What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-10 compared with 2023-10-27 · 187 added, 262 removed, 333 unchanged (57% of the section changed)

1 unchanged sentence

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand FTAI Infrastructure Inc.

(the “Company,” “we,” “our” or “us”).

Our MD&A should be read in conjunction with our unaudited consolidated and combined consolidated financial statements and the accompanying notes, and with Part II, Item 1A, “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.

We are in the business of acquiring, developing and operating assets and businesses that represent critical infrastructure for customers in the transportation and energy industries.

(“we”, “us”, “our”, or the “Company”).

Our MD&A should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes, and with Part II, Item 1A, “Risk Factors” and “Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q.

We are in the business of acquiring, developing and operating assets and businesses that represent critical infrastructure for customers in the transportation, energy and industrial products industries.

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

(previously Fortress Transportation and Infrastructure Investors LLC, “FTAI” or “Former Parent”).

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

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

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

(previously Fortress Transportation and Infrastructure Investors LLC;

“FTAI” or “Former Parent”).

We are a publicly-traded company trading on The Nasdaq Global Select Market under the symbol “FIP.”

Our operations consist of four primary business lines:

7 unchanged sentences

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

As of September 30, 2023, we had total consolidated assets of $2.4 billion and redeemable preferred equity and equity of $0.8 billion.

As of March 31, 2024, we had total consolidated assets of $2.3 billion and redeemable preferred stock and equity of $0.7 billion.

Operating Segments

Prior to the third quarter of 2022, we operated as three reportable 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 benefits (“OPEB”) liabilities and dividends and accretion on 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.

3 unchanged sentences

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.

2 unchanged sentences

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

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.

On May 22, 2023, Fortress and Mubadala announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank.

4 unchanged sentences

Adjusted EBITDA is not a financial measure in accordance with U.S.

generally accepted accounting principles (“U.S.GAAP”).

generally accepted accounting principles (“U.S.

This performance measure provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions.

We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.

Adjusted EBITDA is defined as net income (loss) attributable to stockholders or 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 on 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 .

Comparison of the three and nine months ended September 30, 2023 and 2022

Adjusted EBITDA is defined as net income (loss) attributable to stockholders, 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 .

Comparison of the three months ended March 31, 2024 and 2023

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

13 unchanged sentences

Other (expense) income

Equity in losses of unconsolidated entities (9,914) (12,080) 2,166 (7,173) (47,982) 40,809

(Loss) gain on sale of assets, net (263) (134) (129) 260 (134) 394

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

Equity in (losses) earnings of unconsolidated entities (11,902) 4,366 (16,268)

Loss on sale of assets, net (13) (124) 111

Interest expense (27,593) (23,250) (4,343)

Other income (expense) 2,387 (1,132) 3,519 3,978 (2,144) 6,122

Other income 2,365 221 2,144

Total other expense (37,143) (18,787) (18,356)

3 unchanged sentences

Net loss attributable to non-controlling interest in consolidated subsidiaries (10,690) (9,893) (797)

Dividends and accretion on redeemable preferred stock 15,984 9,263 6,721 45,811 9,263 36,548

Net loss attributable to stockholders/Former Parent $ (56,101) $ (44,076) $ (12,025) $ (135,543) $ (116,378) $ (19,165)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Dividends and accretion of redeemable preferred stock 16,975 14,570 2,405

Net loss attributable to stockholders $ (56,582) $ (40,589) $ (15,993)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net loss attributable to stockholders/Former Parent $ (56,101) $ (44,076) $ (12,025) $ (135,543) $ (116,378) $ (19,165)

Net loss attributable to stockholders $ (56,582) $ (40,589) $ (15,993)

Provision for income taxes 1,805 1,729 76

6 unchanged sentences

Depreciation & amortization expense (1)

21,097 20,135 962

Interest expense 27,593 23,250 4,343

1 unchanged sentence

6,257 8,190 (1,933)

Dividends and accretion on redeemable preferred stock 15,984 9,263 6,721 45,811 9,263 36,548

Dividends and accretion of redeemable preferred stock 16,975 14,570 2,405

Interest and other costs on pension and OPEB liabilities 600 480 120

1 unchanged sentence

— 1,288 (1,288)

Equity in losses of unconsolidated entities 9,914 12,080 (2,166) 7,173 47,982 (40,809)

Equity in losses (earnings) of unconsolidated entities 11,902 (4,366) 16,268

Non-controlling share of Adjusted EBITDA (4)

2 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) net loss of $(9,941) and $(12,177), (ii) interest expense of $8,830 and $7,551, (iii) depreciation and amortization expense of $6,965 and $7,883, (iv) acquisition and transaction expenses of $50 and $(16), (v) changes in fair value of non-hedge derivative instruments of $(352) and $6,432, (vi) equity-based compensation of $2 and $95 and (vii) asset impairment of $— and $2, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) net loss of $(7,283) and $(48,184), (ii) interest expense of $25,166 and $20,809, (iii) depreciation and amortization expense of $20,598 and $20,516, (iv) acquisition and transaction expenses of $307 and $375, (v) changes in fair value of non-hedge derivative instruments of $(18,162) and $28,164, (vi) equity-based compensation of $4 and $288 and (vii) asset impairment of $— and $34, respectively.

(2) Includes the following items for the three months ended September 30, 2023:

certain non-cash expenses related to cancellation of restricted shares of $1,131.

Includes the following items for the nine months ended September 30, 2023:

certain non-cash expenses related to cancellation of restricted shares and Railroad severance expense of $2,470.

(3) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) equity-based compensation of $718 and $102, (ii) (benefit from) provision for income taxes of $(19) and $464, (iii) interest expense of $1,821 and $1,326, (iv) depreciation and amortization expense of $2,870 and $2,507, (v) changes in fair value of non-hedge derivative instruments of $— and $(15), (vi) acquisition and transaction expense of $19 and $117 and (vii) interest and other costs on pension and OPEB liabilities of $1 and $1, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) equity-based compensation of $904 and $352, (ii) provision for income taxes of $69 and $494, (iii) interest expense of $5,558 and $4,029, (iv) depreciation and amortization expense of $8,950 and $7,091, (v) changes in fair value of non-hedge derivative instruments of $61 and $(50), (vi) other non-recurring items of $3 and $—, (vii) acquisition and transaction expense of $27 and $117, (viii) interest and other costs on pension and OPEB liabilities of $3 and $1 and (ix) asset impairment of $2 and $—, respectively.

Comparison of the three months ended September 30, 2023 and 2022

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) depreciation and amortization expense of $20,521 and $20,135 and (ii) capitalized contract costs amortization of $576 and $—.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net (loss) income of $(11,942) and $4,318, (ii) interest expense of $10,893 and $8,032, (iii) depreciation and amortization expense of $5,130 and $5,666, (iv) acquisition and transaction expenses of $19 and $20, (v) changes in fair value of non-hedge derivative instruments of $2,053 and $(9,847), (vi) equity-based compensation of $1 and $1, (vii) asset impairment of $87 and $— and (viii) equity method basis adjustments of $16 and $—, respectively.

(3) Includes the following item for the three months ended March 31, 2023:

Railroad severance expense of $1,288.

(4) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) equity-based compensation of $431 and $110, (ii) (benefit from) provision for income taxes of $(134) and $53, (iii) interest expense of $2,189 and $1,857, (iv) depreciation and amortization expense of $3,194 and $3,136, (v) changes in fair value of non-hedge derivative instruments of $— and $61, (vi) interest and other costs on pension and OPEB liabilities of $2 and $1 and (vii) other non-recurring items of $— and $3, respectively.

Comparison of the three months ended March 31, 2024 and 2023

Total revenues increased $6.0 million due to higher revenues of $5.3 million in the Railroad segment and $5.5 million in the Repauno segment, offset by lower revenues of $4.3 million in the Corporate and Other segment and $0.5 million in the Jefferson Terminal segment.

Roadside services revenue decreased $2.2 million due to the decline of roadside services for FYX in 2023.

Roadside services revenue decreased $4.3 million due to the decline of roadside services for FYX.

Terminal services revenues increased $2.7 million primarily due to the commencement of a butane throughput contract at Repauno in April 2023.

Rail revenues increased $5.3 million primarily due to an increase in both carloads and rates per car.

Comparison of the nine months ended September 30, 2023 and 2022

Total revenues increased $48.5 million due to higher revenues of $23.8 million in the Corporate and Other segment, $11.5 million in the Railroad segment, $8.1 million in the Jefferson Terminal segment and $5.0 million in the Repauno segment.

Roadside services revenue increased $23.8 million due to the acquisition of a majority stake in and consolidation of FYX in May 2022.

Terminal services revenues increased $16.4 million primarily due to higher throughput volumes at Jefferson Terminal and the commencement of a butane throughput contract at Repauno in April 2023.

Rail revenues increased $11.7 million primarily due to (i) an increase in both carloads and rates per car and (ii) the implementation of a fuel surcharge that went into effect in March 2022.

Comparison of the three months ended September 30, 2023 and 2022

Total expenses increased $7.2 million, primarily due to an increase in (i) operating expenses, (ii) depreciation and amortization and partially offset by a decrease in (iii) acquisition and transaction expenses.

Operating expenses increased $7.5 million which primarily reflects:

• an increase of $6.3 million in compensation and benefits primarily due to (i) an increase of $2.5 million in the Railroad segment primarily related to an increase in labor and other costs associated with higher carload activity, (ii) an increase of $2.6 million in the Jefferson segment primarily due to costs associated with stock-based compensation, higher labor and other costs associated with increased terminal throughput activity and (iii) an increase of $1.2 million in the Repauno segment due to costs associated with stock-based compensation and increased labor;

• an increase of $3.6 million related to costs associated with Railroad operations due to increased traffic;

Comparison of the three months ended March 31, 2024 and 2023

Total expenses increased $2.0 million, primarily due to an increase in (i) acquisition and transaction expenses, (ii) general and administrative expenses and (iii) depreciation and amortization, partially offset by a decrease in operating expenses.

Acquisition and transaction expenses increased $0.7 million associated with professional fees for a potential acquisition in the Corporate and Other segment.

General and administrative expenses increased $1.7 million primarily due to higher professional fees in the Corporate and Other segment.

Depreciation and amortization increased $0.4 million primarily due to additional assets placed in service in the Jefferson Terminal segment.

Operating expenses decreased $0.6 million which primarily reflects:

• a decrease of $4.4 million due to decreased roadside services at FYX;

• a decrease of $0.5 million in fuel costs in the Railroad segment;

partially offset by

• a decrease of $2.5 million in cost of sales in the Corporate and Other segment due to fewer roadside service jobs at FYX.

Depreciation and amortization increased $2.0 million primarily due to additional assets placed in service at Jefferson Terminal.

General and administrative expense decreased $0.7 million primarily due to lower professional fees in the Corporate and Other segment.

Acquisition and transaction expenses decreased $2.1 million primarily due to expenses incurred in 2022 related to the Spin-off.

Comparison of the nine months ended September 30, 2023 and 2022

Total expenses increased $43.4 million, primarily due to an increase in (i) operating expenses, (ii) depreciation and amortization and (iii) general and administrative expense, partially offset by a decrease in (iv) acquisition and transaction expenses.

Operating expenses increased $48.1 million which primarily reflects:

• an increase of $17.0 million in cost of sales in the Corporate and Other segment due to the acquisition and consolidation of FYX in May 2022;

• an increase of $20.0 million in compensation and benefits primarily due to (i) an increase of $11.2 million in the Railroad segment primarily related to (a) an increase in labor and other costs associated with higher carload activity and (b) severance costs at Transtar, (ii) an increase of $4.7 million in the Corporate and Other segment due to the acquisition and consolidation of FYX in May 2022 and (iii) an increase of $3.7 million in the Jefferson and Repauno segments due to costs associated with stock-based compensation;

• an increase of $5.2 million in repairs and maintenance expense due to increased activity at Transtar and Jefferson Terminal.

Depreciation and amortization increased $8.1 million primarily due to (i) additional assets placed in service at Jefferson Terminal and (ii) the acquisition and consolidation of FYX in May 2022.

Acquisition and transaction expenses decreased $14.3 million primarily due to expenses incurred in 2022 related to the Spin-off.

• an increase of $2.7 million primarily due to costs associated with stock-based compensation, insurance, higher labor and other costs associated with increased terminal throughput activity in the Jefferson Terminal segment;

• an increase of $1.2 million in the Repauno segment which primarily reflects higher operating expenses due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site.

Other expense

Total other expense increased $3.3 million during the three months ended September 30, 2023 which primarily reflects:

• an increase in interest expense of $6.8 million primarily due to an increase in the average outstanding debt of approximately $284.0 million which consists of (i) $255.7 million for the Senior Notes due 2027 and (ii) $28.3 million for the EB-5 Loan Agreement;

• an increase in loss on extinguishment of debt of $2.0 million due to repayment of amounts outstanding under the Transtar Revolver and Credit Agreement in full, partially offset by

• an increase of $2.2 million in equity in earnings of unconsolidated entities primarily due to unrealized gains on power swaps at Long Ridge;

• an increase of $3.5 million in Other income due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC.

Total other expense decreased $4.0 million during the nine months ended September 30, 2023 which primarily reflects:

• an increase of $40.8 million in equity in earnings of unconsolidated entities primarily due to unrealized gains on power swaps at Long Ridge;

• an increase of $6.1 million in Other income due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC, partially offset by

• an increase in interest expense of $41.3 million primarily due to an increase in the average outstanding debt of approximately $471.4 million which consists of (i) $402.6 million for the Senior Notes due 2027, (ii) $33.3 million for the Transtar Revolver, (iii) $30.0 million for the EB-5 Loan Agreement and (iv) $5.5 million for the Credit Agreement;

• an increase in loss on extinguishment of debt of $2.0 million due to repayment of amounts outstanding under the Transtar Revolver and Credit Agreement in full.

Net loss increased $6.9 million and decreased $11.6 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Total other expense increased $18.4 million during the three months ended March 31, 2024 which primarily reflects:

• an increase in interest expense of $4.3 million primarily due to an increase in the average outstanding debt of approximately $71.0 million which consists of (i) $100.6 million for the Senior Notes due 2027, (ii) $19.3 million for the DRP Revolver and (iii) $1.1 million for the EB-5 Loan Agreement, offset by the full repayment of the Transtar Revolver in July 2023 for $50.0 million;

• an increase of $16.3 million in equity in losses of unconsolidated entities primarily due to a decrease in unrealized gains on power swaps at Long Ridge;

partially offset by

• an increase of $2.1 million in Other income due to interest income from increased loan balance on the loan agreement between the Company and Long Ridge Energy & Power LLC.

Net loss increased $14.4 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $1.4 million and increased $15.0 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITDA increased $5.3 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Railroad Segment

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

9 unchanged sentences

Loss on sale of assets, net (13) (124) 111

Loss on extinguishment of debt (937) — (937) (937) — (937)

Interest expense (69) (955) 886

2 unchanged sentences

Income before income taxes 15,589 8,714 6,875

Provision for (benefit from) income taxes 524 (942) 1,466 1,842 2,391 (549)

Provision for income taxes 1,092 598 494

Net income 14,497 8,116 6,381

Net income attributable to non-controlling interest in consolidated subsidiaries 61 18 43

Net income attributable to stockholders/Former Parent $ 10,620 $ 12,049 $ (1,429) $ 30,504 $ 30,597 $ (93)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net income attributable to stockholders $ 14,436 $ 8,098 $ 6,338

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net income attributable to stockholders/Former Parent $ 10,620 $ 12,049 $ (1,429) $ 30,504 $ 30,597 $ (93)

Net income attributable to stockholders $ 14,436 $ 8,098 $ 6,338

Provision for income taxes 1,092 598 494

8 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities — — —

Dividends and accretion on redeemable preferred stock — — — — — —

Dividends and accretion of redeemable preferred stock — — —

Interest and other costs on pension and OPEB liabilities 600 480 120

6 unchanged sentences

________________________________________________________

(1) Includes the following items for the three and nine months ended September 30, 2023:

Railroad severance expense of $— and $1,339, respectively.

(2) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) equity-based compensation of $1 and $1, (ii) provision for income taxes of $3 and $2, (iii) depreciation and amortization expense of $13 and $16, (iv) interest and other costs on pension and OPEB liabilities of $1 and $1 and (v) acquisition and transaction expense of $1 and $—, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) equity-based compensation of $2 and $1, (ii) provision for income taxes of $4 and $2, (iii) depreciation and amortization expense of $35 and $16, (iv) interest expense of $5 and $—, (v) other non-recurring items of $3 and $—, (vi) interest and other costs on pension and OPEB liabilities of $3 and $1, (vii) asset impairment of $2 and $— and (viii) acquisition and transaction expense of $1 and $—, respectively.

Total revenues increased $2.7 million during the three months ended September 30, 2023 primarily due to both an increase in carloads and rates per car.

Total revenues increased $11.5 million during the nine months ended September 30, 2023 due to both an increase in (i) carloads and rates per car and (ii) the implementation of a fuel surcharge that went into effect in early 2022.

Total expenses increased $1.3 million during the three months ended September 30, 2023 which primarily reflects an increase in operating expense of $2.3 million due to (i) an increase in compensation, benefits and other costs associated with higher carload activity and is partially offset by (ii) a decrease in depreciation and amortization expense of $1.0 million due to a decrease in railcars.

Total expenses increased $8.1 million during the nine months ended September 30, 2023 which primarily reflects an increase in operating expense of $7.9 million due to (i) an increase in compensation, benefits and other costs associated with higher carload activity and (ii) repairs and maintenance.

(1) Includes the following item for the three months ended March 31, 2023:

Railroad severance expense of $1,288.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) equity-based compensation of $1 and $1, (ii) provision for income taxes of $4 and $1, (iii) interest expense of $— and $2, (iv) depreciation and amortization expense of $18 and $10, (v) interest and other costs on pension and OPEB liabilities of $2 and $1 and (vi) other non-recurring items of $— and $3, respectively.

Total revenues increased $5.3 million during the three months ended March 31, 2024 primarily due to both an increase in carloads and rates per car.

Total expenses decreased $0.6 million during the three months ended March 31, 2024, which primarily reflects a decrease in operating expenses of $0.4 million mainly due to lower fuel costs.

Other expense

Total other expense increased $1.3 million and $4.0 million during the three and nine months ended September 30, 2023, respectively, which primarily reflects (i) an increase in interest expense related to the revolver entered into in the fourth quarter of 2022 and paid off in the third quarter of 2023 and (ii) an increase in loss on extinguishment of debt due to repayment of amounts outstanding under the Transtar Revolver in full.

Total other expense decreased $0.9 million during the three months ended March 31, 2024, which primarily reflects a decrease in interest expense related to the revolver entered into in the fourth quarter of 2022 and paid off in the third quarter of 2023.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $1.0 million and increased $4.1 million during the three and nine months ended September 30, 2023, respectively, primarily due to the activity noted above.

Adjusted EBITDA increased $4.5 million during the three months ended March 31, 2024 primarily due to the activity noted above.

Jefferson Terminal Segment

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

6 unchanged sentences

Total expenses 31,464 28,294 3,170

Other income (expense)

Gain on sale of assets, net 1 — 1 733 — 733

Other (expense) income

Interest expense (9,297) (7,884) (1,413)

5 unchanged sentences

Net loss attributable to non-controlling interest in consolidated subsidiaries (10,465) (9,185) (1,280)

Net loss attributable to stockholders/Former Parent $ (12,017) $ (8,261) $ (3,756) $ (29,944) $ (26,003) $ (3,941)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net loss attributable to stockholders $ (11,120) $ (9,162) $ (1,958)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net loss attributable to stockholders/Former Parent $ (12,017) $ (8,261) $ (3,756) $ (29,944) $ (26,003) (3,941)

(Benefits from) provision for income taxes (126) 2,114 (2,240) 224 2,251 (2,027)

Net loss attributable to stockholders $ (11,120) $ (9,162) $ (1,958)

(Benefit from) provision for income taxes (554) 198 (752)

Equity-based compensation expense 1,759 444 1,315

5 unchanged sentences

Depreciation and amortization expense (1)

12,906 11,869 1,037

Interest expense 9,297 7,884 1,413

Pro-rata share of Adjusted EBITDA from unconsolidated entities — — —

Dividends and accretion on redeemable preferred stock — — — — — —

Dividends and accretion of redeemable preferred stock — — —

Interest and other costs on pension and OPEB liabilities — — —

Other non-recurring items

1,131 — 1,131 1,131 — 1,131

Equity in earnings of unconsolidated entities — — —

3 unchanged sentences

________________________________________________________

(1) Includes the following items for the three and nine months ended September 30, 2023:

certain non-cash expenses related to cancellation of restricted shares of $1,131 and $1,131, respectively.

(2) Includ es the following items for the three months ended September 30, 2023 and 2022:

(i) equity-based compensation of $658 and $94, (ii) provision for income taxes of $(30) and $462, (iii) interest expense of $1,786 and $1,306, (iv) depreciation and amortization expense of $2,728 and $2,129 and (v) acquisition and transaction expense of $18 and $—, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) equity-based compensation of $831 and $329, (ii) provision for income taxes of $51 and $492, (iii) interest expense of $5,453 and $3,979, (iv) depreciation and amortization expense of $8,280 and $6,374 and (v) acquisition and transaction expense of $26 and $—, respectively.

Total revenues decreased $0.6 million during the three months ended September 30, 2023 due to a decrease in average crude oil throughput volumes.

Total revenues increased $8.1 million during the nine months ended September 30, 2023 primarily due to an increase in average refined products throughput volumes.

Total expenses increased $6.3 million during the three months ended September 30, 2023 which primarily reflects:

• an increase in operating expenses of $3.4 million primarily due to costs associated with stock-based compensation, higher labor and other costs associated with increased terminal throughput activity;

(1) Includ es the following items for the three months ended March 31, 2024 and 2023:

(i) depreciation and amortization expense of $12,330 and $11,869 and (ii) capitalized contract costs amortization of $576 and $—.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) equity-based compensation of $412 and $102, (ii) (benefit from) provision for income taxes of $(130) and $46, (iii) interest expense of $2,180 and $1,823 and (iv) depreciation and amortization expense of $3,027 and $2,744, respectively.

Total revenues decreased $0.5 million during the three months ended March 31, 2024 due to a decrease in average crude oil throughput volumes.

Total expenses increased $3.2 million during the three months ended March 31, 2024 which primarily reflects:

• an increase in operating expenses of $2.7 million primarily due to costs associated with stock-based compensation, insurance, higher labor and other costs associated with increased terminal throughput activity;

• an increase in depreciation and amortization of $0.5 million due to additional assets being placed into service.

Total expenses increase d $16.0 million during the nine months ended September 30, 2023, which primarily reflects:

• an increase in operating expenses of $8.4 million p rimarily due to costs associated with stock-based compensation, higher labor and other costs associated with increased terminal throughput activity;

• an increase in depreciation and amortization o f $7.5 million due to additional assets being placed into service.

Other expense

Other expense increased $0.8 million during the three months ended September 30, 2023, which primarily reflects (i) an increase in interest expense of $2.3 million due to additional borrowings for the EB-5 Loan Agreement, partially offset by (ii) a benefit of $1.5 million from the decrease in prior period losses related to the termination of a pipeline contract.

Other expense increased $3.7 million during the nine months ended September 30, 2023, which primarily reflects (i) an increase in interest expense of $5.9 million due to additional borrowings for the EB-5 Loan Agreement, partially offset by (ii) a benefit of $1.5 million from the decrease in prior period losses related to the termination of a pipeline contract and (iii) a gain from the sale of land of $0.7 million.

Total other expense increased $0.3 million during the three months ended March 31, 2024, which primarily reflects an increase in interest expense of $1.4 million due to a reduction in capitalized interest, partially offset by a benefit of $1.1 million from the decrease in prior period losses related to the termination of a pipeline contract.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $1.7 million and $7.4 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITDA increased $0.3 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Repauno Segment

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

Rail revenues $ — $ — $ — $ — $ 86 $ (86)

Terminal services revenues $ 4,078 $ 362 $ 3,716

8 unchanged sentences

Loss before income taxes (4,682) (9,215) 4,533

Provision for income taxes 103 — 103 257 — 257

(Benefit from) provision for income taxes (136) 114 (250)

Net loss (4,546) (9,329) 4,783

Net loss attributable to non-controlling interest in consolidated subsidiaries (286) (498) 212

Net loss attributable to stockholders/Former Parent $ (4,946) $ (4,917) $ (29) $ (18,287) $ (17,984) $ (303)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net loss attributable to stockholders $ (4,260) $ (8,831) $ 4,571

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net loss attributable to stockholders/Former Parent $ (4,946) $ (4,917) $ (29) $ (18,287) $ (17,984) $ (303)

Provision for income taxes 103 — 103 257 — 257

Net loss attributable to stockholders $ (4,260) $ (8,831) $ 4,571

(Benefit from) provision for income taxes (136) 114 (250)

Equity-based compensation expense 291 126 165

7 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities — — —

Dividends and accretion on redeemable preferred stock — — — — — —

Dividends and accretion of redeemable preferred stock — — —

Interest and other costs on pension and OPEB liabilities — — —

5 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) equity-based compensation of $59 and $7, (ii) interest expense of $35 and $20, (iii) depreciation and amortization expense of $129 and $110, (iv) provision for income taxes of $8 and $—, and (v) changes in fair value of non-hedge derivative instruments of $— and $(15), respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) equity-based compensation of $71 and $22, (ii) interest expense of $100 and $50, (iii) depreciation and amortization expense of $375 and $334, (iv) provision for income taxes of $14 and $—, and (v) changes in fair value of non-hedge derivative instruments of $61 and $(50), respectively.

Total revenue increased $2.2 million and $5.0 million during the three and nine months ended September 30, 2023, respectively, primarily due to (i) the commencement of a butane throughput contract at Repauno in April 2023, partially offset by (ii) losses on the sale of butane inventory as the terminal prepared for the new throughput contract.

Total expenses increased $2.0 million and $4.5 million during the three and nine months ended September 30, 2023, respectively, which primarily reflects higher operating expenses due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site.

(1) Includes the following items for the three months ended March 31, 2024 an d 2023:

(i) equity-based compensation of $18 and $7, (ii) (benefit from) provision for income taxes of $(8) and $6, (iii) interest expense of $9 and $32, (iv) depreciation and amortization expense of $149 and $122 and (v) changes in fair value of non-hedge derivative instruments of $— and $61, respectively.

Total revenue increased $5.5 million during the three months ended March 31, 2024 primarily due to (i) the commencement of a butane throughput contract at Repauno in April 2023, as well as (ii) losses in the prior year related to the sale of butane inventory as the terminal prepared for the new throughput contract.

Total expenses increased $1.4 million during the three months ended March 31, 2024, which primarily reflects higher operating expenses due to costs associated with stock-based compensation, and an increase in labor costs and professional fees related to the continued development of the site.

Other expense

Total other expense increased $0.2 million and $0.8 million during the three and nine months ended September 30, 2023, respectively, which reflects an increase in interest expense due to an increase in the borrowing rate on the revolver.

Total other expense decreased $0.4 million during the three months ended March 31, 2024, which reflects an increase in capitalized interest, partially offset by an increase in interest expense due to an increase in the borrowing amount on the revolver, amended in December 2023.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $1.5 million and $3.4 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITDA increased $3.2 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Power and Gas Segment

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

7 unchanged sentences

Interest expense — (2) 2

Other income (expense) 2,149 (25) 2,174 5,021 (25) 5,046

Other income 2,302 1,229 1,073

Total other (expense) income (4,735) 8,988 (13,723)

(Loss) profit before income taxes (6,301) (9,903) 3,602 5,300 (44,423) 49,723

Provision for income taxes — — — — — —

Net (loss) income (6,301) (9,903) 3,602 5,300 (44,423) 49,723

Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — —

Net (loss) income attributable to stockholders/Former Parent $ (6,301) $ (9,903) $ 3,602 $ 5,300 $ (44,423) $ 49,723

The following table sets forth a reconciliation of net income (loss) attributable to stockholders or Former Parent to Adjusted EBITDA:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net (loss) income attributable to stockholders $ (5,427) $ 8,542 $ (13,969)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net (loss) income attributable to stockholders/Former Parent $ (6,301) $ (9,903) $ 3,602 $ 5,300 $ (44,423) $ 49,723

Net (loss) income attributable to stockholders $ (5,427) $ 8,542 $ (13,969)

Provision for income taxes — — —

9 unchanged sentences

8,782 10,509 (1,727)

Dividends and accretion on redeemable preferred stock — — — — — —

Dividends and accretion of redeemable preferred stock — — —

Interest and other costs on pension and OPEB liabilities — — —

4 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) net loss of $(7,057) and $(9,222), (ii) interest expense of $7,932 and $6,720, (iii) depreciation and amortization expense of $6,639 and $7,565, (iv) acquisition and transaction expenses of $50 and $(16), (v) changes in fair value of non-hedge derivative instruments of $(352) and $6,432, (vi) equity-based compensation of $2 and $95 and (vii) asset impairment of $— and $2, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) net income (loss) of $2,343 and $(43,574), (ii) interest expense of $22,544 and $19,767, (iii) depreciation and amortization expense of $19,620 and $20,089, (iv) acquisition and transaction expenses of $307 and $375, (v) changes in fair value of non-hedge derivative instruments of $(18,162) and $28,164, (vi) equity-based compensation of $4 and $288, and (vii) asset impairment of $— and $34, respectively.

Total expenses increased $0.7 million and $1.2 million during the three and nine months ended September 30, 2023, respectively, which primarily relates to an increase in operating administrative costs.

Other income (expense)

Total other income (expense) increased $4.3 million during the three months ended September 30, 2023 which reflects:

• an increase in equity in earnings of unconsolidated entities of $2.2 million, primarily due to unrealized gains on power swaps at Long Ridge and lower costs to generate power;

• an increase in other income of $2.2 million due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC.

Total other income (expense) increased $51.0 million during the nine months ended September 30, 2023 which reflects:

• an increase in equity in earnings of unconsolidated entities of $45.9 million, primarily due to unrealized gains on power swaps at Long Ridge as power prices decreased;

• an increase in other income of $5.0 million due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC.

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net (loss) income of $(7,053) and $7,761, (ii) interest expense of $9,210 and $7,234, (iii) depreciation and amortization expense of $4,449 and $5,340, (iv) acquisition and transaction expenses of $19 and $20, (v) changes in fair value of non-hedge derivative instruments of $2,053 and $(9,847), (vi) equity-based compensation of $1 and $1, (vii) asset impairment of $87 and $— and (viii) equity method basis adjustments of $16 and $—, respectively.

Total expenses increased $0.2 million during the three months ended March 31, 2024, which primarily relates to an increase in professional fees.

Other (expense) income

Total other expense increased $13.7 million during the three months ended March 31, 2024 which reflects:

• an increase in equity in losses of unconsolidated entities of $14.8 million, primarily due to decrease in unrealized gains on power swaps at Long Ridge;

partially offset by

• an increase in other income of $1.1 million due to interest income from an increased loan balance under the loan agreement between the Company and Long Ridge Energy & Power LLC.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $3.3 million and increased $5.0 million during the three and nine months ended September 30, 2023, respectively, due to a decrease and increase in the pro-rata share of adjusted EBITDA from unconsolidated entities of $4.4 million and $1.5 million, respectively, and the changes noted above.

Adjusted EBITDA decreased $0.9 million during the three months ended March 31, 2024 due to a decrease in the pro-rata share of adjusted EBITDA from unconsolidated entities of $1.7 million and the changes noted above.

Sustainability and Energy Transition Segment

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

8 unchanged sentences

Total other expense (4,214) (2,809) (1,405)

Loss before income taxes (2,218) (2,418) 200 (7,714) (3,015) (4,699)

Benefit from income taxes — (61) 61 — — —

Net loss (2,218) (2,357) 139 (7,714) (3,015) (4,699)

Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — —

Net loss attributable to stockholders/Former Parent $ (2,218) $ (2,357) $ 139 $ (7,714) $ (3,015) $ (4,699)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net loss attributable to stockholders $ (4,214) $ (2,811) $ (1,403)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net loss attributable to stockholders/Former Parent $ (2,218) $ (2,357) $ 139 $ (7,714) $ (3,015) $ (4,699)

Net loss attributable to stockholders $ (4,214) $ (2,811) $ (1,403)

Provision for income taxes — — —

9 unchanged sentences

(2,519) (2,316) (203)

Dividends and accretion on redeemable preferred stock — — — — — —

Dividends and accretion of redeemable preferred stock — — —

Interest and other costs on pension and OPEB liabilities — — —

4 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) net loss of $(2,868) and $(2,937), (ii) interest expense of $888 and $806 and (iii) depreciation and amortization expense of $326 and $318, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net loss of $(4,874) and $(3,419), (ii) interest expense of $1,674 and $777 and (iii) depreciation and amortization expense of $681 and $326, respectively .

Other expense

Total other expense decreased $0.2 million during the three months ended September 30, 2023, which reflects changes in equity in losses of unconsolidated entities primarily due to lower operating losses at GM-FTAI Holdco LLC.

Total other expense increased $4.7 million during the nine months ended September 30, 2023, which reflects changes in equity in losses of unconsolidated entities primarily due to operating losses at GM-FTAI Holdco LLC.

Total other expense increased $1.4 million during the three months ended March 31, 2024, which reflects changes in equity in losses of unconsolidated entities primarily due to higher operating losses at GM-FTAI Holdco LLC.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $0.3 million and decreased $2.5 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITDA decreased $0.1 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Corporate and Other

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

9 unchanged sentences

Equity in earnings of unconsolidated entities 9 21 (12)

Loss on extinguishment of debt (1,083) — (1,083) (1,083) — (1,083)

Interest expense (18,081) (13,821) (4,260)

Other income — 132 (132) — 95 (95)

Total other expense (18,072) (13,800) (4,272)

Loss before income taxes (27,619) (21,264) (6,355)

(Benefit from) provision for income taxes (493) 444 (937) 237 444 (207)

Provision for income taxes 1,403 819 584

Net loss (29,022) (22,083) (6,939)

Net income (loss) attributable to non-controlling interest in consolidated subsidiaries — (173) 173 (229) (198) (31)

Dividends and accretion on redeemable preferred stock 15,984 9,263 6,721 45,811 9,263 36,548

Net loss attributable to stockholders/Former Parent $ (41,239) $ (30,687) $ (10,552) $ (115,402) $ (55,550) $ (59,852)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net loss attributable to non-controlling interest in consolidated subsidiaries — (228) 228

Dividends and accretion of redeemable preferred stock 16,975 14,570 2,405

Net loss attributable to stockholders $ (45,997) $ (36,425) $ (9,572)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net loss attributable to stockholders/Former Parent $ (41,239) $ (30,687) $ (10,552) $ (115,402) $ (55,550) $ (59,852)

Net loss attributable to stockholders $ (45,997) $ (36,425) $ (9,572)

Provision for income taxes 1,403 819 584

8 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)

(6) 7 (13) (16) 45 (61)

Dividends and accretion on redeemable preferred stock 15,984 9,263 6,721 45,811 9,263 36,548

Dividends and accretion of redeemable preferred stock 16,975 14,570 2,405

Interest and other costs on pension and OPEB liabilities — — —

2 unchanged sentences

Non-controlling share of Adjusted EBITDA (2)

— (369) 369 (260) (484) 224

Adjusted EBITDA (non-GAAP) (8,078) (6,516) (1,562)

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) net loss of $(16) and $(18) and (ii) interest expense of $10 and $25, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net loss of $(15) and $(24) and (ii) interest expense of $9 and $21, respectively.

(2) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) depreciation and amortization expense of $— and $252 and (ii) acquisition and transaction expense of $— and $117, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) depreciation and amortization expense of $260 and $367 and (ii) acquisition and transaction expense of $— and $117, respectively.

Total revenues decreased $2.2 million during the three months ended September 30, 2023 compared to the three months ended September 30, 2022, primarily due to a decrease in roadside services at FYX in the period.

Total revenues during the nine months ended September 30, 2023 increased $23.8 million , primarily due to new business acquired at FYX, in addition to FYX price increases during the period.

Total expenses decreased $3.1 million during the three months ended September 30, 2023 which primarily reflects:

• a decrease in operating expenses of $1.2 million due to a decrease in roadside services at FYX in 2023;

• a decrease in general and administrative expense of $0.7 million primarily due to lower professional fees;

• a decrease in acquisition and transaction expenses of $1.8 million primarily due to expenses incurred in 2022 related to the Spin-off.

Total expenses increased $13.6 million during the nine months ended September 30, 2023 which primarily reflects:

• an increase in operating expenses of $25.7 million due to the acquisition and consolidation of FYX in May 2022;

• an increase in general and administrative expense of $1.3 million primarily due to higher professional fees;

• a decrease in acquisition and transaction expenses of $14.1 million primarily due to expenses incurred in 2022 related to the Spin-off.

(2) Includes the following item for the three months ended March 31, 2024 and 2023:

(i) depreciation and amortization expense of $— and $260.

Total revenues decreased $4.3 million during the three months ended March 31, 2024 primarily due to a decrease in roadside services at FYX.

Total expenses decreased $2.2 million during the three months ended March 31, 2024 which primarily reflects:

• a decrease in operating expenses of $4.4 million due to a decrease in roadside services at FYX;

• a decrease in depreciation and amortization expense of $0.2 million due to assets that became fully depreciated;

partially offset by

• an increase in general and administrative expenses of $1.7 million primarily due to higher professional fees;

• an increase in acquisition and transaction expenses of $0.7 million associated with professional fees for a potential acquisition.

Other expense

Total other expense increased $5.6 million and $33.8 million during the three and nine months ended September 30, 2023, respectively, which primarily reflects (i) an increase in interest expense due to the additional issuance of the Senior Notes due 2027 in July 2023 and (ii) an increase in loss on extinguishment of debt due to repayment of amounts outstanding under the Credit Agreement in full.

Total other expense increased $4.3 million during the three months ended March 31, 2024, which primarily reflects an increase in interest expense due to the additional issuance of the Senior Notes due 2027 in July 2023.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $0.8 million and $2.3 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITDA decreased $1.6 million during the three months ended March 31, 2024 primarily due to the changes noted above.

Liquidity and Capital Resources

We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.

The liquidity required to fund our working capital, capital expenditures and other cash needs is provided from a combination of internally generated cash flows and external debt financing.

On April 2, 2024, Jefferson Terminal entered into a credit agreement, providing for a $75.0 million term loan facility, which matures at the earlier of (i) December 13, 2024 or (ii) 30 days prior to the date on which the first cash dividend payment on

preferred equity is paid, and bears interest at the Applicable Margin of 4.00% plus Adjusted Term SOFR.

The proceeds will be used for general corporate purposes.

As discussed in Note 2 to the consolidated financial statements, 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 repayments of Jefferson Terminal’s $75.0 million credit agreement due on December 13, 2024 and Taxable Series 2020B Bonds totaling $79.1 million that mature on January 1, 2025 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 and began implementing a plan to alleviate liquidity risk by:

(i) refinancing the Taxable Series 2020B Bonds and issuing new long-term, low-cost municipal bonds, including contributing additional unencumbered assets as collateral;

and (ii) continuing to accrue paid-in-kind dividends on its Series A Senior Preferred Stock.

On May 10, 2024, Jefferson Terminal announced an approximately $276 million municipal bond offering, and expects to close the offering in the coming weeks.

If fully implemented, 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 financial statements were issued.

In addition to the plans discussed above, we are currently evaluating several potential transactions and related financings, including, but not limited to, asset sales, debt refinancing, equity refinancing, and providing for increased debt capacity at certain of our subsidiaries, which could occur within the next 12 months.

None of these transactions, negotiations or financings are definitive or included within our assessment of our planned liquidity needs.

We cannot assure if or when any such transaction will be consummated or the terms of any such transaction.

We continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.

This includes limiting discretionary spending across the organization and re-prioritizing our capital projects.

Our principal uses of liquidity have been and continue to be (i) acquisitions of and investments in infrastructure assets, (ii) expenses associated with our operating activities and (iii) debt service obligations associated with our investments.

• Cash used for the purpose of making investments was $89.2 million and $180.5 million during the nine months ended September 30, 2023 and 2022, respectively.

• Cash used for the purpose of making investments was $18.9 million and $66.9 million during the three months ended March 31, 2024 and 2023, respectively.

• Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.

Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities.

Our principal sources of liquidity to fund these uses have been and continue to be (i) cash and restricted cash on hand as of September 30, 2023, (ii) revenues from our infrastructure business net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales.

• Cash flows used in operating activities were $2.2 million and $37.7 million during the nine months ended September 30, 2023 and 2022, respectively.

• During the nine months ended September 30, 2023, additional borrowings were obtained in connection with the (i) Transtar Revolver of $40.0 million, (ii) Credit Agreement of $25.0 million, (iii) EB-5 Loan Agreement of $1.6 million, and (iv) 2027 Notes of $100.0 million.

In July 2023, we used a portion of the net proceeds from the $100.0 million offering to repay the amounts outstanding under the Transtar Revolver and Credit Agreement in full during the nine months ended September 30, 2023.

During the nine months ended September 30, 2022, additional borrowings were obtained in connection with the (i) 2027 Notes of $500.0 million and (ii) EB-5 Loan Agreement of $9.5 million.

• Proceeds from the sale of assets were $1.3 million and $5.7 million during the nine months ended September 30, 2023 and 2022, respectively.

We are currently evaluating several potential transactions and related financings, including, but not limited to, providing for increased debt capacity at certain of our subsidiaries, which could occur within the next 12 months.

None of these transactions, negotiations or financings are definitive or included within our planned liquidity needs.

We cannot assure if or when any such transaction will be consummated or the terms of any such transaction.

Our principal sources of liquidity to fund these uses have been and continue to be (i) cash and restricted cash on hand as of March 31, 2024, (ii) revenues from our infrastructure business net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales.

• Cash flows used in operating activities were $3.9 million and $12.1 million during the three months ended March 31, 2024 and 2023, respectively.

• During the three months ended March 31, 2024, no additional borrowings were obtained and we did not make any principal repayments of debt.

During the three months ended March 31, 2023, additional borrowings were obtained in connection with the (i) Transtar Revolver of $40.0 million and (ii) EB-5 Loan Agreement of $1.6 million.

• Proceeds from the sale of assets were $— million a nd $0.1 million during the three months ended March 31, 2024 and 2023, respectively.

Historical Cash Flow

Comparison of the nine months ended September 30, 2023 and 2022

The following table compares the historical cash flow for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

Comparison of the three months ended March 31, 2024 and 2023

The following table compares the historical cash flow for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

(in thousands) 2024 2023

2 unchanged sentences

Net cash used in investing activities (18,846) (66,842)

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

Net cash used in operating activities decreased $35.5 million, which primarily refle cts certain adjustments to reconcile net loss to cash used in operating activities including (i) a decrease in our net loss of $11.6 million, (ii) changes in working capital of $46.2 million, (iii) changes in depreciation and amortization of $8.1 million, (iv) changes in equity-based compensation of $2.8 million, (v) a loss on extinguishment of debt of $2.0 million, and (vi) changes in fair value of non-hedge derivatives of $2.2 million, partially offset by (vii) equity in losses of unconsolidated entities of $40.8 million.

Net cash used in investing activities decreased $55.9 million, primarily due to (i) a decrease in the acquisition of property, plant and equipment of $93.5 million, partially offset by (ii) an investment of convertible promissory notes and loans of $31.0 million and (iii) a decrease in the proceeds from sale of property, plant and equipment of $4.5 million.

Net cash provided by financing activities decreased $57.8 million, primarily due to (i) a decrease in proceeds from debt of $320.3 million, (ii) cash dividends paid of $9.3 million, (iii) a decrease in proceeds from issuance of redeemable preferred stock of $291.0 million and (iv) repayment of debt proceeds of $75.1 million, partially offset by (v) a decrease in net contributions from Former Parent of $617.3 million, (vi) a decrease in redeemable preferred stock issuance costs of $16.4 million, and (vii) a decrease in payment of deferred financing costs of $6.3 million.

Net cash (used in) provided by financing activities (454) 37,777

Net cash used in operating activities decreased $8.3 million, which primarily reflects certain adjustments to reconcile net loss to cash used in operating activities including (i) equity in losses of unconsolidated entities of $16.3 million, (ii) changes in working capital of $4.9 million, (iii) changes in depreciation and amortization of $0.4 million, (iv) changes in equity-based compensation of $1.4 million and (v) changes in amortization of deferred financing costs of $0.5 million, partially offset by (i) an increase in our net loss of $14.4 million and (ii) changes in fair value of non-hedge derivatives of $1.1 million.

Net cash used in investing activities decreased $48.0 million, primarily due to (i) a decrease in the acquisition of property, plant and equipment of $27.0 million and (ii) a decrease in the investment in promissory notes and loans of $20.5 million.

Net cash used in financing activities increased $38.2 million, primarily due to (i) a decrease in proceeds from debt of $41.6 million and (ii) a decrease in settlement of equity-based compensation of $0.1 million, partially offset by (i) a decrease in cash dividends paid of $3.1 million and (ii) a decrease in payment of deferred financing costs of $0.4 million.

Debt Obligations

Refer to Note 7 of the consolidated and combined consolidated financial statements for additional information.

Refer to Note 7 of the consolidated financial statements for additional information.

Contractual Obligations

Our material cash requirements include the following contractual and other obligations:

Debt Obligations — As of September 30, 2023, we had outstanding principal and interest payment obligations of $1.4 billion and $0.5 billion, respectively, of which, $— million and $87.8 million, respectively, are due in the next twelve months.

See Note 7 to the consolidated and combined consolidated financial statements for additional information about our debt obligations.

Lease Obligations —As of September 30, 2023, we had outstanding operating and finance lease obligations of $168.4 million, of which $8.5 million is due in the next twelve months.

Redeemable Preferred Stock Obligations —We are required to m ake a $1.8 million cas h dividend payment on our redeemable preferred stock in the next twelve months.

Debt Obligations — As of March 31, 2024, we had outstanding principal and interest payment obligations of $1.4 billion and $0.5 billion, respectively, of which, $79.1 million and $90.1 million, respectively, are due within the next twelve months.

See Note 7 to the consolidated financial statements for additional information about our debt obligations.

Lease Obligations —As of March 31, 2024, we had outstanding operating and finance lease obligations of $166.5 million, of which $8.2 million is due within the next twelve months.

Redeemable Preferred Stock Obligations —We have dividend payments of $38.6 million due on our redeemable preferred stock within the next twelve months with an option to paid-in-kind dividends at a higher interest rate and to defer payment for twelve months.

See Note 15 for additional information related to our preferred stock obligations.

Other Cash Requirements —In addition to our contractual obligations, we intend to pay quarterly cash dividends on our common stock, which are subject to change at the discretion of our board of directors.

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

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

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

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

We expect to meet our future short-term liquidity requirements through cash on hand or future financings and net cash provided by our current operations.

We expect to meet our future short-term liquidity requirements through cash on hand, unused borrowing capacity or future financings and net cash provided by our current operations.

We expect that our operating subsidiaries will generate sufficient cash flow to cover operating expenses and the payment of principal and interest on our indebtedness as they become due.

1 unchanged sentence

Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required.

See Note 2 for additional information related to other cash requirements.

Critical Accounting Estimates and Policies

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 September 30, 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, 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.

10 unchanged sentences

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.

2 unchanged sentences

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

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, 2022.

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

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

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.

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.

1 unchanged sentence

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 commenced.

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.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis