Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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. (“we”, “us”, “our”, or the “Company”). Our MD&A should be read in conjunction with our consolidated and combined consolidated financial statements and the accompanying notes, and with Part I, Item 1A, “Risk Factors” and “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.
Overview
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.”
Our operations consist of four primary business lines: (i) Railroad, (ii) Ports and Terminals, (iii) Power and Gas and (iv) Sustainability and Energy Transition. Our Railroad business primarily invests in and operates short line and regional railroads in North America. Our Ports and Terminals business, consisting of our Jefferson Terminal and Repauno segments, develops or acquires industrial properties in strategic locations that store and handle for third parties a variety of energy products, including crude oil, refined products and clean fuels. Through an equity method investment, our Power and Gas business develops and operates facilities, such as a 485-megawatt power plant at the Long Ridge terminal in Ohio, that leverage the property’s location and key attributes to generate incremental value. Our Sustainability and Energy Transition business focuses on investments in companies and assets that utilize green technology, produce sustainable fuels and products or enable customers to reduce their carbon footprint. For the year ended December 31, 2024, our Railroad business accounted for 54% of our total revenue and our Ports and Terminals business accounted for 29% of our total revenue. Corporate and other sources accounted for the remaining 17% of our total revenue.
We expect to continue to invest in such market sectors and pursue additional investment opportunities in other infrastructure businesses and assets we believe to be attractive and meet our investment objectives. Our team focuses on acquiring a diverse group of long-lived assets or operating businesses that provide mission-critical services or functions to infrastructure networks and typically have high barriers to entry, strong margins, stable cash flows and upside from earnings growth and asset appreciation driven by increased use and inflation. We believe that there are a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital and generally available capital for infrastructure projects in today’s marketplace, will allow us to take advantage of these opportunities. As of December 31, 2024, we had total consolidated assets of $2.4 billion and redeemable preferred stock and equity of $0.5 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 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 this segment reporting structure.
Our reportable segments represent strategic business units comprised of investments in different types of infrastructure assets. We have five reportable segments which operate in infrastructure businesses across several market sectors, all in North America. 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 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 multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities. The Power and Gas segment is comprised of an equity method investment in Long Ridge, which is a 1,660-acre multi-modal terminal located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant in operation. The Sustainability and Energy Transition segment is comprised of Aleon/Gladieux, Clean Planet, and CarbonFree, and all three investments are development stage businesses focused on sustainability and recycling.
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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 operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.
Our Manager
On May 14, 2024, certain members of Fortress management and affiliates of Mubadala Investment Company, through its wholly owned asset management subsidiary, Mubadala Capital (“Mubadala”), completed their acquisition of 100% of the equity of Fortress. Fortress continues to operate as an independent investment manager under the Fortress brand, with autonomy over investment processes and decision making, personnel and operations.
Results of Operations
Adjusted EBITDA (Non-GAAP)
The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). 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 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, as defined by U.S. GAAP, is the most appropriate earnings measure with which to reconcile Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to stockholders as determined in accordance with U.S. GAAP.
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The following table presents our consolidated and combined consolidated results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23
'23 vs ‘22
Revenues
Lease income $ 4,963 $ 3,089 $ 3,221 $ 1,874 $ (132)
Rail revenues 178,243 167,793 147,804 10,450 19,989
Terminal services revenues 93,259 83,350 59,574 9,909 23,776
Roadside services revenues 55,000 68,190 47,899 (13,190) 20,291
Other revenue 32 (1,950) 3,468 1,982 (5,418)
Total revenues 331,497 320,472 261,966 11,025 58,506
Expenses
Operating expenses 247,674 253,672 208,157 (5,998) 45,515
General and administrative 14,798 12,833 10,891 1,965 1,942
Acquisition and transaction expenses 5,457 4,140 16,844 1,317 (12,704)
Management fees and incentive allocation to affiliate 11,318 12,467 12,964 (1,149) (497)
Depreciation and amortization 79,410 80,992 70,749 (1,582) 10,243
Asset impairment 72,336 743 — 71,593 743
Total expenses 430,993 364,847 319,605 66,146 45,242
Other (expense) income
Equity in losses of unconsolidated entities (55,496) (24,707) (67,399) (30,789) 42,692
Gain (loss) on sale of assets, net 2,370 6,855 (1,603) (4,485) 8,458
Loss on modification or extinguishment of debt (8,925) (2,036) — (6,889) (2,036)
Interest expense (122,108) (99,603) (53,239) (22,505) (46,364)
Other income (expense) 20,904 6,586 (3,169) 14,318 9,755
Total other expense (163,255) (112,905) (125,410) (50,350) 12,505
Loss before income taxes (262,751) (157,280) (183,049) (105,471) 25,769
Provision for income taxes 3,313 2,470 4,468 843 (1,998)
Net loss (266,064) (159,750) (187,517) (106,314) 27,767
Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (42,419) (38,414) (33,933) (4,005) (4,481)
Less: Dividends and accretion of redeemable preferred stock 70,814 62,400 23,657 8,414 38,743
Net loss attributable to stockholders/Former Parent $ (294,459) $ (183,736) $ (177,241) $ (110,723) $ (6,495)
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The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net loss attributable to stockholders/Former Parent $ (294,459) $ (183,736) $ (177,241) $ (110,723) $ (6,495)
Add: Provision for income taxes 3,313 2,470 4,468 843 (1,998)
Add: Equity-based compensation expense 8,636 9,199 4,146 (563) 5,053
Add: Acquisition and transaction expenses 5,457 4,140 16,844 1,317 (12,704)
Add: Losses on the modification or extinguishment of debt and capital lease obligations 8,925 2,036 — 6,889 2,036
Add: Changes in fair value of non-hedge derivative instruments — 1,125 (1,125) (1,125) 2,250
Add: Asset impairment charges 70,401 743 — 69,658 743
Add: Incentive allocations — — — — —
Add: Depreciation & amortization expense (1)
83,885 81,541 70,749 2,344 10,792
Add: Interest expense 122,108 99,603 53,239 22,505 46,364
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
20,272 20,209 13,939 63 6,270
Add: Dividends and accretion of redeemable preferred stock 70,814 62,400 23,657 8,414 38,743
Add: Interest and other costs on pension and OPEB liabilities (66) 2,130 1,232 (2,196) 898
Add: Other non-recurring items (3)
— 2,470 — (2,470) 2,470
Less: Equity in losses of unconsolidated entities 55,496 24,707 67,399 30,789 (42,692)
Less: Non-controlling share of Adjusted EBITDA (4)
(27,194) (21,515) (16,279) (5,679) (5,236)
Adjusted EBITDA (Non-GAAP) $ 127,588 $ 107,522 $ 61,028 $ 20,066 $ 46,494
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(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) depreciation and amortization expense of $79,410, $80,992 and $70,749 and (ii) capitalized contract costs amortization of $4,475, $549 and $—, respectively.
(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $(55,656), $(23,752) and $(67,658), (ii) interest expense of $43,549, $34,686 and $28,702, (iii) depreciation and amortization expense of $28,115, $27,685 and $28,399, (iv) acquisition and transaction expenses of $209, $445 and $616, (v) changes in fair value of non-hedge derivative instruments of $(1,488), $(18,904) and $21,218, (vi) asset impairment of $274, $1,135 and $2,280, (vii) equity-based compensation of $2, $5 and $382, (viii) loss on modification or extinguishment of debt of $4,724, $— and $—, (ix) equity method basis adjustments of $65, $(1,091) and $— and (x) other non-recurring items of $478, $— and $—, respectively.
(3) Includes the following items for the year ended December 31, 2023: certain non-cash expenses related to the cancellation of restricted shares and Railroad severance expense of $2,470.
(4) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) equity-based compensation of $1,127, $1,412 and $470, (ii) (benefit from) provision for income taxes of $(510), $578 and $670, (iii) interest expense of $11,555, $7,391 and $5,491, (iv) depreciation and amortization expense of $12,930, $11,752 and $9,699, (v) changes in fair value of non-hedge derivative instruments of $—, $63 and $(53), (vi) acquisition and transaction expenses of $7, $307 and $1, (vii) interest and other costs on pension and OPEB liabilities of $(1), $6, and $1, (viii) asset impairment of $—, $2 and $—, (ix) loss on modification or extinguishment of debt of $2,086, $— and $— and (x) other non-recurring items of $—, $4 and $—, respectively.
Comparison of the years ended December 31, 2024 and 2023
Revenues
Total revenues increased $11.0 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Repauno segments.
• Rail revenue increased $10.5 million due to an increase in both carloads and rates per car; and
• Terminal services revenue increased $9.9 million due to higher throughput volumes at Jefferson Terminal and the commencement of a butane throughput contract at Repauno in April 2023; partially offset by
• Roadside services revenue decreased $13.2 million due to a decrease in roadside services at FYX.
Expenses
Total expenses decreased $66.1 million primarily due to a decrease in (i) operating expenses, (ii) depreciation and amortization and (iii) asset impairment, offset by an increase in (iv) general and administrative expense and (v) acquisition and transaction expenses.
Operating expenses decreased $6.0 million primarily due to:
• a decrease of $15.6 million in the Corporate and Other segment primarily due to a decrease in roadside services at FYX; partially offset by
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• an increase of $4.2 million in the Railroad segment primarily due to increased carloads;
• an increase of $1.3 million at Repauno which primarily reflects an increase in compensation and benefits due to costs associated with equity-based compensation, as well as an increase in labor costs and professional fees related to the continued development of the site; and
• an increase of $4.6 million at Jefferson Terminal which primarily reflects an increase in costs associated with equity-based compensation, as well as higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity.
Depreciation and amortization decreased $1.6 million which primarily reflects certain assets becoming fully depreciated at the Jefferson Terminal and Corporate and Other segments.
Asset impairment increased $71.6 million due to the impairment of our investment in GM-FTAI Holdco LLC in the Sustainability and Energy Transition segment, partially offset by certain scrap assets that were written off in 2023 in the Railroad segment.
General and administrative increased $2.0 million primarily due to higher professional fees in the Corporate and Other segment.
Acquisition and transaction expenses increased $1.3 million primarily due to increased consulting fees in the Power and Gas segment.
Other (expense) income
Total other expense increased $50.4 million which primarily reflects:
• an increase in equity in losses of unconsolidated entities of $30.8 million which primarily reflects a decrease in unrealized gains on power swaps at Long Ridge Energy & Power LLC, as well as higher operating losses at GM-FTAI Holdco LLC in the Sustainability and Energy Transition segment;
• a decrease in gain on the sale of assets of $4.5 million primarily due to a gain recognized at Jefferson Terminal, offset by a loss recognized in the Railroad segment;
• an increase in interest expense of $22.5 million primarily due to an increase in the average outstanding debt of approximately $178.4 million which consists of (i) $49.1 million for the Senior Notes due 2027, (ii) $17.6 million for the DRP Revolver and (iii) $136.6 million for the Series 2024 Bonds as well as the Barclay’s loan, offset by the full repayment of the Transtar Revolver in July 2023 for $50.0 million; and
• an increase in loss on modification or extinguishment of debt of $6.9 million at Jefferson Terminal; offset by
• an increase in other income of $14.3 million primarily due to (i) interest income from an increased loan balance under the loan agreement between the Company and Long Ridge Energy & Power LLC, (ii) pension and OPEB benefits due to favorable adjustments in the Railroad segment and (iii) a benefit from the decrease in prior period losses related to the termination of a pipeline contract at Jefferson Terminal.
Dividends and accretion of redeemable preferred stock
Dividends and accretion of redeemable preferred stock increased $8.4 million due to continued accretion of our redeemable preferred stock balance for the year.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $20.1 million primarily due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022
Revenues
Total revenues increased $58.5 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Corporate and Other segments.
• Rail revenue increased $20.0 million due to (i) an increase in both carloads and rates per car and (ii) a full year of fuel surcharges in 2023 compared to a partial year of fuel surcharges that went into effect at the beginning of the second quarter in 2022;
• Terminal services revenue increased $23.8 million due to higher throughput volumes at Jefferson Terminal and the commencement of a butane throughput contract at Repauno in April 2023; and
• Roadside services revenue increased $20.3 million due to the acquisition and consolidation of FYX in May 2022, in addition to FYX price increases during the year.
Expenses
Total expenses increased $45.2 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.
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Operating expenses increased $45.5 million primarily due to:
• an increase of $20.2 million in the Corporate and Other segment primarily due to the acquisition and consolidation of FYX in May 2022;
• an increase of $8.1 million in the Railroad segment primarily due to (i) an increase in labor and other costs associated with higher carload activity and severance costs at Transtar and (ii) an increase in repairs and maintenance expense due to increased activity at Transtar;
• an increase of $5.1 million at Repauno which primarily reflects (i) an increase in compensation and benefits due to costs associated with equity-based compensation and (ii) an increase in labor costs and professional fees related to the continued development of the site;
• an increase of $10.2 million at Jefferson Terminal which primarily reflects (i) an increase in compensation and benefits due to costs associated with equity-based compensation and (ii) an increase in repairs and maintenance expense due to increased activity at Jefferson Terminal; and
• an increase of $1.9 million at Power and Gas primarily due to an increase in professional fees.
Depreciation and amortization increased $10.2 million which primarily reflects (i) additional assets placed into service at Jefferson Terminal and (ii) the acquisition and consolidation of FYX in May 2022.
General and administrative increased $1.9 million primarily due to higher professional fees in the Corporate and Other segment.
Acquisition and transaction expenses decreased $12.7 million primarily due to expenses incurred in 2022 related to the Spin-off.
Other (expense) income
Total other expense decreased $12.5 million which primarily reflects:
• a decrease in equity in losses of unconsolidated entities of $42.7 million which primarily reflects unrealized gains on power swaps at Long Ridge partially offset by operating losses at GM-FTAI Holdco LLC in the Sustainability and Energy Transition segment;
• an increase in gain on the sale of assets of $8.5 million due to a gain on a sales-type lease and a gain from the sale of land at Jefferson Terminal; and
• an increase in other income of $9.8 million primarily due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy & Power LLC; partially offset by
• an increase in interest expense of $46.4 million primarily due to an increase in the average outstanding debt of approximately $397.1 million which consists of (i) $327 million for the Senior Notes due 2027, (ii) $24.2 million for the Transtar Revolver, (iii) $25.5 million for the EB-5 Loan Agreement and (iv) $4.1 million for the Credit Agreement; and
• 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.
Dividends and accretion of redeemable preferred stock
Dividends and accretion of redeemable preferred stock increased $38.7 million due to the redeemable preferred stock raise completed in August 2022.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $46.5 million primarily due to the changes noted above.
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Railroad Segment
The following table presents our results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Revenues
Lease income $ 1,784 $ 1,652 $ 1,943 $ 132 $ (291)
Rail revenues 178,243 167,793 147,718 10,450 20,075
Total revenues 180,027 169,445 149,661 10,582 19,784
Expenses
Operating expenses 97,207 92,972 84,863 4,235 8,109
Acquisition and transaction expenses 526 737 763 (211) (26)
Depreciation and amortization 20,200 19,590 20,164 610 (574)
Asset impairment — 743 — (743) 743
Total expenses 117,933 114,042 105,790 3,891 8,252
Other (expense) income
Loss on sale of assets, net (704) (437) (1,603) (267) 1,166
Loss on extinguishment of debt — (937) — 937 (937)
Interest expense (306) (2,284) (212) 1,978 (2,072)
Other income (expense) 770 (2,164) (1,632) 2,934 (532)
Total other expense (240) (5,822) (3,447) 5,582 (2,375)
Income before income taxes 61,854 49,581 40,424 12,273 9,157
Provision for (benefit from) income taxes 4,692 (561) 1,287 5,253 (1,848)
Net income 57,162 50,142 39,137 7,020 11,005
Less: Net income attributable to non-controlling interest in consolidated subsidiaries 245 143 15 102 128
Net income attributable to stockholders/Former Parent $ 56,917 $ 49,999 $ 39,122 $ 6,918 $ 10,877
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The following table sets forth a reconciliation of net income attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net income attributable to stockholders/Former Parent $ 56,917 $ 49,999 $ 39,122 $ 6,918 10,877
Add: Provision for (benefit from) income taxes 4,692 (561) 1,287 5,253 (1,848)
Add: Equity-based compensation expense 1,801 1,394 1,531 407 (137)
Add: Acquisition and transaction expenses 526 737 763 (211) (26)
Add: Losses on the modification or extinguishment of debt and capital lease obligations — 937 — (937) 937
Add: Changes in fair value of non-hedge derivative instruments — — — — —
Add: Asset impairment charges — 743 — (743) 743
Add: Incentive allocations — — — — —
Add: Depreciation & amortization expense 20,200 19,590 20,164 610 (574)
Add: Interest expense 306 2,284 212 (1,978) 2,072
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — —
Add: Dividends and accretion of redeemable preferred stock — — — — —
Add: Interest and other costs on pension and OPEB liabilities (66) 2,130 1,232 (2,196) 898
Add: Other non-recurring items (1)
— 1,339 — (1,339) 1,339
Less: Equity in losses of unconsolidated entities — — — — —
Less: Non-controlling share of Adjusted EBITDA (2)
(122) (71) (25) (51) (46)
Adjusted EBITDA (Non-GAAP) $ 84,254 $ 78,521 $ 64,286 $ 5,733 $ 14,235
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(1) Includes the following items for the year ended December 31, 2023: Railroad severance expense of $1,339.
(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) equity-based compensation of $9, $4 and $2, (ii) provision for (benefit from) income taxes of $22, $(1) and $2, (iii) acquisition and transaction expenses of $2, $1 and $1, (iv) interest and other costs on pension and OPEB liabilities of $(1), $6 and $1, (v) depreciation and amortization expense of $88, $49 and $19, (vi) interest expense of $2, $6 and $—, (vii) asset impairment of $—, $2 and $— and (viii) other non-recurring items of $—, $4 and $—, respectively.
Comparison of the years ended December 31, 2024 and 2023
Revenues
Total revenues increased $10.6 million which is primarily due to both an increase in carloads and rates per car.
Expenses
Total expenses increased $3.9 million which is primarily due to the increase in operating expense of $4.2 million due to increased carloads, partially offset by a decrease in asset impairment of $0.7 million for certain scrap assets written off in 2023.
Other (expense) income
Total other expense decreased $5.6 million which primarily reflects a decrease in interest expense and loss on extinguishment of debt related to the revolver entered into in the fourth quarter of 2022 and paid off in the third quarter of 2023, as well as an increase in other income related to pension and OPEB benefits due to favorable adjustments.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $5.7 million due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022
Revenues
Total revenues increased $19.8 million which is primarily due to both an increase in (i) carloads and rates per car and (ii) a full year of fuel surcharges in 2023 compared to a partial year of fuel surcharges that went into effect at the beginning of the second quarter in 2022.
Expenses
Total expenses increased $8.3 million which is primarily due to the increase in operating expense of $8.1 million due to (i) an increase in compensation, benefits and other costs associated with higher carload activity and severance costs and (ii) repairs and maintenance from increased transloading activity.
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Other expense
Total other expense increased $2.4 million which primarily reflects an increase in interest expense due to a higher outstanding balance on the revolver and an increase in interest rate during 2023.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $14.2 million due to the changes noted above.
Jefferson Terminal Segment
The following table presents our results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Revenues
Lease income $ 3,179 $ 1,437 $ 1,278 $ 1,742 $ 159
Terminal services revenues 77,467 70,709 59,011 6,758 11,698
Total revenues 80,646 72,146 60,289 8,500 11,857
Expenses
Operating expenses 71,203 66,576 56,417 4,627 10,159
Acquisition and transaction expenses 23 1,370 64 (1,347) 1,306
Depreciation and amortization 47,872 48,916 39,318 (1,044) 9,598
Total expenses 119,098 116,862 95,799 2,236 21,063
Other income (expense)
Gain on sale of assets, net 3,074 7,292 — (4,218) 7,292
Loss on modification or extinguishment of debt (8,925) — — (8,925) —
Interest expense (49,001) (32,443) (24,798) (16,558) (7,645)
Other income (expense) 5,515 (1,302) (4,317) 6,817 3,015
Total other expense (49,337) (26,453) (29,115) (22,884) 2,662
Loss before income taxes (87,789) (71,169) (64,625) (16,620) (6,544)
(Benefit from) provision for income taxes (1,667) 2,468 3,016 (4,135) (548)
Net loss (86,122) (73,637) (67,641) (12,485) (5,996)
Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (41,491) (36,917) (32,018) (4,574) (4,899)
Net loss attributable to stockholders/Former Parent $ (44,631) $ (36,720) $ (35,623) $ (7,911) $ (1,097)
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The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net loss attributable to stockholders/Former Parent $ (44,631) $ (36,720) $ (35,623) $ (7,911) $ (1,097)
Add: (Benefit from) provision for income taxes (1,667) 2,468 3,016 (4,135) (548)
Add: Equity-based compensation expense 4,233 5,865 2,020 (1,632) 3,845
Add: Acquisition and transaction expenses 23 1,370 64 (1,347) 1,306
Add: Losses on the modification or extinguishment of debt and capital lease obligations 8,925 — — 8,925 —
Add: Changes in fair value of non-hedge derivative instruments — — — — —
Add: Asset impairment charges — — — — —
Add: Incentive allocations — — — — —
Add: Depreciation and amortization expense (1)
52,347 49,465 39,318 2,882 10,147
Add: Interest expense 49,001 32,443 24,798 16,558 7,645
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — —
Add: Dividends and accretion of redeemable preferred stock — — — — —
Add: Interest and other costs on pension and OPEB liabilities — — — — —
Add: Other non-recurring items (2)
— 1,131 — (1,131) 1,131
Less: Equity in losses of unconsolidated entities — — — — —
Less: Non-controlling share of Adjusted EBITDA (3)
(26,264) (20,328) (15,103) (5,936) (5,225)
Adjusted EBITDA (Non-GAAP) $ 41,967 $ 35,694 $ 18,490 $ 6,273 $ 17,204
______________________________________________________________________________________
(1) Includes the following items for the years ended December 31, 2024, 2023, and 2022: (i) depreciation and amortization expense of $47,872, $48,916 and $39,318 and (ii) capitalized contract costs amortization of $4,475, $549 and $—, respectively.
(2) Includes the following items for the year ended December 31, 2023: certain non-cash expenses related to the cancellation of restricted shares of $1,131.
(3) Includes the following items for the years ended December 31, 2024, 2023, and 2022: (i) equity-based compensation of $989, $1,309 and $440, (ii) (benefit from) provision for income taxes of $(506), $551 and $660, (iii) interest expense of $11,454, $7,242 and $5,416, (iv) acquisition and transaction expenses of $5, $306 and $—, (v) depreciation and amortization expense of $12,236, $10,920 and $8,587 and (vi) loss on modification or extinguishment of debt of $2,086, $— and $—, respectively.
Comparison of the years ended December 31, 2024 and 2023
Revenues
Total revenues increased $8.5 million during the year ended December 31, 2024 primarily due to (i) an increase in terminal services revenues of $6.8 million due to an increase in average crude oil throughput volumes and (ii) an increase in lease income of $1.7 million.
Expenses
Total expenses increased $2.2 million which reflects:
• an increase in operating expenses of $4.6 million primarily due to costs associated with equity-based compensation, higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity; offset by
• a decrease in depreciation and amortization of $1.0 million due to certain assets becoming fully depreciated; and
• a decrease in acquisition and transaction expenses of $1.3 million associated with professional fees incurred in the prior year for a potential acquisition.
Other income (expense)
Total other expense increased $22.9 million which primarily reflects (i) an $8.9 million loss on modification or extinguishment of debt, (ii) an increase in interest expense of $16.6 million related to additional borrowings during the current year and (iii) a $4.2 million decrease in gain on sale of assets, offset by an increase in other income of $6.8 million due to current year gains from the grant of a pipeline easement and sales leaseback transaction, as well as a benefit from the decrease in prior year losses related to the termination of a pipeline contract.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $6.3 million primarily due to the changes noted above.
44
Comparison of the years ended December 31, 2023 and 2022
Revenues
Total revenues increased $11.9 million primarily due to (i) an increase in terminal services revenues of $11.7 million due to an increase in average refined products throughput volumes and (ii) an increase in lease income of $0.2 million.
Expenses
Total expenses increased $21.1 million which reflects:
• an increase in operating expenses of $10.2 million primarily due to costs associated with equity-based compensation, higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity ;
• an increase in depreciation and amortization of $9.6 million due to additional assets placed into service; and
• an increase in acquisition and transaction expenses of $1.3 million associated with professional fees for a potential acquisition.
Other income (expense)
Total other expense decreased $2.7 million which primarily reflects (i) a benefit from the decrease in prior period losses related to the termination of a pipeline contract, (ii) a gain on the sales-type lease and (iii) a gain from the sale of land, partially offset by an increase in interest expense due to additional borrowings for the EB-5 Loan Agreement.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $17.2 million primarily due to the changes noted above.
Repauno Segment
The following table presents our results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Revenues
Rail revenues $ — $ — $ 86 $ — $ (86)
Terminal services revenues 15,792 12,641 563 3,151 12,078
Other revenue 32 (1,950) 3,468 1,982 (5,418)
Total revenues 15,824 10,691 4,117 5,133 6,574
Expenses
Operating expenses 23,483 22,203 17,072 1,280 5,131
Depreciation and amortization 9,914 9,336 9,322 578 14
Total expenses 33,397 31,539 26,394 1,858 5,145
Other expense
Interest expense (1,617) (2,557) (1,590) 940 (967)
Total other expense (1,617) (2,557) (1,590) 940 (967)
Loss before income taxes (19,190) (23,405) (23,867) 4,215 462
(Benefit from) provision for income taxes (431) 496 165 (927) 331
Net loss (18,759) (23,901) (24,032) 5,142 131
Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (1,173) (1,412) (1,242) 239 (170)
Net loss attributable to stockholders/Former Parent $ (17,586) $ (22,489) $ (22,790) $ 4,903 $ 301
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The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net loss attributable to stockholders/Former Parent $ (17,586) $ (22,489) $ (22,790) $ 4,903 $ 301
Add: (Benefit from) provision for income taxes (431) 496 165 (927) 331
Add: Equity-based compensation expense 2,108 1,770 595 338 1,175
Add: Acquisition and transaction expenses — — — — —
Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — —
Add: Changes in fair value of non-hedge derivative instruments — 1,125 (1,125) (1,125) 2,250
Add: Asset impairment charges — — — — —
Add: Incentive allocations — — — — —
Add: Depreciation and amortization expense 9,914 9,336 9,322 578 14
Add: Interest expense 1,617 2,557 1,590 (940) 967
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — —
Add: Dividends and accretion of redeemable preferred stock — — — — —
Add: Interest and other costs on pension and OPEB liabilities — — — — —
Add: Other non-recurring items — — — — —
Less: Equity in losses of unconsolidated entities — — — — —
Less: Non-controlling share of Adjusted EBITDA (1)
(808) (856) (500) 48 (356)
Adjusted EBITDA (Non-GAAP) $ (5,186) $ (8,061) $ (12,743) $ 2,875 $ 4,682
______________________________________________________________________________________
(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) equity-based compensation of $129, $99 and $28, (ii) (benefit from) provision for income taxes of $(26), $28 and $8, (iii) interest expense of $99, $143 and $75, (iv) depreciation and amortization expense of $606, $523 and $442, and (v) changes in fair value of non-hedge derivative instruments of $—, $63 and $(53), respectively.
Comparison of the years ended December 31, 2024 and 2023
Revenues
Total revenues increased $5.1 million, primarily due to the commencement of a butane throughput contract in April 2023, partially offset by losses in the prior year related to the sale of butane inventory as the terminal prepared for the new throughput contract.
Expenses
Total expenses increased $1.9 million primarily due to (i) an increase in operating expenses due to costs associated with stock-based compensation, (ii) an increase in depreciation expense due to assets being placed into service and (iii) an increase in labor costs and professional fees related to the continued development of the site.
Other expense
Total other expense decreased $0.9 million primarily due to 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 $2.9 million due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022
Revenues
Total revenues increased $6.6 million, primarily due to the commencement of a butane throughput contract at Repauno in April 2023, partially offset by losses on the sale of butane inventory as the terminal prepared for the new throughput contract.
Expenses
Total expenses increased $5.1 million primarily due to (i) an increase in operating expenses due to costs associated with equity-based compensation and (ii) an increase in labor costs and professional fees related to the continued development of the site.
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Other income (expense)
Total other expense increased $1.0 million primarily due to an increase in interest expense due to an increase in the borrowing rate on the revolver.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $4.7 million due to the changes noted above.
Power and Gas Segment
The following table presents our results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Revenues
Other revenue $ — $ — $ — $ — $ —
Total revenues — — — — —
Expenses
Operating expenses 2,190 2,726 826 (536) 1,900
Acquisition and transaction expenses 2,293 94 458 2,199 (364)
Total expenses 4,483 2,820 1,284 1,663 1,536
Other (expense) income
Equity in losses of unconsolidated entities (37,146) (9,949) (60,538) (27,197) 50,589
Interest expense — (3) — 3 (3)
Other income 12,430 7,523 524 4,907 6,999
Total other expense (24,716) (2,429) (60,014) (22,287) 57,585
Net loss attributable to stockholders/Former Parent $ (29,199) $ (5,249) $ (61,298) $ (23,950) $ 56,049
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The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net loss attributable to stockholders/Former Parent $ (29,199) $ (5,249) $ (61,298) $ (23,950) $ 56,049
Add: Provision for income taxes — — — — —
Add: Equity-based compensation expense — — — — —
Add: Acquisition and transaction expenses 2,293 94 458 2,199 (364)
Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — —
Add: Changes in fair value of non-hedge derivative instruments — — — — —
Add: Asset impairment charges — — — — —
Add: Incentive allocations — — — — —
Add: Depreciation and amortization expense — — — — —
Add: Interest expense — 3 — (3) 3
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)
30,006 29,987 18,341 19 11,646
Add: Dividends and accretion of redeemable preferred stock — — — — —
Add: Interest and other costs on pension and OPEB liabilities — — — — —
Add: Other non-recurring items — — — — —
Less: Equity in losses of unconsolidated entities 37,146 9,949 60,538 27,197 (50,589)
Less: Non-controlling share of Adjusted EBITDA — — — — —
Adjusted EBITDA (Non-GAAP) $ 40,246 $ 34,784 $ 18,039 $ 5,462 $ 16,745
______________________________________________________________________________________
(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $(37,211), $(8,858) and $(60,538), (ii) depreciation expense of $25,353, $26,146 and $27,625, (iii) interest expense of $37,600, $31,109 and $26,758, (iv) acquisition and transaction expense of $209, $445 and $616, (v) changes in fair value of non-hedge derivative instruments of $(1,488), $(18,904) and $21,218, (vi) asset impairment of $274, $1,135 and $2,280, (vii) equity-based compensation of $2, $5 and $382, (viii) loss on modification or extinguishment of debt of $4,724, $— and $—, (ix) equity method basis adjustments of $65, $(1,091) and $— and (x) other non-recurring items of $478, $— and $—, respectively.
Comparison of the years ended December 31, 2024 and 2023
Expenses
Total expenses increased $1.7 million primarily due to an increase in consulting fees.
Other (expense) income
Total other expense increased $22.3 million primarily due to increases in equity in losses in unconsolidated entities primarily due to a decrease in unrealized gains on power swaps at Long Ridge Energy & Power LLC and loss on extinguishment of debt at Long Ridge West Virginia LLC, partially offset by increases in other income 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 increased $5.5 million due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022
Expenses
Total expenses increased $1.5 million primarily due to an increase in professional fees.
Other (expense) income
Total other expenses decreased $57.6 million primarily due to decreases in equity in losses in unconsolidated entities primarily due to unrealized gains on power swaps at Long Ridge as power prices decreased, as well as increases 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 & Power LLC.
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Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $16.7 million due to an increase in the pro-rata share of Adjusted EBITDA from unconsolidated entities of $11.6 million, and the changes noted above.
Sustainability and Energy Transition Segment
The following table presents our results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Revenues
Other revenue $ — $ — $ — $ — $ —
Total revenues — — — — —
Expenses
Operating expenses 7 29 10 (22) 19
Acquisition and transaction expenses 17 1 280 16 (279)
Asset impairment 72,336 — — 72,336 —
Total expenses 72,360 30 290 72,330 (260)
Other (expense) income
Equity in losses of unconsolidated entities (18,390) (14,814) (7,012) (3,576) (7,802)
Other income 2,167 2,529 2,123 (362) 406
Total other expense (16,223) (12,285) (4,889) (3,938) (7,396)
Net loss attributable to stockholders/Former Parent $ (88,583) $ (12,315) $ (5,179) $ (76,268) $ (7,136)
The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net loss attributable to stockholders/Former Parent $ (88,583) $ (12,315) $ (5,179) $ (76,268) $ (7,136)
Add: Provision for income taxes — — — — —
Add: Equity-based compensation expense — — — — —
Add: Acquisition and transaction expenses 17 1 280 16 (279)
Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — —
Add: Changes in fair value of non-hedge derivative instruments — — — — —
Add: Asset impairment charges 70,401 — — 70,401 —
Add: Incentive allocations — — — — —
Add: Depreciation and amortization expense — — — — —
Add: Interest expense — — — — —
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)
(9,710) (9,753) (4,447) 43 (5,306)
Add: Dividends and accretion of redeemable preferred stock — — — — —
Add: Interest and other costs on pension and OPEB liabilities — — — — —
Add: Other non-recurring items — — — — —
Less: Equity in losses of unconsolidated entities 18,390 14,814 7,012 3,576 7,802
Less: Non-controlling share of Adjusted EBITDA — — — — —
Adjusted EBITDA (Non-GAAP) $ (9,485) $ (7,253) $ (2,334) $ (2,232) $ (4,919)
______________________________________________________________________________________
(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $(18,390), $(14,814) and $(7,069), (ii) depreciation expense of $2,762, $1,539 and $774, and (iii) interest expense of $5,918, $3,522 and $1,848, respectively.
49
Comparison of the years ended December 31, 2024 and 2023
Expenses
Total expenses increased $72.3 million primarily due to the impairment of our investment and the related note receivable in GM-FTAI Holdco LLC.
Other (expense) income
Total other expense increased $3.9 million which primarily reflects an increase of $3.6 million in equity in losses of unconsolidated entities primarily due to higher operating losses at GM-FTAI Holdco LLC.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA decreased $2.2 million primarily due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022
Other (expense) income
Total other expense increased $7.4 million which reflects an increase of $7.8 million in equity in losses of unconsolidated entities primarily due to operating losses at GM-FTAI Holdco LLC, offset by an increase in other income of $0.4 million due to interest income earned on outstanding notes.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA decreased $4.9 million primarily due to a decrease in the pro-rata share of Adjusted EBITDA from unconsolidated entities of $5.3 million, and the changes noted above.
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Corporate and Other
The following table presents our results of operations:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Revenues
Roadside services revenues $ 55,000 $ 68,190 $ 47,899 $ (13,190) $ 20,291
Total revenues 55,000 68,190 47,899 (13,190) 20,291
Expenses
Operating expenses 53,584 69,166 48,969 (15,582) 20,197
General and administrative 14,798 12,833 10,891 1,965 1,942
Acquisition and transaction expenses 2,598 1,938 15,279 660 (13,341)
Management fees and incentive allocation to affiliate 11,318 12,467 12,964 (1,149) (497)
Depreciation and amortization 1,424 3,150 1,945 (1,726) 1,205
Total expenses 83,722 99,554 90,048 (15,832) 9,506
Other income (expense)
Equity in earnings of unconsolidated entities 40 56 151 (16) (95)
Loss on extinguishment of debt — (1,099) — 1,099 (1,099)
Interest expense (71,184) (62,316) (26,639) (8,868) (35,677)
Other income 22 — 133 22 (133)
Total other expense (71,122) (63,359) (26,355) (7,763) (37,004)
Loss before income taxes (99,844) (94,723) (68,504) (5,121) (26,219)
Provision for income taxes 719 67 — 652 67
Net loss (100,563) (94,790) (68,504) (5,773) (26,286)
Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — (228) (688) 228 460
Less: Dividends and accretion of redeemable preferred stock 70,814 62,400 23,657 8,414 38,743
Net loss attributable to stockholders/Former Parent $ (171,377) $ (156,962) $ (91,473) $ (14,415) $ (65,489)
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The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA:
Year Ended December 31, Change
(in thousands) 2024 2023 2022 '24 vs ‘23 23 vs ‘22
Net loss attributable to stockholders/Former Parent $ (171,377) $ (156,962) $ (91,473) $ (14,415) $ (65,489)
Add: Provision for income taxes 719 67 — 652 67
Add: Equity-based compensation expense 494 170 — 324 170
Add: Acquisition and transaction expenses 2,598 1,938 15,279 660 (13,341)
Add: Losses on the modification or extinguishment of debt and capital lease obligations — 1,099 — (1,099) 1,099
Add: Changes in fair value of non-hedge derivative instruments — — — — —
Add: Asset impairment charges — — — — —
Add: Incentive allocations — — — — —
Add: Depreciation and amortization expense 1,424 3,150 1,945 (1,726) 1,205
Add: Interest expense 71,184 62,316 26,639 8,868 35,677
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)
(24) (25) 45 1 (70)
Add: Dividends and accretion of redeemable preferred stock 70,814 62,400 23,657 8,414 38,743
Add: Interest and other costs on pension and OPEB liabilities — — — — —
Add: Other non-recurring items — — — — —
Less: Equity in earnings of unconsolidated entities (40) (56) (151) 16 95
Less: Non-controlling share of Adjusted EBITDA (2)
— (260) (651) 260 391
Adjusted EBITDA (Non-GAAP) $ (24,208) $ (26,163) $ (24,710) $ 1,955 $ (1,453)
______________________________________________________________________________________
(1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $(55), $(80) and $(51) and (ii) interest expense of $31, $55 and $96, respectively.
(2) Includes the following items for the year ended December 31, 2024, 2023 and 2022: (i) depreciation expense of $—, $260 and $651, respectively.
Comparison of the years ended December 31, 2024 and 2023
Revenues
Total revenues decreased $13.2 million primarily due to a decrease in roadside services at FYX.
Expenses
Total expenses decreased $15.8 million primarily due to:
• a decrease in operating expenses of $15.6 million due to a decrease in roadside services at FYX; and
• a decrease in depreciation and amortization expense of $1.7 million due to assets that became fully depreciated; partially offset by
• an increase in general and administrative expense of $2.0 million primarily due to higher professional fees.
Other income (expense)
Total other expense increased $7.8 million due primarily to (i) an increase in interest expense of $8.9 million due to the additional issuance of the Senior Notes due 2027 in July 2023, partially offset by (ii) a decrease in loss on extinguishment of debt of $1.1 million due to repayment of amounts outstanding under the Credit Agreement in July 2023.
Dividends and accretion of redeemable preferred stock
Dividends and accretion of redeemable preferred stock increased $8.4 million due to continued accretion of our redeemable preferred stock balance for the year.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA increased $2.0 million primarily due to the changes noted above.
52
Comparison of the years ended December 31, 2023 and 2022
Revenues
Total revenues increased $20.3 million primarily due to the acquisition and consolidation of FYX in May 2022, in addition to FYX price increases during the year.
Expenses
Total expenses increased $9.5 million primarily due to:
• an increase in operating expenses of $20.2 million and an increase in depreciation and amortization expense of $1.2 million due to the acquisition and consolidation of FYX in May 2022; and
• an increase in general and administrative expense of $1.9 million primarily due to higher professional fees; partially offset by
• a decrease in acquisition and transaction expenses of $13.3 million primarily due to expenses incurred in 2022 related to the Spin-off.
Other income (expense)
Total other expense increased $37.0 million due primarily to (i) an increase in interest expense of $35.7 million due to the additional issuance of the Senior Notes due 2027 in July 2023 and (ii) an increase in loss on extinguishment of debt of $1.1 million .
Dividends and accretion of redeemable preferred stock
Dividends and accretion of redeemable preferred stock increased $38.7 million due to the redeemable preferred stock raise completed in August 2022.
Adjusted EBITDA (Non-GAAP)
Adjusted EBITDA decreased $1.5 million primarily due to the changes noted above.
Transactions with Affiliates and Affiliated Entities
We are managed by the Manager, an affiliate of Fortress, pursuant to our Management Agreement, which provides for us to bear obligations for management fees and expense reimbursements payable to the Manager. Pursuant to the terms of the Management Agreement, the Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors. Our Management Agreement has an initial six-year term and is automatically renewed for one-year terms thereafter unless terminated either by us or our Manager. For its services, our Manager is entitled to receive a management fee from us, payable monthly, that is based on the average value of our total equity (including redeemable preferred stock, but excluding non-controlling interests) determined on a consolidated basis in accordance with GAAP as of the last day of the two most recently completed months multiplied by an annual rate of 1.50%. In addition, we are obligated to reimburse certain expenses incurred by our Manager on our behalf.
Geographic Information
Please refer to Note 15 of our consolidated and combined consolidated financial statements for information by geographic area for each segment, all located in North America, of revenues from our external customers, for the years ended December 31, 2024, 2023 and 2022, as well as the geographic area for each segment of our total property, plant and equipment as of December 31, 2024 and 2023.
53
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. This includes limiting discretionary spending across the organization and re-prioritizing our capital projects.
As disclosed in Note 19, subsequent to December 31, 2024, the Company has (i) extended the maturity dates of its EB-5 and EB-5.2 Loan Agreements to January 25, 2027 and March 10, 2027, respectively, (ii) amended its October 2024 Jefferson Credit Agreement to include the option to extend its maturity date to April 1, 2026 and (iii) executed an additional loan agreement for $30.0 million at its Repauno segment that will be due July 18, 2025 and includes the option to extend its maturity date to April 1, 2026. Notwithstanding these actions, Management concluded that the Company’s current liquidity and forecasted cash flows from operations are not sufficient to meet its obligations as they become due, when including cash dividend payments on its Series A Preferred Stock. However, Management has approved a plan to accrue paid-in-kind dividends on the Series A Preferred Stock which would preclude the payment of future dividends on common stock, excluding the common dividend that our board of directors declared on February 27, 2025 that will be paid on March 26, 2025 (see Note 19). In addition, Management will exercise the options to extend the maturity dates of the debt instruments noted above, as needed. 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 financial statements were issued. Management will continue to evaluate its liquidity and financial position and update future plans accordingly.
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 $121.9 million, $147.2 million and $267.3 million during the years ended December 31, 2024, 2023 and 2022, 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 December 31, 2024 (ii) revenues from our infrastructure businesses net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales and an easement.
• During the year ended December 31, 2024, additional borrowings were obtained in connection with the (i) April 2024 Jefferson Credit Agreement of $75.0 million, (ii) Series 2024 Bond Offering of $382.3 million and (iii) October 2024 Jefferson Credit Agreement of $50.0 million. In June 2024, we used a portion of the net proceeds from the Series 2024 Bonds to (i) repay the Jefferson Credit Agreement of $75.0 million, (ii) fund the $108.0 million for the Tender Offer and (iii) refinance the Taxable Series 2020B Bonds of $79.1 million. In August 2024, we used a portion of the net proceeds from the Series 2024 Bonds to repurchase and cancel an additional $6.0 million of the Tax Exempt Series 2021A Bonds.
• During the year ended December 31, 2023, additional borrowings were obtained in connection with the (i) EB-5 Loan Agreement of $1.6 million, (ii) Transtar Revolver of $40.0 million, (iii) Credit Agreement of $25.0 million, (iv) 2027 Notes (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $100.0 million and (v) DRP Revolver of $19.3 million. In July 2023, we used a portion of the net proceeds from the additional $100.0 million aggregate principal amount of the 2027 Notes to repay the amounts outstanding under the Transtar Revolver and Credit Agreement in full.
• During the year ended December 31, 2022, additional borrowings were obtained in connection with the (i) 2027 Notes (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $473.8 million, (ii) Transtar Revolver of $10.0 million and (iii) EB-5.3 Loan Agreement of $26.4 million. We did not make any principal repayments of debt during the year ended December 31, 2022.
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. In addition, from time to time, we may seek to repay, refinance or restructure all or a portion of our debt or to repurchase or repay our outstanding debt through, as applicable, tender offers, exchange offers, open market purchases, privately negotiated transactions or otherwise. Such transactions, if any, will depend on a number of factors, including prevailing market conditions, our liquidity requirements and contractual requirements (including compliance with the terms of our debt agreements), among other factors.
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Historical Cash Flow
The following table presents our historical cash flow:
Year Ended December 31,
(in thousands) 2024 2023 2022
Cash Flow Data:
Net cash (used in) provided by operating activities $ (15,278) $ 5,513 $ (42,690)
Net cash used in investing activities (118,137) (147,123) (267,266)
Net cash provided by financing activities 193,232 79,447 157,743
Comparison of the years ended December 31, 2024 and 2023
Net cash used in operating activities increased $20.8 million, which primarily reflects (i) an increase in net loss of $106.3 million, (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $23.6 million, (iii) a decrease in depreciation and amortization of $1.6 million and (iv) an increase in gain on sale of easement of $3.5 million, partially offset by (v) a change in equity in losses of unconsolidated entities of $30.8 million, (vi) a decrease in gain on the sale of assets of $4.5 million, (vii) an increase in loss on modification or extinguishment of debt of $6.9 million and (viii) an increase in asset impairment of $71.6 million.
Net cash used in investing activities decreased $29.0 million primarily due to (i) a decrease in acquisitions of property, plant and equipment of $19.5 million, (ii) a decrease in investment in convertible promissory notes of $4.6 million, (iii) a decrease in cash used for the acquisition of business of $4.4 million, (iv) a decrease in the investment in unconsolidated entities of $3.3 million and (v) an increase in gain on sale of easement of $3.5 million, partially offset by (vi) an increase in the acquisition of leasing equipment of $1.6 million and (vii) an increase in investment in equity instruments of $5.0 million.
Net cash provided by financing activities increased $113.8 million primarily due to (i) an increase in proceeds from debt of $317.1 million, partially offset by (ii) repayment of debt proceeds of $172.5 million, (iii) an increase in settlement of equity-based compensation of $1.2 million, (iv) an increase in payment of deferred financing costs of $2.6 million, (v) an increase in cash dividends paid for Redeemable Preferred Stock of $12.9 million and (vi) an increase in distributions to non-controlling interests of $13.4 million.
Comparison of the years ended December 31, 2023 and 2022
Net cash provided by operating activities increased $48.2 million, which primarily reflects (i) a decrease in net loss of $27.8 million, (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $46.5 million, (iii) an increase in depreciation and amortization of $10.2 million, (iv) an increase in equity-based compensation of $5.1 million and (v) an increase in bad debt expense of $1.4 million, partially offset by (vi) a change in equity in losses of unconsolidated entities of $42.7 million.
Net cash used in investing activities decreased $120.1 million primarily due to (i) a decrease in acquisitions of property, plant and equipment of $118.1 million and (ii) a decrease in investment in convertible promissory notes of $11.4 million, partially offset by (iii) an increase in cash used for the acquisition of additional ownership interest in FYX of $0.6 million in 2023 as compared to 2022, (iv) an increase in the investment in unconsolidated entities of $1.1 million, (v) a decrease in the proceeds from sale of property, plant and equipment of $6.1 million and (vi) an increase in the acquisition of leasing equipment of $1.7 million.
Net cash provided by financing activities decreased $78.3 million primarily due to (i) a decrease in the proceeds from the issuance of Redeemable Preferred Stock of $274.6 million, (ii) a decrease in proceeds from debt of $337.7 million, (iii) repayment of debt proceeds of $75.1 million, (iv) cash dividends paid of $9.3 million and (v) a decrease in settlement of equity-based compensation of $1.6 million, partially offset by (vi) a decrease in net transfers to Former Parent of $617.3 million and (vii) a decrease in payment of deferred financing costs of $4.8 million.
Debt Covenants
We are in compliance with all of our debt covenants as of December 31, 2024. See Note 7 to the consolidated and combined consolidated financial statements for information related to our debt obligations and respective covenants.
Contractual Obligations and Cash Requirements
Our material cash requirements include the following contractual and other obligations:
Debt Obligations — As of December 31, 2024, we have outstanding principal and interest payment obligations of $1.6 billion and $555.3 million, respectively, of which, there are $50.0 million of principal payments due and $122.0 million of interest payments due within the next twelve months. See Note 7 of the consolidated and combined consolidated financial statements for additional information about our debt obligations.
Lease Obligations — As of December 31, 2024, we had operating and finance lease obligations of $168.6 million, of which $8.4 million is due within the next twelve months.
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Redeemable Preferred Stock Obligations —We have dividend payments of $73.8 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 Notes 2 and 16 for additional information related to our preferred stock obligations.
Other Cash Requirements —In addition to our contractual obligations, we may pay quarterly cash dividends on our common stock, which are subject to change at the discretion of our board of directors.
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 may elect to meet certain long-term liquidity requirements or to continue to pursue strategic opportunities through utilizing cash on hand, cash generated from our current operations and the issuance of securities in the future. Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required.
Application of Critical Accounting Policies
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:
Asset Range of Estimated Useful Lives Residual Value Estimates
Railcars and locomotives 40 - 50 years from date of manufacture
Scrap value at end of useful life
Track and track related assets 15 - 50 years from date of manufacture
Scrap value at end of useful life
Land, site improvements and rights N/A N/A
Bridges and tunnels 15 - 55 years
Scrap value at end of useful life
Buildings and site improvements 20 - 30 years
Scrap value at end of useful life
Railroad equipment 3 - 15 years from date of manufacture
Scrap value at end of useful life
Terminal machinery and equipment 15 - 25 years from date of manufacture
Scrap value at end of useful life
Furniture and fixtures 3 - 6 years from date of purchase
None
Computer hardware and software 3 - 5 years from date of purchase
None
Construction in progress N/A N/A
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. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination; a significant change in market conditions; or the introduction of newer technology. When performing a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its net book value. The undiscounted cash flows consist of cash flows from currently contracted leases and terminal services contracts, future projected leases, terminal service and freight rail rates, transition costs, and estimated residual or scrap values. In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge.
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.
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, 2024, 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. 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. An annual impairment review is conducted as of October 1st of each year. Additionally, we review the carrying value of goodwill whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The determination of fair value involves significant management judgment.
For an annual goodwill impairment assessment, an optional qualitative analysis may be performed. If the option is not elected or if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a goodwill impairment test is performed to identify potential goodwill impairment and measure an impairment loss.
A goodwill impairment assessment compares the fair value of a respective reporting unit with its carrying amount, including goodwill. The estimate of fair value of the respective reporting unit is based on the best information available as of the date of assessment, which primarily incorporates certain factors including our assumptions about operating results, business plans,
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income projections, anticipated future cash flows and market data. 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, 2024, 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. As part of our assessment, we considered numerous factors, including:
• macroeconomic conditions and their potential impact on reporting unit fair value;
• industry and market conditions;
• cost factors such as increases in raw materials, labor or other costs;
• actual financial performance compared with budget and prior projections; and
• events that may change the composition or carrying value of its net assets.
For our Jefferson Terminal reporting unit, we completed a quantitative analysis. 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, 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 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% as of October 1, 2024. 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, expansion of volumes and execution of contracts related to sustainable fuels and movements in future oil spreads. At October 1, 2024, approximately 6.0 million barrels of storage was operational. Our discount rate for our 2024 goodwill impairment analysis was 9.5% 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 and natural gas production in the U.S. and Canada, are expected to result in increased demand for storage on the U.S. Gulf Coast. Although we do not have significant direct exposure to volatility of crude oil prices, changes in crude oil pricing that affect long term refining planned output could impact Jefferson Terminal operations.
We expect the Jefferson Terminal reporting unit to continue to generate positive Adjusted EBITDA in future years. Further delays in executing anticipated contracts or achieving our projected volumes could adversely affect the fair value of the reporting unit.
There were no impairments of goodwill for the years ended December 31, 2024, 2023 and 2022.
Income Taxes — Prior to the spin-off, we were taxed as a disregarded entity for U.S. federal income tax purposes and our taxable income or loss generated was allocated to investors by our Former Parent, which was treated as a partnership for U.S. federal income tax purposes. In addition, certain of our subsidiaries were taxed as separate corporations for U.S. federal income tax purposes. The income tax provision included in the consolidated and combined consolidated financial statements prior to the spin-off was prepared on a separate return method. Post spin-off, FTAI Infrastructure’s tax profile, certain return elections and assertions are different, including a single consolidated federal tax filing in the U.S., and therefore the income taxes presented prior to the spin-off in the consolidated and combined consolidated financial statements are not expected to be indicative of the Company’s future income taxes.
We account for these taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized.
Some of our entities file income tax returns in the U.S. federal jurisdiction, various state jurisdictions and in certain foreign jurisdictions. The income tax returns filed by us and our subsidiaries are subject to examination by the U.S. federal, state and foreign tax authorities. 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.
Recent Accounting Pronouncements
Please see Note 2 to our consolidated and combined consolidated financial statements included elsewhere in this filing for recent accounting pronouncements.
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