What changed in this filing

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Item 1. Financial Statements

2020-10-30 compared with 2020-07-31 · 198 added, 190 removed, 1125 unchanged (26% of the section changed)

3 unchanged sentences

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

Notes June 30, 2020 December 31, 2019

Notes September 30, 2020 December 31, 2019

Cash and cash equivalents 2 $ 119,799 $ 226,512

20 unchanged sentences

2,000,000,000 shares authorized;

85,610,800 and 84,917,448 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively)

85,617,146 and 84,917,448 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively)

Preferred shares ($ 0.01 par value per share;

200,000,000 shares authorized;

8,050,000 and 8,050,000 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively)

9,120,000 and 8,050,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively)

Additional paid in capital 1,130,121 1,110,122

9 unchanged sentences

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

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

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

Notes 2020 2019 2020 2019

12 unchanged sentences

Equity in losses of unconsolidated entities 7 ( 2,501 ) ( 974 ) ( 5,445 ) ( 1,527 )

Gain (loss) on sale of assets, net 768 22,622 ( 1,051 ) 24,340

(Loss) gain on sale of assets, net ( 1,114 ) 37,060 ( 2,165 ) 61,400

Loss on extinguishment of debt 9 — — ( 4,724 ) —

Interest income 58 121 121 452

Other (expense) income ( 1 ) 4,937 32 2,334

Other income — 1,131 32 3,465

Total other (expense) income ( 3,557 ) 37,338 ( 12,181 ) 63,790

(Loss) income from continuing operations before income taxes ( 27,695 ) 20,608 ( 51,662 ) 23,601

Benefit from income taxes 15 ( 3,750 ) ( 2,328 ) ( 3,848 ) ( 2,061 )

(Benefit from) provision for income taxes 15 ( 2,486 ) 872 ( 6,334 ) ( 1,189 )

Net (loss) income from continuing operations ( 25,209 ) 19,736 ( 45,328 ) 24,790

18 unchanged sentences

(Dollars in thousands)

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

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

2020 2019 2020 2019

4 unchanged sentences

Comprehensive (loss) income ( 38,677 ) 12,092 ( 60,819 ) 52,147

Comprehensive (loss) income attributable to non-controlling interest:

Continuing operations ( 3,876 ) ( 5,111 ) ( 12,724 ) ( 13,051 )

2 unchanged sentences

________________________________________________________

(1) Net of deferred tax (benefit) expense of $( 3,220 ) and $ 6,186 for the three months ended June 30, 2020 and 2019, respectively, and $( 894 ) and $ 6,186 for the six months ended June 30, 2020 and 2019, respectively.

(1) Net of deferred tax (benefit) expense of $( 3,580 ) and $( 2,282 ) for the three months ended September 30, 2020 and 2019, respectively, and $( 4,474 ) and $ 3,904 for the nine months ended September 30, 2020 and 2019, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three and Six Months Ended June 30, 2020

Three and Nine Months Ended September 30, 2020

Common Shares Preferred Shares Additional Paid In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - December 31, 2019 $ 849 $ 81 $ 1,110,122 $ 190,453 $ 372 $ 36,980 $ 1,338,857

Net income (loss) 1,676 ( 4,736 ) ( 3,060 )

Other comprehensive income — 8,758 — 8,758

Total comprehensive income (loss) 1,676 8,758 ( 4,736 ) 5,698

Issuance of common shares 2 154 156

Conversion of participating securities ( 2 ) ( 2 )

Dividends declared - common shares ( 28,391 ) ( 28,391 )

Issuance costs of preferred shares ( 246 ) ( 246 )

Dividends declared - preferred shares ( 4,539 ) ( 4,539 )

Equity-based compensation 291 291

Equity - March 31, 2020 $ 851 $ 81 $ 1,110,028 $ 159,199 $ 9,130 $ 32,535 $ 1,311,824

Net loss ( 9,940 ) ( 8,848 ) ( 18,788 )

9 unchanged sentences

Equity - June 30, 2020 $ 856 $ 81 $ 1,109,631 $ 115,113 $ ( 2,982 ) $ 28,792 $ 1,251,491

Three and Six Months Ended June 30, 2019

Common Shares Preferred Shares Additional Paid In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - December 31, 2018 $ 840 $ — $ 1,029,376 $ ( 32,817 ) $ — $ 56,383 $ 1,053,782

Net loss ( 21,333 ) ( 3,876 ) ( 25,209 )

1 unchanged sentence

Total comprehensive loss ( 21,333 ) ( 13,468 ) ( 3,876 ) ( 38,677 )

Issuance of common shares 5 234 — 239

Conversion of participating securities ( 4 ) ( 4 )

Settlement of equity-based compensation ( 68 ) ( 68 )

Dividends declared - common shares ( 28,395 ) ( 28,395 )

Issuance of preferred shares 10 20,490 20,500

Dividends declared - preferred shares ( 4,625 ) ( 4,625 )

Equity-based compensation 621 621

Equity - March 31, 2019 $ 845 $ — $ 1,001,223 $ ( 39,197 ) $ ( 43,012 ) $ 53,195 $ 973,054

Equity - September 30, 2020 $ 856 $ 91 $ 1,130,121 $ 60,760 $ ( 16,450 ) $ 25,469 $ 1,200,847

Three and Nine Months Ended September 30, 2019

Common Shares Preferred Shares Additional Paid In Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - December 31, 2018 $ 840 $ — $ 1,029,376 $ ( 32,817 ) $ — $ 56,383 $ 1,053,782

Net income (loss) 13,952 ( 7,955 ) 5,997

6 unchanged sentences

Equity - June 30, 2019 $ 848 $ — $ 972,836 $ ( 18,865 ) $ 34,058 $ 49,356 $ 1,038,233

Net income (loss) 25,671 ( 4,995 ) 20,676

Other comprehensive loss — ( 8,584 ) — ( 8,584 )

Total comprehensive income (loss) 25,671 ( 8,584 ) ( 4,995 ) 12,092

Issuance of common shares 1 150 — 151

Conversion of participating securities ( 1 ) ( 1 )

Dividends declared - common shares ( 28,387 ) — ( 28,387 )

Issuance of preferred shares 35 82,853 82,888

Equity-based compensation — 676 676

Equity - September 30, 2019 $ 849 $ 35 $ 1,027,451 $ 6,806 $ 25,474 $ 45,037 $ 1,105,652

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Net (loss) income $ ( 43,997 ) $ 26,673

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

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

Equity in losses of unconsolidated entities 5,445 1,527

34 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

6 unchanged sentences

Release of maintenance deposits ( 12,429 ) ( 23,822 )

Issuance costs of preferred shares ( 267 ) —

Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 20,223 82,888

Purchase of non-controlling interest ( 110 ) —

55 unchanged sentences

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

We had commodities inventory of $ 0.4 million and $ 5.6 million as of June 30, 2020 and December 31, 2019, respectively, which is included in Other assets in the Consolidated Balance Sheets.

We had commodities inventory of $ 1.5 million and $ 5.6 million as of September 30, 2020 and December 31, 2019, respectively, which is included in Other assets in the Consolidated Balance Sheets.

Deferred Financing Costs — Costs incurred in connection with obtaining long term financing are capitalized and amortized to interest expense over the term of the underlying loans.

Unamortized deferred financing costs of $ 25.2 million and $ 18.1 million as of June 30, 2020 and December 31, 2019, respectively, are recorded as a component of debt in the Consolidated Balance Sheets.

We also have unamortized deferred revolver fees related to our revolving debt of $ 2.4 million and $ 1.7 million as of June 30, 2020 and December 31, 2019, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 1.9 million an d $ 2.0 million for the three months ended June 30, 2020 and 2019, respectively, and $ 4.0 million and $ 4.0 million for the six months ended June 30, 2020 and 2019, respectively, and is included in interest expense in the Consolidated Statements of Operations.

Unamortized deferred financing costs of $ 31.3 million and $ 18.1 million as of September 30, 2020 and December 31, 2019, respectively, are recorded as a component of debt in the Consolidated Balance Sheets.

We also have unamortized deferred revolver fees related to our revolving debt of $ 2.0 million and $ 1.7 million as of September 30, 2020 and December 31, 2019, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 2.1 million an d $ 1.9 million for the three months ended September 30, 2020 and 2019, respectively, and $ 6.2 million and $ 6.0 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in interest expense in the Consolidated Statements of Operations.

Revenue Recognition

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The Q&A permits an entity to elect to forgo the evaluation of the enforceable rights and obligations of a lease contract required under ASC 842, Leases , as long as the total rent payments after the lease concessions are substantially the same, or less than, the total rent payments in the existing lease.

The impact of the COVID-19 related lease concessions granted above did not have a material impact on our results of operations during the three and six months ended June 30, 2020.

The impact of the COVID-19 related lease concessions granted above did not have a material impact on our results of operations during the three and nine months ended September 30, 2020.

Finance Leases —From time to time we enter into finance lease arrangements that include a lessee obligation to purchase the leased equipment at the end of the lease term, a bargain purchase option, or provides for minimum lease payments with a present value that equals or exceeds substantially all of the fair value of the leased equipment at the date of lease inception.

8 unchanged sentences

These revenues are recognized over time, i.e., as the services are rendered and the customer simultaneously receives and consumes the benefit over time.

Lease Income —Lease income consists of rental income from tenants for storage space.

Lease income is recognized on a

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

straight-line basis over the term s of the relevant lease agreement.

Lease Income —Lease income consists of rental income from tenants for storage space.

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

Crude Marketing Revenues —Crude marketing revenues consists of marketing revenue related to Canadian crude oil.

19 unchanged sentences

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

During the three months ended June 30, 2020, one customer in the Aviation Leasing segment accounted for approximately 10% of total revenue.

During the three months ended June 30, 2019, one customer in the Jefferson Terminal segment accounted for approximately 23 % of total revenue.

During the six months ended June 30, 2020, one customer in the Jefferson Terminal segment and one customer in the Aviation segment each accounted for approximately 11 % of total revenue.

During the six months ended June 30, 2019, one customer in the Jefferson Terminal segment accounted for approximately 23 % of total revenue.

As of June 30, 2020, there were two customers in the Aviation Leasing segment that represented 27 % and 14 % of total accounts receivable, net, respectively.

During the three months ended September 30, 2020, one customer in the Aviation Leasing segment accounted for approximately 11 % of total revenue.

During the three months ended September 30, 2019, one customer in the Jefferson Terminal segment accounted for approximately 17 % of total revenue.

During the nine months ended September 30, 2020, one customer in the Aviation segment accounted for approximately 11 % of total revenue.

During the nine months ended September 30, 2019, one customer in the Jefferson Terminal segment accounted for approximately 19 % of total revenue.

As of September 30, 2020, there were two customers in the Aviation Leasing segment that represented 32 % and 14 % of total accounts receivable, net, respectively.

As of December 31, 2019, accounts receivable from one customer in the Jefferson Terminal segment represented 16 % of total accounts receivable, net.

2 unchanged sentences

Allowance for Doubtful Accounts — We determine the allowance for doubtful accounts based on our assessment of the collectability of our receivables on a customer-by-customer basis.

The allowance for doubtful accounts was $ 2.8 million and $ 1.3 million as of June 30, 2020 and December 31, 2019, respectively.

Bad debt expense was $ 1.1 million and $ 0.0 million for the three months ended June 30, 2020 and 2019, respectively, and $ 1.8 million and $ 3.0 million for the six months ended June 30, 2020 and 2019, respectively, and is included in operating expenses in the Consolidated Statements of Operations.

The allowance for doubtful accounts was $ 2.8 million and $ 1.3 million as of September 30, 2020 and December 31, 2019, respectively.

Bad debt expense was $ 0.2 million and $ 0.0 million for the three months ended September 30, 2020 and 2019, respectively, and $ 2.0 million and $ 3.0 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in operating expenses in the Consolidated Statements of Operations.

Comprehensive Income (Loss) — Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners.

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

Other Assets— Other assets is primarily comprised of lease incentives of $ 46.3 million and $ 45.3 million, prepaid expenses of $ 4.3 million and $ 4.1 million, notes receivable of $ 0.7 million and $ 2.4 million and maintenance right assets of $ 22.3 million and $ 24.5 million as of June 30, 2020 and December 31, 2019, respectively.

Other Assets— Other assets is primarily comprised of lease incentives of $ 48.5 million and $ 45.3 million, prepaid expenses of $ 6.0 million and $ 4.1 million, notes receivable of $ 7.8 million and $ 2.4 million and maintenance right assets of $ 13.6 million and $ 24.5 million as of September 30, 2020 and December 31, 2019, respectively.

Dividends— Dividends are recorded if and when declared by the Board of Directors.

For both the three and six months ended June 30, 2020 and 2019, the Board of Directors declared a cash dividend of $ 0.33 and $ 0.66 per common share.

Additionally, in the quarter ended June 30, 2020, the Board of Directors declared a cash dividend on the Series A Preferred Shares and Series B Preferred Shares of $ 0.52 and $ 0.50 per share, respectively.

For both the three and nine months ended September 30, 2020 and 2019, the Board of Directors declared a cash dividend of $ 0.33 and $ 0.99 per common share.

Additionally, in the quarter ended September 30, 2020, the Board of Directors declared a cash dividend on the Series A Preferred Shares and Series B Preferred Shares of $ 0.52 and $ 0.50 per share, respectively.

Recent Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

35 unchanged sentences

The following table presents the significant components of net income from discontinued operations:

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

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

2020 2019 2020 2019

1 unchanged sentence

Operating expense — 7,398 — 23,280

Acquisition and transaction expenses — 275 — 275

Depreciation and amortization — 479 — 1,697

2 unchanged sentences

Gain on sale of assets, net — 1 1,331 16

Other expense — 1 — —

Other income — 1 1,331 16

5 unchanged sentences

The following table presents the significant non-cash items and capital expenditures from discontinued operations:

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities:

9 unchanged sentences

Leasing equipment, net is summarized as follows:

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Leasing equipment $ 2,099,803 $ 2,019,773

1 unchanged sentence

Leasing equipment, net $ 1,703,498 $ 1,707,059

During the three months ended June 30, 2020, we performed impairment analyses over certain of our leasing equipment and determined that the carrying amount of certain assets were not recoverable.

During the nine months ended September 30, 2020, we performed impairment analyses over certain of our leasing equipment and determined that the carrying amount of certain assets were not recoverable.

To determine fair value, we used both a market approach, using quoted market prices for the same or similar assets, and an income approach, using discounted cash flows and an estimated discount rate.

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 10.5 million, net of redelivery compensation, during the second quarter of 2020.

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the six months ended June 30, 2020:

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 14.4 million, net of redelivery compensation.

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the nine months ended September 30, 2020:

Acquisitions:

1 unchanged sentence

Depreciation expense for leasing equipment is summarized as follows:

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

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

2020 2019 2020 2019

2 unchanged sentences

Finance leases, net are summarized as follows:

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Finance leases $ 16,748 $ 12,388

1 unchanged sentence

Finance leases, net $ 13,189 $ 8,315

We entered into a 15 month sales-type lease agreement for three of our engines during the nine months ended September 30, 2020.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

3 unchanged sentences

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

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Land, site improvements and rights $ 52,045 $ 51,901

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Property, plant and equipment, net $ 917,872 $ 732,109

During the six months ended June 30, 2020, we added property, plant and equipment of $ 130.2 million, which primarily consists of terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

During the nine months ended September 30, 2020, we added property, plant and equipment of $ 205.6 million, which primarily consists of terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

Depreciation expense for property, plant and equipment is summarized as follows:

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

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

2020 2019 2020 2019

5 unchanged sentences

Carrying Value

Investment Ownership Percentage June 30, 2020 December 31, 2019

Investment Ownership Percentage September 30, 2020 December 31, 2019

Advanced Engine Repair JV Equity method 25 % $ 23,220 $ 24,652

2 unchanged sentences

Long Ridge Terminal LLC Equity method 50 % 133,688 155,397

FYX Trust Holdco LLC Equity 14 % 1,256 —

Investments $ 158,215 $ 180,550

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2020 or 2019.

We did not recognize any other-than-temporary impairments for the three and nine months ended September 30, 2020 or 2019.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Equity Method Investments

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

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

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

2020 2019 2020 2019

5 unchanged sentences

Total $ ( 2,501 ) $ ( 974 ) $ ( 5,445 ) $ ( 1,527 )

Equity Method Investments

Long Ridge Terminal LLC

2 unchanged sentences

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

The following table presents a summarized statement of operations:

Three Months Ended June 30, 2020 Six Months Ended June 30, 2020

Total revenue $ 5,169 $ 9,907

Total expenses ( 8,483 ) ( 14,858 )

Other (loss) income ( 1,840 ) 1,605

Net loss $ ( 5,154 ) $ ( 3,346 )

Advanced Engine Repair JV

3 unchanged sentences

In August 2019, we expanded the scope of our joint venture and invested an additional $ 13.5 million and maintained a 25 % interest.

The following table presents a summarized statement of operations:

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

2020 2019 2020 2019

Total revenue $ — $ — $ — $ —

Total expenses ( 2,374 ) ( 1,047 ) ( 4,738 ) ( 1,851 )

Net loss $ ( 2,374 ) $ ( 1,047 ) $ ( 4,738 ) $ ( 1,851 )

JGP Energy Partners LLC

4 unchanged sentences

In December 2019, we purchased the remaining 50 % interest in JGP from the joint venture partner for a purchase price of approximately $ 30 million, consolidated JGP and no longer account for this as an equity method investment.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Intermodal Finance I, Ltd.

6 unchanged sentences

We do not have a variable interest in this investment as none of the criteria of ASC 810-10-15-14 were met.

As of June 30, 2020, Intermodal owns a portfolio of approximately 3,000 shipping containers subject to multiple operating leases.

As of September 30, 2020, Intermodal owns a portfolio of approximately 2,000 shipping containers subject to multiple operating leases.

Equity Investments

FYX Trust Holdco LLC

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

FYX Trust Holdco LLC (“FYX”) has developed a mobile and web-based application that connects fleet managers, owner-operators, and drivers with repair vendors to efficiently and reliably quote, dispatch, monitor, and bill roadside repair services.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

INTANGIBLE ASSETS AND LIABILITIES, NET

Intangible assets and liabilities, net are summarized as follows:

June 30, 2020

September 30, 2020

Aviation Leasing Jefferson Terminal Total

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Amortization of intangible assets and liabilities is as follows:

Classification in Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30,

Classification in Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

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Total $ 1,841 $ 1,960 $ 5,681 $ 8,416

As of June 30, 2020, estimated net annual amortization of intangibles is as follows:

As of September 30, 2020, estimated net annual amortization of intangibles is as follows:

Remainder of 2020 $ 1,647

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Our debt, net is summarized as follows:

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

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445,507 6.50 % 10/1/2025 444,957

Senior Notes due 2027 400,000 9.75 % 8/1/2027 —

Total bonds payable 1,807,900 1,328,030

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(3) Includes unamortized premium of $ 1,509 as of December 31, 2019.

(4) Includes unamortized discount of $ 4,348 and $ 5,429 at June 30, 2020 and December 31, 2019, respectively, and an unamortized premium of $ 2,555 and $ 3,243 at June 30, 2020 and December 31, 2019, respectively.

(5) Includes unamortized discount of $ 4,679 and $ 5,043 at June 30, 2020 and December 31, 2019, respectively.

(4) Includes unamortized discount of $ 3,790 and $ 5,429 at September 30, 2020 and December 31, 2019, respectively, and an unamortized premium of $ 2,203 and $ 3,243 at September 30, 2020 and December 31, 2019, respectively.

(5) Includes unamortized discount of $ 4,493 and $ 5,043 at September 30, 2020 and December 31, 2019, respectively.

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

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Jefferson used a portion of the net proceeds from this offering to refund, redeem and defease the Series 2012 Bonds, Series 2016 Bonds and Jefferson Revolver, and intends to use a portion of the net proceeds to pay for or reimburse the cost of development, construction and acquisition of certain facilities, to fund certain reserve and funded interest accounts related to the Series 2020 Bonds, and to pay for or reimburse certain costs of issuance of the Series 2020 Bonds.

Jefferson recognized a loss on extinguishment of debt of $ 4.7 million as a result of this transaction.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Jefferson recognized a loss on extinguishment of debt of $ 4.7 million as a result of this transaction.

FTAI Pride Credit Agreement — During March 2020, we repaid the FTAI Pride Credit Agreement in full.

Revolving Credit Facility — On May 11, 2020, we entered into an amendment to the Revolving Credit Facility which, among other things, (i) permits the incurrence of additional secured indebtedness to finance the potential acquisition of certain aviation assets, subject to certain limitations, (ii) provides that, to the extent borrowings under the Existing Credit Agreement exceed $ 150 million, we will pledge certain aviation assets as additional collateral and (iii) incorporates certain other updates, including procedures by which the parties will select a replacement benchmark interest rate in the event that LIBOR is no longer available or appropriate as a reference rate upon which to determine the interest rate under the Existing Credit Agreement.

We were in compliance with all debt covenants as of June 30, 2020.

Senior Notes due 2027 — On July 28, 2020, we issued $ 400 million aggregate principal amount of senior unsecured notes due 2027 (the “2027 Notes”).

The 2027 Notes bear interest at a rate of 9.75 % per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2021.

We used a portion of the proceeds to repay $ 220 million of outstanding borrowings under the Revolving Credit Facility, and intend to use the remaining proceeds for general corporate purposes, and the funding of future acquisitions and investments, including aviation investments.

We were in compliance with all debt covenants as of September 30, 2020.

FAIR VALUE MEASUREMENTS

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• Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

The following tables set forth our financial assets measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, by level within the fair value hierarchy.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following tables set forth our financial assets measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, by level within the fair value hierarchy.

Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of

June 30, 2020 June 30, 2020

September 30, 2020 September 30, 2020

Total Level 1 Level 2 Level 3 Valuation Technique

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These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The fair value of our commodity derivative assets and liabilities classified as Level 3 measurements are estimated by applying the income approach, which is based on discounted projected future cash flows.

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

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Series 2012 Bonds (1)

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Senior Notes due 2025 445,365 475,884

Senior Notes due 2027 428,404 —

________________________________________________________

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

Due to the COVID-19 pandemic, the fair values of our notes and bonds fluctuated significantly during the first half of 2020 and may continue to fluctuate based on market conditions and other factors.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Due to the COVID-19 pandemic, the fair values of our notes and bonds fluctuated significantly during 2020 and may continue to fluctuate based on market conditions and other factors.

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

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These crude oil forward purchase and sales contracts are not designated in hedging relationships.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents a summary of the changes in fair value for all Level 3 derivatives:

Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019

Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019

Crude Oil Forwards Electricity Swaps (1)

3 unchanged sentences

Net unrealized gains (losses) recognized in earnings — ( 644 ) ( 3,736 ) ( 181 ) 1,873 ( 6,003 )

Gains recognized in other comprehensive income — 83,256 — — 40,244 —

(Losses) gains recognized in other comprehensive income — ( 10,866 ) — — 29,378 —

Purchases — — — — 314

9 unchanged sentences

Under the provisions of ASC 842, we have elected to exclude sales and other similar taxes from lease payments in arrangements where we are a lessor.

Three Months Ended June 30, 2020

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

13 unchanged sentences

Total revenues $ 66,491 $ 11,697 $ 1,242 $ 4,279 $ 83,709

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Equipment Leasing Infrastructure

13 unchanged sentences

Total revenues $ 86,305 $ 60,537 $ 4,174 $ 1,684 $ 152,700

Six Months Ended June 30, 2020

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

13 unchanged sentences

Total revenues $ 224,742 $ 49,519 $ 1,556 $ 15,041 $ 290,858

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Equipment Leasing Infrastructure

13 unchanged sentences

Total revenues $ 231,697 $ 164,053 $ 12,154 $ 9,538 $ 417,442

Presented below are the contracted minimum future annual revenues to be received under existing operating and finance leases across several market sectors as of June 30, 2020:

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Presented below are the contracted minimum future annual revenues to be received under existing operating and finance leases across several market sectors as of September 30, 2020:

Operating Leases Finance Leases

9 unchanged sentences

The following table presents lease related costs:

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

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

2020 2019 2020 2019

2 unchanged sentences

Variable lease expense 111 578 1,215 1,475

Sublease income — ( 279 ) — ( 833 )

Lease expense from continuing operations 1,425 2,529 5,343 7,803

3 unchanged sentences

Total lease expense $ 1,425 $ 3,543 $ 5,343 $ 10,825

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents information related to our operating leases as of and for the six months ended June 30, 2020:

The following table presents information related to our operating leases as of and for the nine months ended September 30, 2020:

Right-of-use assets, net $ 62,588

5 unchanged sentences

Discontinued operations $ —

The following table presents future minimum lease payments under non-cancellable operating leases as of June 30, 2020:

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents future minimum lease payments under non-cancellable operating leases as of September 30, 2020:

Remainder of 2020 $ 1,201

3 unchanged sentences

Total lease liabilities $ 62,209

During the six months ended June 30, 2020, we amended a lease agreement for real estate in connection with the Jefferson Refinancing.

During the nine months ended September 30, 2020, we amended a lease agreement for real estate in connection with the Jefferson Refinancing.

The amended lease had a ROU asset value of $ 59.8 million and a lease term of approximately 43 years at commencement.

1 unchanged sentence

In 2015, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to award equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

As of June 30, 2020, the Incentive Plan provides for the issuance of up to 29.9 million shares.

As of September 30, 2020, the Incentive Plan provides for the issuance of up to 29.9 million shares.

We account for equity-based compensation expense in accordance with ASC 718 Compensation-Stock Compensation and is reported within operating expenses and general and administrative in the Consolidated Statements of Operations.

The Consolidated Statements of Operations includes the following expense related to our stock-based compensation arrangements:

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

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

2020 2019 2020 2019

3 unchanged sentences

Total - discontinued operations $ — $ 271 $ — $ 438

During the nine months ended September 30, 2020, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 252,472 of its options to certain of the Manager’s employees.

Restricted Shares

During the nine months ended September 30, 2020, we issued 545,806 restricted shares of our subsidiary that had a grant date fair value of $ 4.0 million and vest over three years .

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

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

During the six months ended June 30, 2020, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 252,472 of its options to certain of the Manager’s employees.

During the six months ended June 30, 2020, we issued 831,140 common units of our subsidiaries that had a grant date fair value of $ 0.9 million and vest over three years .

During the nine months ended September 30, 2020, we issued 831,140 common units of our subsidiaries that had a grant date fair value of $ 0.9 million and vest over three years .

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

2 unchanged sentences

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

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

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

2020 2019 2020 2019

18 unchanged sentences

corporate tax rates, or being deemed to be foreign sourced and thus either not taxable or taxable at effectively lower tax rates.

As of and for the six months ended June 30, 2020, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the nine months ended September 30, 2020, we had not established a liability for uncertain tax positions as no such positions existed.

In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S.

1 unchanged sentence

Generally, we are not subject to examination by taxing authorities for tax years prior to 2016.

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of June 30, 2020.

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of September 30, 2020.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

2 unchanged sentences

Additionally, we have entered into certain incentive allocation arrangements with Master GP, which owns approximately 0.05 % of the Partnership and is the general partner of the Partnership.

The Manager is entitled to a management fee, incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below) and reimbursement of certain expenses.

The management fee is determined by taking the average value of total equity (excluding non-controlling interests) determined on a consolidated basis in accordance with GAAP at the end of the two most recently completed months multiplied by an annual rate of 1.50 % and is payable monthly in arrears in cash.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

The income incentive allocation is calculated and distributable quarterly in arrears based on the pre-incentive allocation net income for the immediately preceding calendar quarter (the “Income Incentive Allocation”).

8 unchanged sentences

The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation:

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

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

2020 2019 2020 2019

8 unchanged sentences

we do not reimburse the Manager for these expenses.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes our reimbursements to the Manager:

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

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

2020 2019 (1)

5 unchanged sentences

________________________________________________________

(1) Due to the Aviation Restructuring (as defined in Note 17), during the three and six months ended June 30, 2019, $ 1,716 and $ 3,229 , respectively, was restated from the Corporate and Other segment to the Aviation Leasing segment, of which $ 746 and $ 1,294 , respectively, was reclassified from General and administrative to Operating expenses and $ 970 and $ 1,935 , respectively, remained in Acquisition and transaction expenses.

(1) Due to the Aviation Restructuring (as defined in Note 17), during the three and nine months ended September 30, 2019, $ 1,742 and $ 4,971 , respectively, was restated from the Corporate and Other segment to the Aviation Leasing segment, of which $ 749 and $ 2,043 , respectively, was reclassified from General and administrative to Operating expenses and $ 993 and $ 2,928 , respectively, remained in Acquisition and transaction expenses.

See Note 17 for additional details.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

5 unchanged sentences

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

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Accrued management fees $ 1,480 $ 1,410

1 unchanged sentence

________________________________________________________

(1) Includes $ 21.2 million related to incentive fees, as of December 31, 2019, which we paid during the six months ended June 30, 2020.

As of June 30, 2020 and December 31, 2019, there were no receivables from the Manager.

(1) Includes $ 21.2 million related to incentive fees, as of December 31, 2019, which we paid in 2020.

As of September 30, 2020 and December 31, 2019, there were no receivables from the Manager.

Other Affiliate Transactions

As of June 30, 2020 and December 31, 2019 an affiliate of our Manager owns an approximately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the consolidated financial statements.

The carrying amount of this non-controlling interest at June 30, 2020 and December 31, 2019 was $ 25.0 million and $ 33.7 million, respectively.

As of September 30, 2020 and December 31, 2019 an affiliate of our Manager owns an approximately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the consolidated financial statements.

The carrying amount of this non-controlling interest at September 30, 2020 and December 31, 2019 was $ 21.2 million and $ 33.7 million, respectively.

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

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

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

2020 2019 2020 2019

3 unchanged sentences

This affiliate of the Manager received fees of $ 1.7 million, which are amortized as interest expense to the earlier of the redemption date or February 13, 2020.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

In connection with the amendment to the Jefferson Revolver, on December 20, 2018, our subsidiary and an affiliate of our Manager entered into an amended and restated Fee and Support Agreement, and our subsidiary issued a $ 0.3 million promissory note to the affiliate of our Manager, as consideration for the fee payable pursuant to the amended and restated Fee and Support Agreement.

6 unchanged sentences

See Note 18 for details related to conversions during the period.

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

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

See Note 7 for additional information related to FYX.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

During the three months ended September 30, 2020, we granted options to the Manager in connection with preferred shares sold under the ATM Program (as defined in Note 18).

See Note 18 for additional information

SEGMENT INFORMATION

20 unchanged sentences

Prior periods have been restated for historical comparison.

The following table presents our adjustments for the three months ended June 30, 2019.

The following table presents our adjustments for the three months ended September 30, 2019.

As Previously Reported Adjustments As Reported

3 unchanged sentences

Acquisition and transaction expenses 65 5,278 993 ( 993 ) 1,058 4,285

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents our adjustments for the six months ended June 30, 2019.

The following table presents our adjustments for the nine months ended September 30, 2019.

As Previously Reported Adjustments As Reported

3 unchanged sentences

Acquisition and transaction expenses 78 9,047 2,928 ( 2,928 ) 3,006 6,119

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

8 unchanged sentences

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

For the Three Months Ended June 30, 2020

Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

12 unchanged sentences

Other (expense) income

Equity in losses of unconsolidated entities ( 594 ) — ( 2,582 ) ( 33 ) ( 3,209 )

Gain (loss) on sale of assets, net 775 ( 7 ) — — 768

Equity in (losses) income of unconsolidated entities ( 247 ) — ( 2,285 ) 31 ( 2,501 )

Loss on sale of assets, net ( 1,114 ) — — — ( 1,114 )

Interest income 41 — — 17 58

Other expense — ( 1 ) — — ( 1 )

Total other income (expense) 198 ( 8 ) ( 2,582 ) ( 28 ) ( 2,420 )

Total other (expense) income ( 1,320 ) — ( 2,285 ) 48 ( 3,557 )

Income (loss) from continuing operations before income taxes 21,667 ( 6,701 ) ( 4,433 ) ( 38,228 ) ( 27,695 )

8 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations:

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

15 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

9 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2020

Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

28 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations:

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

15 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

9 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2019

Three Months Ended June 30, 2019

For the Three Months Ended September 30, 2019

Three Months Ended September 30, 2019

Equipment Leasing Infrastructure

14 unchanged sentences

Interest income 31 26 47 17 121

Other income — 50 4,887 — 4,937

Other income (expense) — 772 ( 644 ) 1,003 1,131

Total other income (expense) 36,206 636 ( 597 ) 1,093 37,338

Income (loss) from continuing operations before income taxes 84,320 ( 18,183 ) ( 3,983 ) ( 41,546 ) 20,608

(Benefit from) provision for income taxes ( 2,369 ) 38 — 3 ( 2,328 )

Provision for income taxes 816 56 — — 872

Net income (loss) from continuing operations 83,504 ( 18,239 ) ( 3,983 ) ( 41,546 ) 19,736

5 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net income attributable to shareholders from continuing operations:

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Equipment Leasing Infrastructure

15 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Equipment Leasing Infrastructure

9 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2019

Six Months Ended June 30, 2019

For the Nine Months Ended September 30, 2019

Nine Months Ended September 30, 2019

Equipment Leasing Infrastructure

14 unchanged sentences

Interest income 85 97 241 29 452

Other (expense) income — ( 183 ) 2,517 — 2,334

Total other income (expense) 23,939 ( 228 ) 2,711 30 26,452

Other income — 589 1,873 1,003 3,465

Total other income 60,145 408 2,114 1,123 63,790

Income (loss) from continuing operations before income taxes 178,338 ( 47,652 ) ( 7,148 ) ( 99,937 ) 23,601

7 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net income attributable to shareholders from continuing operations:

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Equipment Leasing Infrastructure

15 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Equipment Leasing Infrastructure

11 unchanged sentences

The following tables sets forth summarized balance sheet information and the geographic location of property, plant and equipment and leasing equipment, net:

June 30, 2020

September 30, 2020

Equipment Leasing Infrastructure

6 unchanged sentences

Total liabilities and equity $ 1,718,772 $ 949,031 $ 408,046 $ 299,481 $ 3,375,330

June 30, 2020

September 30, 2020

Equipment Leasing Infrastructure

37 unchanged sentences

The calculation of basic and diluted EPS is presented below:

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

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

(in thousands, except share and per share data) 2020 2019 2020 2019

16 unchanged sentences

________________________________________________________

(1) The three and six months ended June 30, 2020 and 2019 includes participating securities which can be converted into a fixed amount of our shares.

For the three months ended June 30, 2020 and 2019, 1,219,065 and 119,009 shares, respectively, and for the six months ended June 30, 2020 and 2019, 499,053 and 127,923 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the six months ended June 30, 2020, we issued 18,337 common shares to certain directors as compensation.

During the six months ended June 30, 2020, certain holders of Class B Units (see Note 16) converted 911,448 Class B Units in exchange for 675,015 common shares.

(1) The three and nine months ended September 30, 2020 and 2019 includes participating securities which can be converted into a fixed amount of our shares.

For the three months ended September 30, 2020 and 2019, 228,934 and 165,232 shares, respectively, and for the nine months ended September 30, 2020 and 2019, 401,604 and 140,313 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the nine months ended September 30, 2020, we issued 24,683 common shares to certain directors as compensation.

During the nine months ended September 30, 2020, certain holders of Class B Units (see Note 16) converted 911,448 Class B Units in exchange for 675,015 common shares.

At the Market Program

On June 30, 2020, we entered into an At Market Issuance Sales Agreement with a third party to sell shares of our Series A Preferred Shares and Series B Preferred Shares (collectively, the “ATM Shares”), having an aggregate offering price of up to $ 100 million, from time to time, through an “at-the market” equity offering program (the “ATM Program”).

During the three months ended September 30, 2020, we sold 1,070,000 ATM Shares at a weighted average price of $ 19.54 per share for net proceeds of $ 20.6 million.

In connection with the shares sold under the ATM Program, we granted options to the Manager relating to 129,988 common shares, which had a grant date fair value of $ 0.7 million.

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

We believe the risk of loss in connection with such arrangements is remote.

We have also entered into an arrangement with our non-controlling interest holder of Repauno, as part of the acquisition, whereby the non-controlling interest holder may receive additional payments contingent upon the achievement of certain conditions, not to exceed $ 15.0 million.

We will account for such amounts when and if such conditions are achieved.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

We will account for such amounts when and if such conditions are achieved.

SUBSEQUENT EVENTS

On July 30, 2020, our Board of Directors declared a cash dividend on our common shares and eligible participating securities of $ 0.33 per share for the quarter ended June 30, 2020, payable on August 31, 2020 to the holders of record on August 17, 2020.

Additionally, on July 30, 2020, our Board of Directors also declared a cash dividend on the Series A Preferred Shares and Series B Preferred Shares of $ 0.52 per share and $ 0.50 per share, respectively, payable on September 15, 2020 to the holders of record on September 1, 2020.

At the Market Program

During July 2020, we sold 125,000 ATM Shares at an average price of $ 19.60 per share for net proceeds of $ 2.4 million.

In connection with the shares sold under the ATM program, we granted options to the Manager relating to 17,265 shares of our common stock, the fair value of which was not material as of the grant date.

Senior Notes due 2027

On July 28, 2020, we issued $ 400 million aggregate principal amount of senior unsecured notes due 2027 (the “2027 Notes”).

The 2027 Notes bear interest at a rate of 9.75 % per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2021.

We used a portion of the proceeds to repay $ 220 million of outstanding borrowings under the Revolving Credit Facility, and intend to use the remaining proceeds for general corporate purposes, which may include the repurchase or redemption of outstanding 2022 Notes and the funding of future acquisitions and investments, including aviation investments.

On October 29, 2020, our Board of Directors declared a cash dividend on our common shares and eligible participating securities of $ 0.33 per share for the quarter ended September 30, 2020, payable on November 30, 2020 to the holders of record on November 16, 2020.

Additionally, on October 29, 2020, our Board of Directors also declared a cash dividend on the Series A Preferred Shares and Series B Preferred Shares of $ 0.52 per share and $ 0.50 per share, respectively, payable on December 15, 2020 to the holders of record on December 1, 2020.

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

What changed 10-Q

Item 1. Financial Statements