31, 2022 and 2021, respectively.

Other Assets —Other Assets primarily consists of a note receivable of $ 10.8 million and $ 10.0 million as of December 31, 2022 and 2021, respectively, from CarbonFree, a business that develops technologies to capture carbon dioxide from industrial emissions sources.

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

Other Current Liabilities —Other current liabilities primarily include environmental liabilities of $ 4.1 million and $ 4.1 million, and insurance premium liabilities of $ 6.2 million and $ 1.7 million as of December 31, 2022 and 2021, respectively.

Other Current Assets —Other current assets is primarily comprised of commodities inventory of $ 0.3 million and $ 3.6 million, deposits of $ — million and $ 22.8 million, note receivable of $ 21.4 million and $ 20.0 million, prepaid expenses of $ 8.9 million and $ 16.4 million, other receivables of $ 5.7 million and $ — million and other assets of $ 5.7 million and $ 4.5 million as of December 31, 2023 and 2022, respectively.

Other Assets —Other assets consists of a note receivable of $ 11.7 million and $ 10.8 million as of December 31, 2023 and 2022, respectively, from CarbonFree, a business that develops technologies to capture carbon dioxide from industrial emissions sources.

We elected the fair value option for this note receivable to better align the reported results with the underlying changes in the value of this note receivable.

The Company records interest income, which is included in Other income (expense), on this note receivable using the contractual interest rate.

Other assets also consists of capitalized contract costs of $ 17.6 million and $ — million as of December 31, 2023 and 2022.

Other Current Liabilities —Other current liabilities primarily include environmental liabilities of $ 0.5 million and $ 4.1 million, insurance premium liabilities of $ 3.2 million and $ 6.2 million, and deferred revenue of $ 5.8 million and $ 3.3 million as of December 31, 2023 and 2022, respectively.

During the year ended December 31, 2023, the Company recognized revenue of $ 1.3 million that was included in the deferred revenue balance at the beginning of the year.

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.

As of December 31, 2023, 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 December 31, 2021, the carrying amount of goodwill within the Jefferson Terminal, Railroad and Corporate and Other segments was $ 122.7 million, $ 134.4 million, and $ — , respectively.

As of December 31, 2022, 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.

During 2023, an immaterial adjustment was recorded to the goodwill and property, plant and equipment balances of the Railroad segment.

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

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If the estimated fair value of the reporting unit is less than the carrying amount, a goodwill impairment is recorded to the extent that the carrying value of the reporting unit exceeds the fair value.

As of October 1, 2022, we elected to complete a qualitative impairment assessment of the goodwill related to our Railroad reporting unit and concluded that it was more likely than not that the fair value of the Railroad reporting unit exceeded its carrying value.

As of October 1, 2023, we elected to complete a qualitative impairment assessment of the goodwill related to our Transtar and FYX reporting units and concluded that it was more likely than not that the fair value of the Transtar and FYX reporting units exceeded their respective carrying values.

Therefore, no quantitative impairment evaluation was completed.

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We estimate the fair value of Jefferson Terminal using an income approach, specifically a discounted cash flow analysis.

This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, EBITDA margins and discount rates.

This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, EBITDA margins, capital expenditures and discount rates.

The estimates and assumptions used consider historical performance if indicative of future performance and are consistent with the assumptions used in determining future profit plans for the reporting units.

In connection with our impairment analysis, although we believe the estimates of fair value are reasonable, the determination of certain valuation inputs is subject to management's judgment.

Changes in these inputs, including as a result of events beyond our control, could materially affect the results of the impairment review.

If the forecasted cash flows or other key inputs are

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In connection with our impairment analysis, although we believe the estimates of fair value are reasonable, the determination of certain valuation inputs is subject to management's judgment.

Changes in these inputs, including as a result of events beyond our control, could materially affect the results of the impairment review.

If the forecasted cash flows or other key inputs are negatively revised in the future, the estimated fair value of the reporting unit could be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results.

negatively revised in the future, the estimated fair value of the reporting unit could be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results.

The Jefferson Terminal reporting unit had an estimated fair value that exceeded its carrying value by more than 10% but less than 20% as of October 1, 2023.

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

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

At October 1, 2023, approximately 6.2 million barrels of storage was operational.

Our discount rate for our 2023 goodwill impairment analysis was 10.3 % and our assumed terminal growth rate was 2.5 %.

If our strategy changes from planned capacity downward due to an inability to source contracts or expand volumes, the fair value of the reporting unit would be negatively affected, which could lead to an impairment.

The expansion of refineries in the Beaumont/Port Arthur area, as well as growing crude oil production in the U.S.

The expansion of refineries in the Beaumont/Port Arthur area, as well as growing crude oil and natural gas production in the U.S.

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

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

In December 2022, our multi-year refined products contract with Exxon Mobil Oil Corporation began.

Although certain of our anticipated contracts or expected volumes from existing contracts for Jefferson Terminal have been delayed, we continue to believe our projections are achievable.

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

Due to the acquisition of additional interests in FYX in 2022, the estimated fair value of that business within the Corporate and Other segment approximates the book value.

There were no impairments of goodwill for the years ended December 31, 2023, 2022, and 2021.

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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 148 months as of December 31, 2022.

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

The weighted-average remaining amortization period for customer relationships was 144 months and 148 months as of December 31, 2023 and 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.

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

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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 $ 30.9 million and $ 21.5 million as of December 31, 2022 and 2021, respectively, are included in Debt, net in the Consolidated and Combined Consolidated Balance Sheets.

Unamortized deferred financing costs of $ 31.3 million and $ 30.9 million as of December 31, 2023 and 2022, respectively, are included in Debt, net in the Consolidated Balance Sheets.

Amortization expense was $ 6.8 million, $ 4.4 million and $ 2.6 million for the years ended December 31, 2023, 2022 and 2021, respectively, and is included in Interest expense in the Consolidated and Combined Consolidated Statements of Operations.

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

Interline revenues are recognized as the transportation

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movements occur.

Interline revenues are recognized as the transportation movements occur.

Our ancillary services revenue primarily relates to demurrage and storage services.

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

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NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

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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.

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Additionally, other revenue includes revenue related to derivative trading activities.

See Commodity Derivatives below for additional information.

Payment terms for revenues are generally short term in nature.

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

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

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

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

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

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We have elected to combine lease and non-lease components for all lease contracts where we are the lessee.

Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets, and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred.

Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets and lease liabilities;

and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred.

Concentration of Credit Risk —We are subject to concentrations of credit risk with respect to amounts due from customers.

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

We earned approximately 10 %, 15 % and 40 % of our consolidated revenue from one customer in the Jefferson Terminal segment during the years ended December 31, 2022, 2021 and 2020, respectively, and 51 % and 45 % from one customer in the Railroad segment during the years ended December 31, 2022 and 2021, respectively.

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

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

We earned approximately 12 %, 10 % and 15 % of our consolidated revenue from one customer within the Jefferson Terminal segment during the years ended December 31, 2023, 2022 and 2021, respectively, and 51 %, 51 % and 45 % from one customer within the Railroad segment during the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 56 % of total accounts receivable, net.

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

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

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We also consider current and future economic conditions over the expected lives of the receivables, the amount of receivables in dispute, and the current receivables aging.

During the year ended December 31, 2023, the Company recorded bad debt expense of $ 2.2 million, which is included in Operating expenses, relating to one customer in the Corporate and Other segment.

Expense Recognition —Expenses are recognized on an accrual basis as incurred.

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 loss represents net loss, as presented in the Consolidated and Combined

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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 Loss —Comprehensive 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 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 related to cash flow hedges of our equity method investees and pension and other employee benefit accounts.

Consolidated Statements of Operations, adjusted for fair value changes recorded in other comprehensive loss related to cash flow hedges of our equity method investees and pension and other employee benefit accounts.

Derivative Financial Instruments

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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 loss related to equity method investees in our Consolidated and Combined Consolidated Statements of Comprehensive Loss and recorded in Accumulated other comprehensive loss in our Consolidated and Combined Consolidated Balance Sheets.

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

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Our share of the change in fair value of these contracts is recognized in Equity in 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.

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

The cash flow impact of derivative contracts that are not designated as hedging instruments is recognized in Equity in losses 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.

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

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

Interest and penalties on uncertain tax positions are included as a component of the Provision for (benefit from) income taxes in the Consolidated and Combined Consolidated Statements of Operations.

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

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

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

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NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

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

Lessors—Certain Leases with Variable Lease Payments .

This ASU requires lessors to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if (i) the lease would have been classified as a sales-type lease or a direct financing lease under Topic 842 and (ii) the lessor would have otherwise recognized a day-one loss.

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

We adopted this guidance in the first quarter of 2022, and it did not have a material impact on our consolidated and combined consolidated financial statements.

ACQUISITION OF TRANSTAR, LLC

On July 28, 2021, we completed the acquisition for 100 % of the equity interests of Transtar, LLC (“Transtar”) from United States Steel Corporation (“USS”) for total cash consideration of $ 636.0 million.

Transtar is comprised of five freight railroads and one switching company, of which two railroads are connected to USS’s largest production facilities.

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

Transtar operates within the Railroad reportable segment.

See Note 17 for additional information.

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

In connection with the acquisition, we recorded $ 9.8 million of acquisition and transaction expense during the year ended December 31, 2021.

The Former Parent funded the transaction with bridge loans in an aggregate principal amount of $ 650.0 million.

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

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

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

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

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

Fair value of assets acquired:

Cash and cash equivalents $ 8,918

Accounts receivable 18,625

Operating lease right-of-use assets 12,231

Property, plant and equipment 487,946

Intangible assets 60,000

Other assets 17,052

Total assets 604,772

Fair value of liabilities assumed:

Accounts payable and accrued liabilities 47,010

Operating lease liabilities 10,689

Pension and other postretirement benefits (1)

Other liabilities 8,487

Total liabilities 100,884

Total purchase consideration $ 636,009

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

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

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

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

Estimated useful life in years Fair value

Customer relationships 15

Refer to Note 12 for additional discussion on the pension and postretirement benefit plans.

Recent Accounting Pronouncements —In August 2023, the FASB issued ASU 2023-05, Business Combination – Joint Venture Formations.

This ASU is intended to address the accounting for contributions made to a joint venture and requires joint ventures to measure all assets and liabilities at fair value upon formation.

This standard is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted.

We adopted this guidance in the fourth quarter of 2023, and it did not have a material impact on our consolidated and combined consolidated financial statements.

Unadopted Accounting Pronouncements —In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

This ASU incorporates certain Securities and Exchange Commission (“SEC”) disclosure requirements related to various subtopics into the FASB Accounting Standards Codification.

This standard is effective for each subtopic amendment on the date that the SEC removes

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

Estimated remaining useful life in years Fair value

Railcars 1 - 40

Track and track related assets 1 - 40

Land, site improvements and rights N/A 87,450

Bridges and tunnels 15 - 55

Buildings and improvements 3 - 25

Railroad equipment 2 - 15

Terminal machinery and equipment 2 - 15

Vehicles 2 - 5

Construction in progress N/A 1,928

Computer hardware and software 2 - 5

Total $ 487,946

The unaudited financial information in the table below summarizes the combined results of operations of FTAI Infrastructure and Transtar on a pro forma basis, as though the companies had been combined as of January 1, 2020.

These pro forma results were based on estimates and assumptions which we believe are reasonable.

The pro forma adjustments are primarily comprised of the following:

• The allocation of the purchase price and related adjustments, including adjustments to depreciation and amortization expense related to the fair value of property, plant and equipment and intangible assets acquired;

• The exclusion of acquisition-related costs incurred during the year ended December 31, 2021 and allocation of substantially all acquisition-related costs to the year ended December 31, 2020;

• Associated tax-related impacts of adjustments.

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

Year Ended December 31,

Total revenue $ 199,762 $ 183,744

Net loss attributable to Former Parent $ ( 56,717 ) $ ( 39,349 )

LEASING EQUIPMENT, NET

the related disclosure requirement from Regulation S-X or Regulation S-K, with early adoption prohibited.

If the SEC has not removed the requirements by June 30, 2027, this pending amendment will be removed from the Codification and will not become effective for any entity.

We do not expect the adoption of this guidance to have a material impact on our consolidated and combined consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures.

This ASU will require entities to provide additional disclosures around significant segment expenses that are regularly provided to the chief operating decision maker, as well as an amount and description of its composition of other segment items.

This standard is effective retrospectively for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently assessing the impact this guidance will have on our consolidated and combined consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures.

This ASU enhances the transparency and decision usefulness of income tax disclosures by expanding the disclosures of an entity’s income tax rate reconciliation and disaggregation of income taxes paid and income tax expense.

This standard is effective prospectively for all public entities for annual periods beginning after December 15, 2024, with early adoption and retrospective application permitted.

We are currently assessing the impact this guidance will have on our consolidated and combined consolidated financial statements and related disclosures.

LEASING EQUIPMENT, NET AND PROPERTY

Leasing equipment, net is summarized as follows:

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Depreciation expense for leasing equipment $ 1,148 $ 1,105 $ 1,103

Sales-Type Leases

In December 2023, Jefferson Terminal entered into an agreement to lease land to an entity controlled by an affiliate of the Manager.

The lease is initially for a two-year construction period and eight years post-completion with renewals that extend the lease up to 32 years.

We expect all renewals to be exercised as the cost to remove the assets will be significant.

We determined that the lease is a sales-type lease as the present value of the lease payments is substantially all of fair value.

Lease payments will increase based on an inflation escalator and be treated as variable lease payments as they occur.

At lease commencement, we recorded $ 6.6 million of gain on sales-type lease which is recorded in Gain (loss) on sale of assets in the Consolidated and Combined Consolidated Statements of Operations during the year ended December 31, 2023.

We also recorded $ 0.1 million of interest income which is included in Revenues in the Consolidated and Combined Consolidated Statements of Operations during the year ended December 31, 2023.

As of December 31, 2023, we recorded $ 7.9 million of lease receivable and $ 0.6 million of unguaranteed residual value which are included in Other assets on the Consolidated Balance Sheets, as well as $ 0.8 million of short-term lease receivable which is included in Other current assets on the Consolidated Balance Sheets.

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The following table presents future minimum lease payments under the sales-type lease as of December 31, 2023:

Thereafter 21,060

Total undiscounted lease payments 24,960

Imputed interest 16,222

Total lease receivable

PROPERTY, PLANT AND EQUIPMENT, NET

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Property, plant and equipment, net $ 1,630,829 $ 1,673,808

We had net additions of property, plant and equipment of $ 218.2 million and $ 624.9 million during the years ended December 31, 2022 and 2021, respectively, which primarily consisted of terminal machinery and equipment placed in service or under development at Jefferson Terminal and assets acquired in our acquisition of Transtar in 2021.

Depreciation expense for property, plant and equipment was $ 62.1 million, $ 47.6 million, and $ 26.5 million during the years ended December 31, 2022, 2021 and 2020, respectively.

We had net additions of property, plant and equipment of $ 27.3 million and $ 218.2 million during the years ended December 31, 2023 and 2022, respectively, which primarily consisted of terminal machinery and equipment placed in service or under development at Jefferson Terminal and the $ 5.0 million purchase of track and bridges by Transtar from Long Ridge Energy and Power LLC, our equity method investment, in October 2023.

Long Ridge Energy and Power LLC recorded a $ 2.2 million gain on sale of assets, which was eliminated upon equity pick-up (see Note 5).

Depreciation expense for property, plant and equipment was $ 72.3 million, $ 62.1 million, and $ 47.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

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

Carrying Value

Investment Ownership Percentage December 31, 2023 December 31, 2022

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Equity method 50 % — —

FYX Trust Holdco LLC (2)

Equity at December 31, 2021 66 % and 14 % as of December 31, 2022 and December 31, 2021, respectively

Long Ridge West Virginia LLC Equity method 50 % 6,825 —

GM-FTAI Holdco LLC Equity method See below 55,740 68,025

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(1) The carrying value of $ 187.2 million and $ 17.5 million as of December 31, 2022 and 2021, respectively, is included in Other Liabilities in the Consolidated and Combined Consolidated Balance Sheets.

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

(1) The carrying value of $( 29.3 ) million and $( 187.2 ) million as of December 31, 2023 and 2022, respectively, is included in Other liabilities in the Consolidated Balance Sheets.

We did not recognize any other-than-temporary impairments for the years ended December 31, 2023, 2022 or 2021.

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NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Year Ended December 31,

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Intermodal Finance I, Ltd.

$ 56 $ 151 $ 470

Long Ridge Energy & Power LLC ( 9,556 ) ( 60,538 ) ( 13,597 )

Long Ridge West Virginia LLC ( 393 ) — —

GM-FTAI Holdco LLC ( 12,285 ) ( 5,571 ) ( 205 )

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Long Ridge Energy & Power LLC

On June 16, 2017, we, through Ohio River Partners Shareholders LLC (“ORP”), a consolidated subsidiary, purchased the assets of Long Ridge Energy & Power LLC (“Long Ridge”), which consisted primarily of land, buildings, railroad track, docks, water rights, site improvements and other rights.

Long Ridge was being developed as a 485-megawatt natural gas fired, combined cycle power plant, which was completed and became operational in October 2021.

Long Ridge also entered into cash flow hedges related to power generation capacity, as described in Note 2.

In December 2019, ORP contributed its equity interests in Long Ridge into Long Ridge Energy & Power LLC and sold a 49.9 % interest (the “Long Ridge Transaction”) for $ 150.0 million in cash, plus an earn out.

We recognized a gain of $ 116.7 million in relation to the Long Ridge Transaction.

In December 2019, Ohio River Shareholder LLC (“ORP”), a wholly owned subsidiary, contributed its equity interests in Long Ridge into Long Ridge Energy & Power LLC and sold a 49.9 % interest (the “Long Ridge Transaction”) for $ 150.0 million in cash, plus an earn out.

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.

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

The initial equity method investment balance was $ 155.6 million at the date of deconsolidation and represented the fair value of our 50.1 % ownership.

In addition to our equity method investment, in October 2022 we entered into a shareholder loan agreement maturing on October 15, 2023 and accruing PIK interest at a 16 % rate.

As of December 31, 2022 the balance of the note receivable was $ 27.5 million recorded as part of the Long Ridge investment in Other liabilities on the Consolidated and Combined Consolidated Balance Sheet.

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

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.

During 2023, the maturity date was extended to May 1, 2032.

The Company made an additional $ 36.0 million of investment in Long Ridge as part of the shareholder loan agreement during the year ended December 31, 2023.

As of December 31, 2023 the balance of the note receivable was $ 71.0 million recorded as part of the Long Ridge investment in Other liabilities on the Consolidated Balance Sheet.

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

Balance Sheet 2023 2022

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Total expenses 171,988 166,487 64,151

Other expense ( 4,577 ) ( 44,302 ) ( 1,967 )

Other income (expense)

801 ( 4,577 ) ( 44,302 )

Loss before income taxes ( 16,897 ) ( 120,834 ) ( 22,815 )

Provision for income taxes — — —

Net Loss $ ( 120,834 ) $ ( 22,815 ) $ ( 6,430 )

GM-FTAI Holdco LLC

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

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

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

$ ( 16,897 ) $ ( 120,834 ) $ ( 22,815 )

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GM-FTAI Holdco LLC

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

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

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

Aleon plans to develop a lithium-ion battery recycling business across the United States.

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On June 15, 2022, we exchanged our Class B shares which gave us economic interest in Aleon for an additional 20 % interest in Class A shares.

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

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

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

Clean Planet Energy USA LLC

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

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

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

The plants will convert various grades of non-recyclable waste plastic to renewable diesel in the form of jet fuel, diesel, naphtha, and low sulfur fuel oil.

We account for our investment in Clean Planet USA as an equity method investment as we have significant influence through our ownership of Class A shares.

Equity Investment

We account for our investment in CPE as an equity method investment as we have significant influence through our ownership of Class A shares.

Long Ridge West Virginia LLC

In November 2023, we sold a 49.9 % interest in Long Ridge West Virginia LLC (“Long Ridge WV”), previously a wholly owned subsidiary, for $ 7.5 million in cash.

Long Ridge WV is a VIE as defined in U.S.

GAAP, but we are not the primary beneficiary.

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 account for this investment in accordance with the equity method.

Long Ridge WV was formed to build an energy generating property in West Virginia similar to that of Long Ridge Energy and Power LLC.

On the deconsolidation, no gain was recorded as all the assets consist of unproved undeveloped gas properties.

We recorded our investment in the legal entity at the cost basis of $ 7.2 million as of November 17, 2023.

Equity Investments

FYX Trust Holdco LLC

In July 2020, we invested $ 1.3 million for a 14 % interest in an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.

FYX Trust Holdco LLC (“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 roadside repair services.

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

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

In May 2022, FTAI purchased an additional 51 % interest in FYX from an unrelated third party for a purchase price of $ 4.6 million, which resulted in a 66 % ownership and majority stake in the entity.

At the purchase date, assets of FYX were $ 13.7 million, including cash of $ 0.7 million, liabilities were $ 10.1 million, and goodwill of $ 5.4 million was recorded.

Since acquisition, we have recorded total revenue from FYX of $ 47.9 million and net loss from FYX of $ 1.4 million.

At December 31, 2022, $ 3.7 million is recorded as non-controlling interest for the interest held by other parties.

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.

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

INTANGIBLE ASSETS, NET

Our intangible assets, net are summarized as follows:

I ntangible assets, net are summarized as follows:

December 31, 2023

8 unchanged sentences

Total intangible assets, net $ 5,922 $ 54,273 $ 60,195

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Amortization of intangible assets is recorded as follows:

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

Classification in Consolidated and Combined Consolidated Statements of Operations Year Ended December 31,

4 unchanged sentences

Total $ 52,621

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Our debt, net is summarized as follows:

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(i) Base Rate + 2.75 %;

(ii) Base Rate + 3.75 % (Eurodollar)

(ii) Base Rate + 3.75 % (Term SOFR)

11/5/26 $ 44,250 $ 25,000

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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 $ 25,172 at December 31, 2022.

(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 $ 24,819 and $25,172 at December 31, 2023 and 2022, respectively.

DRP Revolver —On November 5, 2018, our subsidiary entered into a revolving credit facility (the “DRP Revolver”) that provides for revolving loans in the aggregate amount of $ 25.0 million.

The DRP Revolver is secured by the capital stock of certain of our direct subsidiaries as defined in the related credit agreement.

On November 5, 2021, we entered into an amendment to the DRP Revolver, which extends the maturity date under the DRP Revolver to November 5, 2024.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

On November 5, 2021, we entered into an amendment to the DRP Revolver, which extended the maturity date under the DRP Revolver to November 5, 2024.

On December 22, 2023, we entered into a second amendment to the DRP Revolver which increased the aggregate revolving facility by $ 25.0 million from $ 25.0 million to $ 50.0 million and extended the maturity date under the DRP Revolver to November 5, 2026.

The DRP Revolver includes financial covenants requiring the maintenance of (i) consolidated cash balance of at least $ 3.0 million at each quarter end date, and (ii) consolidated tangible net worth of at least $ 180.0 million at each quarter end date in 2022, $ 190.0 million in 2023, and $ 200.0 million thereafter.

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The maximum aggregate principal amount available under the EB-5 Loan Agreement is $ 61.2 million, of which $ 26.1 million was available under the first tranche and $ 35.1 million was available under the second tranche.

The loans mature in 5 years from the funding of each individual tranche with an option to extend the maturity for both tranches by two one-year periods.

The loans mature in five years from the funding of each individual tranche with an option to extend the maturity for both tranches by two one-year periods.

If the option to extend the maturity is exercised, the interest rate will increase to 6.25 % from 5.75 % for the extension period.

On November 16, 2022, Jefferson Terminal entered into a new EB-5 loan agreement (“EB-5.3 Loan Agreement”) with substantially the same terms as the original agreement discussed above.

On March 11, 2022, Jefferson Terminal entered into a new EB-5 loan agreement (“EB-5.2 Loan Agreement”).

This loan was issued with substantially the same terms as the EB-5 Loan Agreement discussed above and matures in four years from the funding date.

The maximum aggregate principal amount available under the EB-5.2 Loan Agreement is $ 9.7 million.

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

The Transtar Revolver is guaranteed by the Company and certain subsidiaries of Transtar including a pledge of substantially all of their respective assets.

The Transtar Revolver includes financial covenants requiring the maintenance of (i) a consolidated maximum ratio of total leverage of 3.00 to 1.00 per the terms of the credit agreement and (ii) a consolidated minimum fixed charge coverage ratio of 1.20 to 1.00 per the terms of the credit agreement.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

On November 16, 2022, Jefferson Terminal entered into a new EB-5 loan agreement (“EB-5.3 Loan Agreement”).

This loan was issued with substantially the same terms as the EB-5 Loan Agreement discussed above and matures in five years from the funding date.

The maximum aggregate principal amount available under the EB-5.3 Loan Agreement is $ 28.0 million.

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.

The Transtar Revolver was guaranteed by the Company and certain subsidiaries of Transtar including a pledge of substantially all of their respective assets.

The Transtar Revolver included financial covenants requiring the maintenance of (i) a consolidated maximum ratio of total leverage of 3.00 to 1.00 per the terms of the credit agreement and (ii) a consolidated minimum fixed charge coverage ratio of 1.20 to 1.00 per the terms of the credit agreement.

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 in the Consolidated and Combined Consolidated Statements of Operations during the year ended December 31, 2023 .

Series 2020 Bonds —On February 11, 2020, Jefferson Terminal issued Series 2020 Bonds in an aggregate principal amount of $ 264.0 million (“Jefferson Refinancing”).

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Jefferson Terminal used a portion of the net proceeds from this offering to refund, redeem and defease certain indebtedness, and used a portion of the net proceeds to pay for or reimburse the cost of development, construction and acquisition of certain facilities, to fund certain reserve and funded interest accounts related to the Series 2020 Bonds, and to pay for or reimburse certain costs of issuance of the Series 2020 Bonds.

Jefferson Terminal recognized a loss on extinguishment of debt of $ 4.7 million as a result of this transaction during the year ended December 31, 2020.

Series 2021 Bonds —On August 18, 2021, Jefferson Terminal issued $ 425.0 million aggregate principal amount of Series 2021 Bonds, which are designated as $ 225.0 million of Series 2021A Dock and Wharf Facility Revenue Bonds (the “Series 2021A Bonds”) and $ 200.0 million of Series 2021B Taxable Facility Revenue Bonds (the “Taxable Series 2021B Bonds”).

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The Taxable Series 2021B Bonds will mature on January 1, 2028, and bear interest at a fixed rate of 4.100 % per annum.

Jefferson Terminal intends to use a portion of the net proceeds to pay for or reimburse the cost of development, construction and acquisition of certain facilities.

Jefferson Terminal has used a portion of the net proceeds to pay for or reimburse the cost of development, construction and acquisition of certain facilities.

Credit Agreement

On May 18, 2023, we entered into a credit agreement, which provided 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.

Senior Notes due 2027 —In connection with the spin-off, we issued $ 500.0 million aggregate principal amount of Senior Notes due 2027 (the “2027 Notes”).

The 2027 Notes bear interest at a rate of 10.500 % per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2022.

The 2027 Notes were issued at an issue price equal

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

The 2027 Notes are guaranteed by the Company and the subsidiaries of Transtar including a pledge of substantially all of their respective assets.

FTAI INFRASTRUCTURE INC.

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(Dollars in tables in thousands, unless otherwise noted)

The 2027 Notes are guaranteed by the Company and the subsidiaries of Transtar including a pledge of substantially all of their respective assets.

We were in compliance with all debt covenants as of December 31, 2022 and 2021.

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 December 31, 2023.

As of December 31, 2023, scheduled principal repayments under our debt agreements for the next five years and thereafter are summarized as follows:

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Series 2021 Bonds — — 9,025 4,750 205,415 205,810 425,000

Transtar Revolver — — 10,000 — — — 10,000

Senior Notes due 2027 — — — 600,000 — — 600,000

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Restricted cash 58,112 58,112 — — Market

Derivative assets 1,125 — 1,125 — Income

Notes receivable 11,664 — 11,664 — Market

Total assets $ 99,143 $ 87,479 $ 11,664 $ —

4 unchanged sentences

Restricted cash 113,156 113,156 — — Market

Notes receivable 10,800 — 10,800 — Market

Derivative assets 1,125 — 1,125 — Income

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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, and loans 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 and Combined Consolidated Balance Sheets are presented in the table below:

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

Series 2020 A Bonds (1)

6 unchanged sentences

165,208 163,238

2027 Notes 498,035 —

Senior Notes due 2027

625,038 498,035

EB-5 Loan Agreement 21,240 19,261

EB-5.2 Loan Agreement 8,183 7,540

EB-5.3 Loan Agreement 22,491 19,877

______________________________________________________________________________________

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

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

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.

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

DERIVATIVE FINANCIAL INSTRUMENTS

Depending on market conditions, Repauno enters into forward purchase and sales contracts for butane.

These derivatives are short-term in nature and are used for trading purposes and classified as Level 2 derivatives.

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

Notional Amount (Barrel of butane (“BBL”) in thousands)

Fair Value of Assets (1)

$ 1,125 $ 2,220

Term 3 months

1 to 3 months

________________________________________________________

(1) Included in Other current assets in the Consolidated and Combined Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021.

There were no transfers into or out of Level 3 during the periods presented.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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Terminal services revenues — 59,011 563 — — — 59,574

Roadside services revenues — — — — — 47,899 47,899

Other revenue — — 3,468 — — — 3,468

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Terminal services revenues — 44,664 374 — — — 45,038

Crude marketing revenues — 8,210 — — — — 8,210

Other revenue — — 11,243 — — — 11,243

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

Operating Leases

Total $ 1,584

As of December 31, 2023, we recorded capitalized contract cost of $ 19.8 million, of which $ 2.2 million is included in Other current assets and $ 17.6 million is included in Other assets on the Consolidated Balance Sheets.

Capitalized contract cost is amortized using the straight-line method, over the expected contract term.

We recorded $ 0.5 million of amortization which is included in Operating expenses in the Consolidated and Combined Consolidated Statements of Operations during the year ended December 31, 2023.

We have commitments as lessees under lease agreements primarily for real estate, equipment and vehicles.

Our leases have remaining lease terms ranging from approximately one month to 39.5 years.

Our leases have remaining lease terms ranging from approximately four months to 38.5 years.

The following table presents lease related costs:

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Weighted average incremental borrowing rate 5.7 % 5.7 %

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following table presents supplemental cash flow information for the years ended December 31, 2023, 2022, and 2021:

2 unchanged sentences

Noncash - ROU assets recorded for new and modified leases 2,828 2,640 12,228

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following table presents future minimum lease payments under non-cancellable operating leases as of December 31, 2023:

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EQUITY-BASED COMPENSATION

On August 1, 2022, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to award 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 December 31, 2022, 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 is reported within operating expenses and general and administrative in the Consolidated and Combined Consolidated Statement of Operations.

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

Year Ended December 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met as of December 31, 2022

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 December 31, 2023, the Incentive Plan provides for the issuance of up to 30.0 million shar es.

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

Subsidiary Stock-Based Compensation

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

Year Ended December 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

2023 2022 2021

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Total $ 2,761 $ 4,146 $ 4,038 $ 2,094

The following tables present information for our stock options, restricted shares of our subsidiary and common units of our subsidiary:

Stock Options Restricted Shares Common Units

Options Weighted Average Exercise Price Shares Weighted Average Issuance Price Units Weighted Average Issuance Price

Restricted Stock Units to Subsidiary Employees

During the year ended December 31, 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 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 recognized in the Consolidated and Combined Consolidated Statements of Operations:

Expense Recognized During the Year Ended December 31,

Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

2023 2022 2021

Restricted Stock Units $ 6,268 $ — $ — $ 7,335 0.8

Total $ 6,268 $ — $ — $ 7,335

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following tables present information for our stock options, restricted shares of our subsidiary, common units of our subsidiary and restricted stock units to subsidiary employees:

Stock Options Restricted Shares Common Units Restricted Stock Units

Options Weighted Average Exercise Price Shares Weighted Average Issuance Price Units Weighted Average Issuance Price Units Weighted Average Issuance Price

Outstanding as of

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16,542,751 — 2,047,101 3,199,087

Stock Options Restricted Shares Common Units

Stock Options Restricted Shares Common Units Restricted Stock Units

As of December 31, 2023:

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Aggregate intrinsic value (in thousands) $ 18,765 $ — $ 2,371 $ 11,229

Weighted average remaining contractual term 9.0 years 0.5 years 1.2 years

Weighted average remaining contractual term 8.1 years 0.0 years 1.1 years 0.8 years

During the year ended December 31, 2023, certain of the Manager’s employees exercised 25,998 options at a weighted average exercise price of $ 2.09 and received a net 17,903 shares of our common stock.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Stock Options

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The following table presents information related to the options to purchase our common stock:

December 31, 2022

Number of options 10,869,565

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Number of time steps The number of time steps between the valuation and expiration dates.

During the year ended December 31, 2023, the Manager transferred 2,173,914 of its op tions to certain employees of the Manager.

Restricted Shares

We issued restricted shares of our subsidiary to certain employees during the years ended December 31, 2021 and 2020, that had grant date fair values of $ 5.6 million and $ 4.0 million, respectively, and generally vest over three years.

We did not issue any restricted shares during the year ended December 31, 2022.

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

We issued restricted shares of our subsidiary to certain employees during the year ended December 31, 2021 that had a grant date fair value of $ 5.6 million, and generally vest over three years .

We did not issue any restricted shares during the years ended December 31, 2022 and December 31, 2023.

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

The fair value of these awards was based on the fair value of the operating subsidiary on each grant date, which was estimated using a discounted cash flow analysis that requires the application of discount factors and terminal multiples to projected cash flows.

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

We issued 1,900,000 , 1,052,632 , and 1,883,772 common units of our subsidiaries to certain employees for the years ended December 31, 2022, 2021 and 2020, respectively, that had grant date fair values of $ 1.9 million, $ 1.2 million, and $ 2.1 million, respectively, and vest over three years .

The grant for restricted stock units to subsidiary employees fully canceled and replaced these vested and unvested restricted shares of our subsidiary issued in the first quarter of 2021.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

We issued 1,243,089 and 1,900,000 common units of our subsidiaries to certain employees for the years ended December 31, 2023 and 2022, respectively, that had grant date fair values of $ 1.6 million and $ 1.9 million, respectively, and vest over three years .

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

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

Director Compensation

During the year ended December 31, 2023, we issued 46,509 shares of common stock to certain directors as compensation.

RETIREMENT BENEFIT PLANS

In connection with the acquisition of Transtar (see Note 3), we established a defined benefit pension plan as well as a postretirement benefit plan to assume certain retirement benefit obligations related to eligible Transtar employees.

We established a defined benefit pension plan as well as a postretirement benefit plan to assume certain retirement benefit obligations related to eligible Transtar employees.

Defined Benefit Pensions

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The following table summarizes the changes in our projected benefit obligation and plan assets as of December 31, 2023 and 2022.

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

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

Year Ended December 31,

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Funded status at end of year $ ( 9,094 ) $ ( 32,604 ) $ ( 7,221 ) $ ( 28,523 )

As of December 31, 2022 and 2021, the following amounts were recognized in the Consolidated and Combined Consolidated Balance Sheets:

As of December 31, 2023 and 2022, the following amounts were recognized in the Consolidated Balance Sheets:

Year Ended December 31,

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Net amounts recognized at end of period $ 9,094 $ 32,604 $ 7,221 $ 28,523

Our retirement plan costs for the years ended December 31, 2022 and 2021 were $ 2.1 million and $ 0.8 million for pension benefits and $ 3.1 million and $ 1.2 million for postretirement benefits, respectively.

The following table summarizes the components of net periodic pension cost and other amounts recognized in other comprehensive loss for the years ended December 31, 2022 and 2021:

Our retirement plan costs for the years ended December 31, 2023, 2022 and 2021 were $ 1.9 million, $ 2.1 million and $ 0.8 million for pension benefits and $ 3.4 million, $ 3.1 million and $ 1.2 million for postretirement benefits, respectively.

The following table summarizes the components of net periodic pension cost and other amounts recognized in Other comprehensive income (loss) in the Consolidated and Combined Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023 and 2022:

Year Ended December 31,

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

Prior service cost (credit) $ — $ — $ — $ —

Amortization of prior service (cost) credit — 1,470 — —

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

Prior service cost $ — $ — $ — $ 1,470 $ — $ —

Amortization of prior service cost — ( 159 ) — — — —

Actuarial loss (gain) 1,432 893 ( 2,814 ) ( 3,065 ) ( 20 ) 334

Amortization of actuarial (loss) gain — — — —

Total recognized in other comprehensive loss $ ( 2,814 ) $ ( 1,595 ) $ ( 20 ) $ 334

Amortization of actuarial gain 61 — — — — —

Total recognized in other comprehensive loss (income) $ 1,493 $ 734 $ ( 2,814 ) $ ( 1,595 ) $ ( 20 ) $ 334

Weighted-average assumptions used to determine the estimated benefit obligation and period costs as of and for the year ended December 31, 2023 and 2022 are as follows:

Year Ended December 31,

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

Weighted-average assumptions used to determine pension benefit obligation:

Discount rate 5.06 % 5.06 % 5.31 % 5.29 % 3.02 % 3.00 %

Rate of compensation increase 3.50 % N/A 3.50 % N/A

Initial healthcare cost trend rate N/A 5.80 % N/A 10 % pre-Med;

Ultimate healthcare cost trend rate N/A 3.94 % N/A 3.94 %

Year ultimate healthcare cost trend rate is reached N/A 2075 N/A 2075

Rate of compensation increase 3.50 % N/A 3.50 % N/A 3.50 % N/A

Initial healthcare cost trend rate N/A 7.50 % N/A 5.80 % N/A 10 % pre-Med;

Ultimate healthcare cost trend rate N/A 4.04 % N/A 3.94 % N/A 3.94 %

Year ultimate healthcare cost trend rate is reached N/A 2075 N/A 2075 N/A 2075

Weighted-average assumptions used to determine net periodic pension and postretirement costs:

Discount rate 5.31 % 5.29 % 3.02 % 3.00 % 2.88 % 2.86 %

Rate of compensation increases 3.50 % N/A 3.50 % N/A

Average future working lifetime 11.01 years 11.32 years 10.93 years 11.34 years

Initial healthcare cost trend rate N/A 6.00 % N/A 6.00 %

Ultimate healthcare cost trend rate N/A 3.94 % N/A 3.80 %

Year ultimate healthcare cost trend rate is reached N/A 2075 N/A 2075

Rate of compensation increases 3.50 % N/A 3.50 % N/A 3.50 % N/A

Average future working lifetime 10.50 years 9.24 years 11.01 years 11.32 years 10.93 years 11.34 years

Initial healthcare cost trend rate N/A 5.80 % N/A 6.00 % N/A 6.00 %

Ultimate healthcare cost trend rate N/A 3.94 % N/A 3.94 % N/A 3.80 %

Year ultimate healthcare cost trend rate is reached N/A 2075 N/A 2075 N/A 2075

The following benefit payments, which reflect expected future service and compensation increases, as appropriate, are expected to be made from the Transtar defined benefit plans:

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2027 905 1,319

2028 1,089 1,580

Years 2029-2033 7,191 10,252

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(Dollars in tables in thousands, unless otherwise noted)

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

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

Year Ended December 31,

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State and local 447 482 224

Foreign — — ( 41 )

Total current provision 454 484 237

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Foreign — 6 ( 3 )

Total deferred (benefit) provision 3,984 ( 3,867 ) ( 2,276 )

Total deferred provision (benefit) 2,016 3,984 ( 3,867 )

Total $ 2,470 $ 4,468 $ ( 3,630 )

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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.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The difference between our reported total provision for income taxes and the U.S.

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State and local taxes 1.79 % 1.77 % ( 0.06 ) %

Foreign taxes — % — % 0.06 %

Noncontrolling interest ( 2.17 ) % ( 2.58 ) % — %

Deferred adjustment

( 3.71 ) % — % — %

Other ( 0.61 ) % 0.46 % ( 4.43 ) %

1 unchanged sentence

Provision for income taxes ( 1.58 ) % ( 2.44 ) % 3.37 %

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Significant components of our deferred tax assets and liabilities are as follows:

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Operating lease right-of-use assets ( 63,955 ) ( 52,624 )

Net deferred tax assets (liabilities) $ ( 3,839 ) $ 144

Deferred tax assets and liabilities are reported net in Other assets or Other liabilities in the Consolidated and Combined Consolidated Balance Sheets.

Net deferred tax liabilities

$ ( 5,856 ) $ ( 3,839 )

Deferred tax assets and liabilities are reported net in Other assets or Other liabilities in the Consolidated Balance Sheets.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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Valuation allowance at end of period $ 215,082 $ 214,003 $ 143,604

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

As of December 31, 2023, certain of our corporate subsidiaries had U.S.

federal net operating loss carryforwards of approximately $ 623.6 million that are available to offset future taxable income.

If not utilized, $ 168.5 million of these carryforwards will begin to expire in the year 2034, with $ 455.1 million of these carryforwards having no expiration date.

federal and state net operating loss carryforwards of approximately $ 736.6 million and $ 184.8 million, respectively, that are available to offset future taxable income.

In regards to federal net operating loss carryforwards, $ 168.5 million of these carryforwards will begin to expire in the year 2032 and $ 568.1 million of these carryforwards have no expiration date.

As for state and local net operating loss carryforwards, most of these carryforwards will expire with the earliest year of expiration being 2024.

The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the relevant corporate subsidiary's ability to generate sufficient taxable income prior to the expiration of the carryforward period, if any.

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

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

In addition, the Manager may be reimbursed for various expenses incurred by the Manager on our behalf, including the

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

costs of legal, accounting and other administrative activities.

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

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes the Management fees, Income Incentive Allocation and Capital Gains Incentive Allocation included in these consolidated and combined consolidated financial statements:

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Management fees $ 12,467 $ 12,964 $ 15,638

Income incentive allocation — — —

Capital gains incentive allocation — — —

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

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

reimbursements are no greater than those which would be paid to outside professionals or consultants.

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

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

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

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

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

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

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

In connection with the spin-off, we issued 10.9 million options to purchase common stock to the Manager, with a term of 10 years and strike price of $ 2.76 as compensation to the Manager for services rendered in connection with the Redeemable Preferred Stock raise, as discussed in Notes 16 and 17.

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

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

Accrued management fee $ 6,400 $ 3,092

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Other Affiliate Transactions

As of December 31, 2022 and 2021, affiliates of our Manager 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 accompanying consolidated and combined consolidated financial statements.

The carrying amount of this non-controlling interest as of December 31, 2022 and 2021 was $( 41.1 ) million and $( 9.1 ) million, respectively.

As of December 31, 2023 and 2022, affiliates of our Manager and their related parties collectively own an approxi mately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the accompanying consolidated and combined consolidated financial statements.

The carrying amount of this non-controlling interest as of December 31, 2023 and 2022 was $( 78.0 ) million a nd $( 41.1 ) million, respectively.

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

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In July 2020, we purchased a 14 % interest in FYX from an affiliate of our Manager, which retained a non-controlling interest in FYX subsequent to the transaction.

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

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

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

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 in FYX.

In October 2022, we entered into a shareholder loan agreement with our equity method investee, Long Ridge.

Refer to Note 5 for additional information.

FTAI INFRASTRUCTURE INC.

NOTES TO CONSOLIDATED AND COMBINED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

For the year ended December 31, 2023, the Company incurred approximat ely $ 0.4 million o f rent and office related expenses.

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

(“SoftBank”).

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

SEGMENT INFORMATION

Prior to the third quarter of 2022, we operated as three reportable and operating segments.

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

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

Additionally, during the third quarter of 2022, we modified our definition of Adjusted EBITDA to exclude the impact of interest and other costs on pension and other post-employment benefits (“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.

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

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

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

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

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

The Repauno segment consists of a 1,630 -acre deep-water port located along the Delaware River with an underground storage cavern, a new multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities.

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

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

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

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

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

Adjusted EBITDA is defined as net income (loss) attributable to stockholders and Former Parent, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, interest expense, interest costs on pension and OPEB liabilities, and dividends and accretion of redeemable preferred stock, (b) to include the impact of

our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

Adjusted EBITDA is defined as net income (loss) attributable to stockholders and Former Parent, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, interest expense, interest and other costs on pension and OPEB liabilities, dividends and accretion of redeemable preferred stock, and other non-recurring items, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

We believe that net income (loss) attributable to stockholders and Former Parent, as defined by U.S.

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Depreciation and amortization 19,590 48,916 9,336 — — 3,150 80,992

Asset impairment 743 — — — — — 743

Total expenses 114,042 116,862 31,539 2,820 30 99,554 364,847

Other expense

Other (expense) income

Equity in (losses) earnings of unconsolidated entities — — — ( 9,949 ) ( 14,814 ) 56 ( 24,707 )

Loss on sale of assets, net ( 1,603 ) — — — — — ( 1,603 )

(Loss) gain on sale of assets, net ( 437 ) 7,292 — — — — 6,855

Loss on extinguishment of debt ( 937 ) — — — — ( 1,099 ) ( 2,036 )

Interest expense ( 2,284 ) ( 32,443 ) ( 2,557 ) ( 3 ) — ( 62,316 ) ( 99,603 )

2 unchanged sentences

Income (loss) before income taxes 49,581 ( 71,169 ) ( 23,405 ) ( 5,249 ) ( 12,315 ) ( 94,723 ) ( 157,280 )

Provision for income taxes 1,287 3,016 165 — — — 4,468

(Benefit from) provision for income taxes ( 561 ) 2,468 496 — — 67 2,470

Net income (loss) 50,142 ( 73,637 ) ( 23,901 ) ( 5,249 ) ( 12,315 ) ( 94,790 ) ( 159,750 )

1 unchanged sentence

Dividends and accretion of redeemable preferred stock — — — — — 62,400 62,400

Net income (loss) attributable to stockholders and Former Parent $ 39,122 $ ( 35,623 ) $ ( 22,790 ) $ ( 61,298 ) $ ( 5,179 ) $ ( 91,473 ) $ ( 177,241 )

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

Net income (loss) attributable to stockholders $ 49,999 $ ( 36,720 ) $ ( 22,489 ) $ ( 5,249 ) $ ( 12,315 ) $ ( 156,962 ) $ ( 183,736 )

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

Year Ended December 31, 2023

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Equity in losses of unconsolidated entities ( 24,707 )

Interest costs on pension and OPEB liabilities ( 1,232 )

Interest and other costs on pension and OPEB liabilities ( 2,130 )

Dividends and accretion of redeemable preferred stock ( 62,400 )

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Provision for income taxes ( 2,470 )

Net loss attributable to stockholders and Former Parent $ ( 177,241 )

Other non-recurring items ( 2,470 )

Net loss attributable to stockholders $ ( 183,736 )

For the Year Ended December 31, 2022

11 unchanged sentences

Equity in (losses) earnings of unconsolidated entities — — — ( 60,538 ) ( 7,012 ) 151 ( 67,399 )

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

Loss on sale of assets, net ( 1,603 ) — — — — — ( 1,603 )

Interest expense ( 212 ) ( 24,798 ) ( 1,590 ) — — ( 26,639 ) ( 53,239 )

Other expense ( 422 ) ( 4,726 ) — ( 3,782 ) — — ( 8,930 )

Total other (expense) income ( 482 ) ( 19,538 ) ( 1,131 ) ( 17,379 ) ( 372 ) 470 ( 38,432 )

Other (expense) income ( 1,632 ) ( 4,317 ) — 524 2,123 133 ( 3,169 )

Total other expense ( 3,447 ) ( 29,115 ) ( 1,590 ) ( 60,014 ) ( 4,889 ) ( 26,355 ) ( 125,410 )

Income (loss) before income taxes 40,424 ( 64,625 ) ( 23,867 ) ( 61,298 ) ( 5,179 ) ( 68,504 ) ( 183,049 )

Provision for (benefit from) income taxes 64 229 — ( 3,930 ) — 7 ( 3,630 )

Provision for income taxes 1,287 3,016 165 — — — 4,468

Net income (loss) 39,137 ( 67,641 ) ( 24,032 ) ( 61,298 ) ( 5,179 ) ( 68,504 ) ( 187,517 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 26,250 ) ( 222 ) — — — ( 26,472 )

Net income (loss) attributable to Former Parent $ 14,088 $ ( 31,433 ) $ ( 12,648 ) $ ( 13,548 ) $ ( 372 ) $ ( 35,956 ) $ ( 79,869 )

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

Net income (loss) attributable to non-controlling interests in consolidated subsidiaries 15 ( 32,018 ) ( 1,242 ) — — ( 688 ) ( 33,933 )

Dividends and accretion of redeemable preferred stock — — — — — 23,657 23,657

Net income (loss) attributable to stockholders and Former Parent $ 39,122 $ ( 35,623 ) $ ( 22,790 ) $ ( 61,298 ) $ ( 5,179 ) $ ( 91,473 ) $ ( 177,241 )

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

Year Ended December 31, 2022

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Equity in losses of unconsolidated entities ( 67,399 )

Interest costs on pension and OPEB liabilities ( 445 )

Interest and other costs on pension and OPEB liabilities ( 1,232 )

Dividends and accretion of redeemable preferred stock ( 23,657 )

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Equity-based compensation expense ( 4,146 )

Benefit from income taxes 3,630

Net loss attributable to Former Parent $ ( 79,869 )

Provision for income taxes ( 4,468 )

Other non-recurring items —

Net loss attributable to stockholders and Former Parent $ ( 177,241 )

For the Year Ended December 31, 2021

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Total expenses 47,616 84,268 23,356 99 — 36,419 191,758

Other income (expense)

Other (expense) income

Equity in (losses) earnings of unconsolidated entities — — — ( 13,597 ) ( 372 ) 470 ( 13,499 )

Loss on sale of assets, net — ( 8 ) — — — — ( 8 )

Loss on extinguishment of debt — ( 4,724 ) — — — ( 4,724 )

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

Interest expense ( 60 ) ( 14,812 ) ( 1,147 ) — — — ( 16,019 )

Other income — 92 — — — — 92

Other expense ( 422 ) ( 4,726 ) — ( 3,782 ) — — ( 8,930 )

Total other (expense) income ( 482 ) ( 19,538 ) ( 1,131 ) ( 17,379 ) ( 372 ) 470 ( 38,432 )

Loss before income taxes ( 2,154 ) ( 35,889 ) ( 7,948 ) ( 5,485 ) — ( 22,231 ) ( 73,707 )

Income (loss) before income taxes 14,152 ( 57,454 ) ( 12,870 ) ( 17,478 ) ( 372 ) ( 35,949 ) ( 109,971 )

Provision for (benefit from) income taxes 64 229 — ( 3,930 ) — 7 ( 3,630 )

Net loss ( 2,154 ) ( 36,167 ) ( 7,948 ) ( 3,220 ) — ( 22,234 ) ( 71,723 )

Net income (loss) 14,088 ( 57,683 ) ( 12,870 ) ( 13,548 ) ( 372 ) ( 35,956 ) ( 106,341 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 26,250 ) ( 222 ) — — — ( 26,472 )

Net loss attributable to Former Parent $ ( 2,154 ) $ ( 19,684 ) $ ( 7,909 ) $ ( 3,220 ) $ — $ ( 22,234 ) $ ( 55,201 )

Net income (loss) attributable to Former Parent $ 14,088 $ ( 31,433 ) $ ( 12,648 ) $ ( 13,548 ) $ ( 372 ) $ ( 35,956 ) $ ( 79,869 )

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

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Equity in losses of unconsolidated entities ( 13,499 )

Interest costs on pension and OPEB liabilities —

Interest and other costs on pension and OPEB liabilities ( 445 )

Dividends and accretion of redeemable preferred stock —

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Equity-based compensation expense ( 4,038 )

Provision for income taxes 1,984

Benefit from income taxes 3,630

Other non-recurring items —

Net loss attributable to Former Parent $ ( 79,869 )

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Total liabilities 111,600 871,834 34,121 188,071 — 483,389 1,689,015

Redeemable preferred stock — — — — — 264,590 264,590

Non-controlling interests in equity of consolidated subsidiaries 1,403 ( 33,048 ) 1,093 — — 3,723 ( 26,829 )

Total equity 617,306 430,513 271,899 ( 179,533 ) 105,137 ( 720,528 ) 524,794

Total liabilities and equity $ 768,597 $ 1,284,431 $ 316,542 $ 357 $ 60,832 $ 11,542 $ 2,442,301

Total liabilities, redeemable preferred stock and equity $ 728,906 $ 1,302,347 $ 306,020 $ 8,538 $ 105,137 $ 27,451 $ 2,478,399

FTAI INFRASTRUCTURE INC.

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The Company also issued two classes of warrants to the preferred stockholders (see Note 17).

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

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

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

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The dividend rate on the Redeemable 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 December 31, 2022, the Company has $ 19.2 million of dividends paid-in-kind, increasing our Redeemable Preferred Stock balance, and $ 1.8 million of dividends paid in cash.

As of December 31, 2023, the Company has $ 73.3 million of PIK dividends, increasing our Redeemable Preferred Stock balance.

The Company had dividends paid in cash of $ 1.8 million and $ 1.8 million as of December 31, 2023 and 2022, respectively.

Dividends recorded in Dividends and accretion of redeemable preferred stock on the Consolidated and Combined Consolidated Statement of Operations totaled $ 55.8 million and $ 21.0 million for the years ended December 31, 2023 and 2022, respectively.

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

Such accretion, recorded in dividends and accretion of redeemable preferred stock on the Consolidated and Combined Consolidated Statements of Operations, totaled $ 2.7 million for the year ended December 31, 2022.

Such accretion, recorded in Dividends and accretion of redeemable preferred stock on the Consolidated and Combined Consolidated Statements of Operations, totaled $ 6.6 million and $ 2.7 million for the years ended December 31, 2023 and 2022, respectively.

Mandatory Redemption :

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If the Redeemable Preferred Stock were redeemed as of December 31, 2023, it would be redeemable for $ 446.5 million.

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

FTAI INFRASTRUCTURE INC.

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(Dollars in tables in thousands, unless otherwise noted)

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

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

For the year ended December 31, 2022, 586,269 shares of common stock have been excluded from the calculation of Diluted LPS because the impact would be anti-dilutive.

For the years ended December 31, 2023 and 2022, 2,917,041 a nd 586,269 shares of common stock, 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.

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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 years ended December 31, 2021 and 2020, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

For the year ended December 31, 2021, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

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

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Outstanding as of December 31, 2022

Issued 6,685,132 5.01

6,685,132 $ 5.01

Exercised — —

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6,685,132 $ 4.93

______________________________________________________________________________________

(1) Weighted average exercise price as of December 31, 2023 includes adjustments for quarterly dividend payments.

The weighted average remaining contractual term of the outstanding warrants as of December 31, 2023 is 6.6 years.

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The contingency related to $ 5.0 million of the total $ 15.0 million was resolved and paid during the year ended December 31, 2021, and the contingency related to an additional $ 5.0 million of the total $ 15.0 million was resolved and paid during the year ended December 31, 2022.

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

Under the agreement, which took effect in the second quarter of 2021, Jefferson Terminal is obligated to pay fixed marketing fees over the two-year agreement, which totals a minimum of $ 3.6 million for the next twelve months.

SUBSEQUENT EVENTS

Director Compensation

In January 2023, we issued 21,277 shares of common stock to a certain director as compensation.

Transtar Revolver Amendment

On January 13, 2023, we entered into an amendment agreement for the Transtar Revolver that provides for incremental revolving loans in the aggregate amount of $ 25.0 million.

On March 1, 2023, our board of directors declared a cash dividend on our common stock of $ 0.03 per share for the quarter ended December 31, 2022, payable on March 28, 2023 to the holders of record on March 14, 2023.

On February 29, 2024, our board of directors declared a cash dividend on our common stock of $ 0.03 per share for the quarter ended December 31, 2023, payable on April 5, 2024 to the holders of record on March 27, 2024.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data