What changed in this filing

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Item 1. Financial Statements

2021-07-29 compared with 2021-04-30 · 385 added, 160 removed, 850 unchanged (39% of the section changed)

3 unchanged sentences

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

Notes March 31, 2021 December 31, 2020

Notes June 30, 2021 December 31, 2020

Cash and cash equivalents 2 $ 105,244 $ 121,703

20 unchanged sentences

2,000,000,000 shares authorized;

85,630,753 and 85,617,146 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively)

85,641,314 and 85,617,146 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)

Preferred shares ($ 0.01 par value per share;

200,000,000 shares authorized;

13,320,000 and 9,120,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively)

13,320,000 and 9,120,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)

Additional paid in capital 1,163,748 1,130,106

9 unchanged sentences

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

Three Months Ended March 31,

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

Notes 2021 2020 2021 2020

10 unchanged sentences

Total expenses 128,314 111,367 242,821 222,492

Other income (expense)

Equity in earnings of unconsolidated entities 7 1,374 265

Other (expense) income

Equity in losses of unconsolidated entities 7 ( 7,152 ) ( 3,209 ) ( 5,778 ) ( 2,944 )

Gain (loss) on sale of assets, net 3,987 768 4,798 ( 1,051 )

1 unchanged sentence

Interest income 454 22 739 63

Other income 181 33

Total other income (expense) 2,651 ( 6,204 )

Other (expense) income ( 884 ) ( 1 ) ( 703 ) 32

Total other expense ( 6,849 ) ( 2,420 ) ( 4,198 ) ( 8,624 )

Loss from continuing operations before income taxes ( 38,248 ) ( 19,478 ) ( 72,955 ) ( 23,967 )

Provision for (benefit from) income taxes 15 169 ( 98 )

Benefit from income taxes 15 ( 1,640 ) ( 3,750 ) ( 1,471 ) ( 3,848 )

Net loss from continuing operations ( 36,608 ) ( 15,728 ) ( 71,484 ) ( 20,119 )

16 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

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

2021 2020 2021 2020

Net loss $ ( 36,608 ) $ ( 15,728 ) $ ( 71,484 ) $ ( 18,788 )

Other comprehensive income:

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

Comprehensive (loss) income ( 24,922 ) 5,698

Other comprehensive loss:

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

( 32,832 ) ( 12,112 ) ( 22,878 ) ( 3,354 )

Comprehensive loss ( 69,440 ) ( 27,840 ) ( 94,362 ) ( 22,142 )

Comprehensive loss attributable to non-controlling interest ( 6,625 ) ( 4,112 ) ( 11,586 ) ( 8,848 )

Comprehensive (loss) income attributable to shareholders $ ( 19,961 ) $ 10,434

Comprehensive loss attributable to shareholders $ ( 62,815 ) $ ( 23,728 ) $ ( 82,776 ) $ ( 13,294 )

________________________________________________________

(1) Net of deferred tax expense of $ 2,646 and $ 2,326 for the three months ended March 31, 2021 and 2020, respectively.

(1) Net of deferred tax benefit of $( 7,118 ) and $( 3,220 ) for the three months ended June 30, 2021 and 2020, respectively, and $( 4,472 ) and $( 894 ) for the six months ended June 30, 2021 and 2020, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2021

Three and Six Months Ended June 30, 2021

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

10 unchanged sentences

Equity - March 31, 2021 $ 856 $ 133 $ 1,198,386 $ ( 58,073 ) $ ( 16,283 ) $ 18,633 $ 1,143,652

Three Months Ended March 31, 2020

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

Net loss ( 29,983 ) ( 6,625 ) ( 36,608 )

Other comprehensive loss — ( 32,832 ) — ( 32,832 )

Total comprehensive loss ( 29,983 ) ( 32,832 ) ( 6,625 ) ( 69,440 )

Issuance of common shares — 305 305

Dividends declared - common shares ( 28,412 ) ( 28,412 )

Issuance of preferred shares — 20 20

Dividends declared - preferred shares ( 6,551 ) ( 6,551 )

Equity-based compensation 1,439 1,439

Equity - June 30, 2021 $ 856 $ 133 $ 1,163,748 $ ( 88,056 ) $ ( 49,115 ) $ 13,447 $ 1,041,013

Three and Six Months Ended June 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

9 unchanged sentences

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

Net loss ( 11,616 ) ( 4,112 ) ( 15,728 )

Other comprehensive loss — ( 12,112 ) — ( 12,112 )

Total comprehensive loss ( 11,616 ) ( 12,112 ) ( 4,112 ) ( 27,840 )

Settlement of equity-based compensation ( 42 ) ( 42 )

Issuance of common shares 5 150 155

Conversion of participating securities ( 5 ) ( 5 )

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

Issuance costs of preferred shares ( 542 ) ( 542 )

Dividends declared - preferred shares ( 4,079 ) ( 4,079 )

Equity-based compensation 411 411

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

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

1 unchanged sentence

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

Equity in earnings of unconsolidated entities ( 1,374 ) ( 265 )

Equity in losses of unconsolidated entities 5,778 2,944

Gain on sale of subsidiaries — ( 1,331 )

5 unchanged sentences

Asset impairment 2,189 10,476

Change in deferred income taxes — 3,822

Deferred tax provision ( 1,632 ) ( 4,506 )

Change in fair value of non-hedge derivative ( 6,573 ) 181

1 unchanged sentence

Amortization of deferred financing costs 4,489 4,010

Bad debt expense ( 547 ) 632

Bad debt expense, net ( 733 ) 1,761

Other ( 117 ) 759

4 unchanged sentences

Other liabilities ( 3,637 ) 124

Net cash used in operating activities ( 48,932 ) ( 11,806 )

Net cash (used in) provided by operating activities ( 63,924 ) 44,652

Cash flows from investing activities:

6 unchanged sentences

Proceeds from sale of leasing equipment 57,155 37,687

Return of purchase deposit for aircraft and aircraft engines 4,600 —

Proceeds from deposit on sale of aircraft and engine 1,425 —

Return of deposit on sale of engine 1,010 2,350

4 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

7 unchanged sentences

Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 101,201 ( 267 )

Purchase of non-controlling interest — ( 45 )

Settlement of equity-based compensation ( 183 ) —

1 unchanged sentence

Cash dividends - preferred shares ( 11,176 ) ( 8,618 )

Net cash provided by (used in) financing activities $ 235,408 $ ( 16,198 )

Net increase (decrease) in cash and cash equivalents and restricted cash 32,058 ( 119,129 )

Net cash provided by financing activities $ 249,960 $ 111,001

Net decrease in cash and cash equivalents and restricted cash ( 18,173 ) ( 142,469 )

Cash and cash equivalents and restricted cash, beginning of period 161,418 242,517

49 unchanged sentences

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

We had Aviation inventory of $ 64.7 million and $ 58.2 million as of March 31, 2021 and December 31, 2020, respectively, which is included in Other assets in the Consolidated Balance Sheets.

We had Aviation inventory of $ 72.1 million and $ 58.2 million as of June 30, 2021 and December 31, 2020, respectively, which is included in Other assets in the Consolidated Balance Sheets.

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

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

We had commodities inventory of $ 0.1 million as of both March 31, 2021 and December 31, 2020, which is included in Other assets in the Consolidated Balance Sheets.

We had commodities inventory of $ 11.5 million and $ 0.1 million as of June 30, 2021 and December 31, 2020, 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 $34.9 million and $36.2 million as of March 31, 2021 and December 31, 2020, 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 $ 1.2 million and $ 1.6 million as of March 31, 2021 and December 31, 2020, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 2.3 million an d $ 2.1 million for the three months ended March 31, 2021 and 2020, respectively, and is included in interest expense in the Consolidated Statements of Operations.

Unamortized deferred financing costs of $ 40.4 million and $ 36.2 million as of June 30, 2021 and December 31, 2020, 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 $ 0.9 million and $ 1.6 million as of June 30, 2021 and December 31, 2020, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 2.2 million an d $ 1.9 million for the three months ended June 30, 2021 and 2020, respectively, and $ 4.5 million and $ 4.0 million for the six months ended June 30, 2021 and 2020, respectively, and is included in Interest expense in the Consolidated Statements of Operations.

Revenue Recognition

Equipment Leasing Revenues

Operating Leases —We lease equipment pursuant to net operating leases.

Operating Leases —We lease equipment pursuant to operating leases.

Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals.

3 unchanged sentences

Typically, under our aircraft lease agreements, the lessee is responsible for maintenance, repairs and other operating expenses throughout the term of the lease.

These periodic maintenance payments accumulate over the term of the lease to fund major maintenance events, and we are contractually obligated to return maintenance payments to the lessee up to the amount paid by the lessee.

In the event the total cost of maintenance events over the term of a lease is less than the cumulative maintenance payments, we are not required to return any unused or excess maintenance payments to the lessee.

4 unchanged sentences

For purchase and lease back transactions, we account for the transaction as a single arrangement.

We allocate the consideration paid based on the fair value of the aircraft and lease.

We allocate the consideration paid based on the relative fair value of the aircraft and lease.

The fair value of the lease may include a lease premium or discount.

1 unchanged sentence

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 months ended March 31, 2021.

The impact of the COVID-19 related lease concessions granted above did not have a material impact on our results of operations during the six months ended June 30, 2021.

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.

36 unchanged sentences

We attempt to limit our credit risk by performing ongoing credit evaluations and, when deemed necessary, enter into collateral arrangements.

During the three months ended March 31, 2021, one customer in the Aviation Leasing segment accounted for approximately 11 % of total revenue.

During the three months ended March 31, 2020, one customer in the Jefferson Terminal segment and one customer in the Aviation Leasing segment accounted for approximately 16 % and 11 % of total revenue, respectively.

As of March 31, 2021, there were two customers in the Aviation Leasing segment that represented 43 % and 15 % of total accounts receivable, net.

During both the three months ended June 30, 2021 and 2020, one customer in the Aviation Leasing segment accounted for approximately 10 % of total revenue.

During the six months ended June 30, 2021, one customer in the Aviation Leasing segment accounted for approximately 11 % of total revenue.

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

As of June 30, 2021, there were two customers in the Aviation Leasing segment that represented 32 % and 10 % of total accounts receivable, net and two customers in the Jefferson Terminal segment that each represented 12 % of total accounts receivable, net.

As of December 31, 2020, accounts receivable from two customers in the Aviation Leasing segment represented 40 % and 15 % 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 $ 4.0 million and $ 4.6 million as of March 31, 2021 and December 31, 2020, respectively.

There was a bad debt reversal of $ 0.5 million and bad debt expense of $ 0.6 million for the three months ended March 31, 2021 and 2020, 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.

Our comprehensive income (loss) represents net income (loss), as presented in the Consolidated Statements of Operations, adjusted for fair value changes related to other comprehensive income related to our equity method investees.

The allowance for doubtful accounts was $ 3.8 million and $ 4.6 million as of June 30, 2021 and December 31, 2020, respectively.

There was a bad debt reversal of $ 0.2 million and bad debt expense of $ 1.1 million for the three months ended June 30, 2021 and 2020, respectively, and a bad debt reversal of $ 0.7 million and bad debt expense of $ 1.8 million for the six months ended June 30, 2021 and 2020, respectively, and is included in Operating expenses in the Consolidated Statements of Operations.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Derivative Financial Instruments

17 unchanged sentences

We record all derivative assets and liabilities on a gross basis at fair value, which 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 $ 52.6 million and $ 55.1 million, purchase deposits of $ 10.7 million and $ 6.1 million, prepaid expenses of $ 24.5 million and $ 10.1 million, notes receivable of $ 6.4 million and $ 2.4 million, maintenance right assets of $ 13.6 million and $ 6.4 million and aircraft engine modules, spare parts and used material inventory of $ 64.7 million and $ 58.2 million as of March 31, 2021 and December 31, 2020, respectively.

Other Assets— Other assets is primarily comprised of lease incentives of $ 46.3 million and $ 55.1 million, purchase deposits of $ 9.3 million and $ 6.1 million, prepaid expenses of $ 24.7 million and $ 10.1 million, notes receivable of $ 6.4 million and $ 0.7 million, maintenance right assets of $ 17.1 million and $ 6.4 million and aircraft engine modules, spare parts and used material inventory of $ 72.1 million and $ 58.2 million as of June 30, 2021 and December 31, 2020, respectively.

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

For both the three months ended March 31, 2021 and 2020, the Board of Directors declared a cash dividend of $ 0.33 per common share.

Additionally, in the quarter ended March 31, 2021, 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 six months ended June 30, 2021 and 2020, the Board of Directors declared cash dividends of $ 0.33 and $ 0.66 per common share, respectively.

Additionally, in the quarter ended June 30, 2021, the Board of Directors declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 , $ 0.50 and $ 0.46 per share, respectively.

Recent Accounting Pronouncements — In March 2020 and January 2021, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

6 unchanged sentences

Adoption did not have a material impact on our consolidated financial statements.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) .

3 unchanged sentences

We adopted this guidance in the first quarter of 2021, which did not have a material impact on our consolidated financial statements.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Lessors—Certain Leases with Variable Lease Payments .

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

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

We are currently assessing the impact this guidance may have on our consolidated financial statements.

DISCONTINUED OPERATIONS

2 unchanged sentences

Accordingly, the results of operations of CMQR have been reported as discontinued operations for all periods presented.

During the three months ended March 31, 2020, we recognized a gain on sale of $ 1.3 million which is reported in Net income from discontinued operations, net of income taxes in the Consolidated Statements of Operations.

There were no non-cash items or capital expenditures during the three months ended March 31, 2020.

During the six months ended June 30, 2020, we recognized a gain on sale of $ 1.3 million which is reported in Net income from discontinued operations, net of income taxes in the Consolidated Statements of Operations.

There were no non-cash items or capital expenditures during the six months ended June 30, 2020.

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Leasing equipment $ 2,082,733 $ 2,042,404

1 unchanged sentence

Leasing equipment, net $ 1,656,702 $ 1,635,259

During the three months ended March 31, 2021, we evaluated our leasing equipment portfolio and identified certain assets with indicators of impairment, including, but not limited to, the redelivery of unserviceable leasing equipment and a decline in market values due to the ongoing COVID-19 pandemic for leasing equipment we have decided to sell.

During the six months ended June 30, 2021, we evaluated our leasing equipment portfolio and identified certain assets with indicators of impairment, including, but not limited to, the redelivery of unserviceable leasing equipment and a decline in market values due to the ongoing COVID-19 pandemic for leasing equipment we have decided to sell.

For these assets, we performed a recoverability assessment at the individual asset level and determined that the carrying amounts exceeded the estimated future undiscounted net cash flows and these assets were impaired.

1 unchanged sentence

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 2.2 million, net of redelivery compensation.

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the three months ended March 31, 2021:

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the six months ended June 30, 2021:

Acquisitions:

Dispositions:

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Depreciation expense for leasing equipment is summarized as follows:

Three Months Ended March 31,

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

2021 2020 2021 2020

Depreciation expense for leasing equipment $ 35,899 $ 34,293 $ 70,594 $ 69,017

1 unchanged sentence

Finance leases, net are summarized as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Finance leases $ 15,708 $ 9,389

1 unchanged sentence

Finance leases, net $ 13,124 $ 6,927

During the first quarter of 2021, we entered into 52-month sales-type lease arrangements for four airframes.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

During the six months ended June 30, 2021, we entered into 52 -month sales-type lease arrangements for four airframes.

PROPERTY, PLANT AND EQUIPMENT, NET

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Land, site improvements and rights $ 59,334 $ 52,047

10 unchanged sentences

Property, plant and equipment, net $ 1,014,390 $ 964,363

During the three months ended March 31, 2021, we added property, plant and equipment of $ 45.6 million, which primarily consists of terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

During the six months ended June 30, 2021, we placed additional assets into service and also added property, plant and equipment of $ 69.5 million, both of which primarily consist 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 March 31,

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

2021 2020 2021 2020

Depreciation expense $ 10,583 $ 6,538 $ 19,535 $ 13,123

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Carrying Value

Investment Ownership Percentage March 31, 2021 December 31, 2020

Investment Ownership Percentage June 30, 2021 December 31, 2020

Advanced Engine Repair JV Equity method 25 % $ 22,039 $ 22,721

4 unchanged sentences

Investments $ 114,493 $ 146,515

We did not recognize any other-than-temporary impairments for the three months ended March 31, 2021 or 2020.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2021 or 2020.

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

Three Months Ended March 31,

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

2021 2020 2021 2020

Advanced Engine Repair JV $ ( 341 ) $ ( 594 ) $ ( 681 ) $ ( 1,185 )

Intermodal Finance I, Ltd.

204 ( 33 ) 376 ( 83 )

Long Ridge Terminal LLC ( 7,015 ) ( 2,582 ) ( 5,473 ) ( 1,676 )

5 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, Six Months Ended June 30,

2021 2020 2021 2020

Total revenue $ 8,849 $ 5,169 $ 17,270 $ 9,907

Total expenses ( 11,074 ) ( 8,483 ) ( 19,417 ) ( 14,858 )

Other (loss) income ( 11,776 ) ( 1,840 ) ( 8,777 ) 1,605

Net loss $ ( 14,001 ) $ ( 5,154 ) $ ( 10,924 ) $ ( 3,346 )

Advanced Engine Repair JV

7 unchanged sentences

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:

March 31, 2021

June 30, 2021

Aviation Leasing Jefferson Terminal Total

11 unchanged sentences

Acquired unfavorable lease intangibles, net $ 1,460 $ — $ 1,460

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

December 31, 2020

13 unchanged sentences

Intangible liabilities relate to unfavorable lease intangibles and are included as a component of Other liabilities in the Consolidated Balance Sheets.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Amortization of intangible assets and liabilities is as follows:

Classification in Consolidated Statements of Operations Three Months Ended March 31,

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

2021 2020 2021 2020

Lease intangibles Equipment leasing revenues $ 1,198 $ 931 $ 1,950 $ 2,063

1 unchanged sentence

Total $ 2,087 $ 1,820 $ 3,727 $ 3,840

As of March 31, 2021, estimated net annual amortization of intangibles is as follows:

As of June 30, 2021, estimated net annual amortization of intangibles is as follows:

Remainder of 2021 $ 3,082

4 unchanged sentences

Our debt, net is summarized as follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

21 unchanged sentences

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

Senior Notes due 2028 500,000 5.50 % 5/1/2028 —

Total bonds payable 2,016,420 1,915,984

6 unchanged sentences

(2) Requires a quarterly commitment fee at a rate of 0.875 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(3) Includes unamortized discount of $ 1,834 and $ 2,230 at March 31, 2021 and December 31, 2020, respectively, and an unamortized premium of $ 998 and $ 1,561 at March 31, 2021 and December 31, 2020, respectively.

(4) Includes unamortized discount of $ 4,110 and $ 4,303 at March 31, 2021 and December 31, 2020, respectively, and an unamortized premium of $ 6,671 and $ 6,976 at March 31, 2021 and December 31, 2020, respectively.

On January 25, 2021, Jefferson entered into a non-recourse loan agreement under the U.S.

(3) Includes an unamortized discount of $ 2,230 and an unamortized premium of $ 1,561 at December 31, 2020.

(4) Includes an unamortized discount of $ 3,913 and $ 4,303 at June 30, 2021 and December 31, 2020, respectively, and an unamortized premium of $ 6,353 and $ 6,976 at June 30, 2021 and December 31, 2020, respectively.

EB-5 Loan Agreement — On January 25, 2021, Jefferson entered into a non-recourse loan agreement under the U.S.

Citizenship and Immigration Services EB-5 Program (“EB-5 Loan Agreement”) to pay for the development, construction and acquisition of certain facilities at Jefferson Terminal.

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

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

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

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

We were in compliance with all debt covenants as of March 31, 2021.

Senior Notes due 2028 — On April 12, 2021, we issued $ 500 million aggregate principal amount of senior unsecured notes due 2028 (the “Senior Notes due 2028”).

The Senior Notes due 2028 bear interest at a rate of 5.50 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year, commencing on November 1, 2021.

We used a portion of the proceeds to redeem in full the Senior Notes due 2022 (see below), and used the remaining net proceeds for general corporate purposes, including the funding of acquisitions and investments, including aviation investments.

Senior Notes due 2022 — On May 7, 2021, we redeemed in full the Senior Notes due 2022, which totaled $ 400 million aggregate principal plus accrued and unpaid interest, and recognized a loss on extinguishment of debt of $ 3.3 million.

We were in compliance with all debt covenants as of June 30, 2021.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

11 unchanged sentences

• 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 March 31, 2021 and December 31, 2020, by level within the fair value hierarchy.

The following tables set forth our financial assets measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020, 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

March 31, 2021 March 31, 2021

June 30, 2021 June 30, 2021

Total Level 1 Level 2 Level 3 Valuation Technique

16 unchanged sentences

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Series A 2020 Bonds (1)

5 unchanged sentences

Senior Notes due 2027 463,552 460,340

Senior Notes due 2028 521,405 —

________________________________________________________

13 unchanged sentences

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Notional Amount (BBL in thousands)

4 unchanged sentences

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

Three Months Ended March 31,

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

2021 2020 2021 2020

Beginning Balance $ — $ — $ — $ 181

Net unrealized gains (losses) recognized in earnings — ( 181 )

Net losses recognized in earnings — — — ( 181 )

Ending Balance $ — $ — $ — $ —

6 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 March 31, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

13 unchanged sentences

Total revenues $ 78,443 $ 11,527 $ 2,344 $ 4,601 $ 96,915

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Equipment Leasing Infrastructure

16 unchanged sentences

(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 March 31, 2021:

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Equipment leasing revenues

Lease income $ 79,997 $ — $ — $ 3,132 $ 83,129

Maintenance revenue 47,511 — — — 47,511

Finance lease income 846 — — — 846

Other revenue 6,190 — — 502 6,692

Total equipment leasing revenues 134,544 — — 3,634 138,178

Infrastructure revenues

Lease income — 862 — — 862

Terminal services revenues — 21,384 157 — 21,541

Crude marketing revenues — — — — —

Other revenue — — 10,283 3,200 13,483

Total infrastructure revenues — 22,246 10,440 3,200 35,886

Total revenues $ 134,544 $ 22,246 $ 10,440 $ 6,834 $ 174,064

Six Months Ended June 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Equipment leasing revenues

Lease income $ 89,446 $ — $ — $ 5,001 $ 94,447

Maintenance revenue 59,100 — — — 59,100

Finance lease income 842 — — — 842

Other revenue 8,863 — — 3,031 11,894

Total equipment leasing revenues 158,251 — — 8,032 166,283

Infrastructure revenues

Lease income — 407 — — 407

Terminal services revenues — 29,205 — — 29,205

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

Other revenue — — 314 2,730 3,044

Total infrastructure revenues — 37,822 314 2,730 40,866

Total revenues $ 158,251 $ 37,822 $ 314 $ 10,762 $ 207,149

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, 2021:

Operating Leases Finance Leases

6 unchanged sentences

Total $ 395,597 $ 2,584

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Our leases have remaining lease terms ranging from approximately one month to 41 years.

Our leases have remaining lease terms ranging from approximately five months to 41 years.

The following table presents lease related costs:

Three Months Ended March 31,

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

2021 2020 2021 2020

Operating lease expense $ 1,188 $ 1,229 $ 2,447 $ 2,364

2 unchanged sentences

Total lease expense $ 1,943 $ 1,653 $ 3,664 $ 3,918

The following table presents information related to our operating leases as of and for the three months ended March 31, 2021:

The following table presents information related to our operating leases as of and for the six months ended June 30, 2021:

Right-of-use assets, net $ 64,541

3 unchanged sentences

Cash paid for amounts included in the measurement of operating lease liabilities $ 2,434

The following table presents future minimum lease payments under non-cancellable operating leases as of March 31, 2021:

The following table presents future minimum lease payments under non-cancellable operating leases as of June 30, 2021:

Remainder of 2021 $ 2,645

3 unchanged sentences

Total lease liabilities $ 64,120

During the six months ended June 30, 2021, we entered into a new lease for real estate, which had a ROU asset value of $ 2.7 million and a lease term of approximately five years at commencement.

EQUITY-BASED COMPENSATION

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

As of June 30, 2021, the Incentive Plan provides for the issuance of up to 29.8 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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

During the three months ended March 31, 2021, we entered into a new lease for real estate, which had a ROU asset value of $ 2.7 million and a lease term of approximately five years at commencement.

EQUITY-BASED COMPENSATION

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 March 31, 2021, the Incentive Plan provides for the issuance of up to 29.9 million shares.

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

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

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)

2021 2020 2021 2020

Restricted Shares $ 1,270 $ 215 $ 2,111 $ 430 $ 5,466 1.5

1 unchanged sentence

Total $ 1,439 $ 411 $ 2,553 $ 702 $ 6,877

During the three months ended March 31, 2021, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 25,998 of its options to certain of the Manager’s employees.

During the six months ended June 30, 2021, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 25,998 of its options to certain of the Manager’s employees.

In connection with our March 2021 offering of preferred shares (see Note 18), we granted options to the Manager related to 355,932 common shares at an exercise price of $ 29.50 , which had a grant date fair value of $ 3.7 million.

1 unchanged sentence

a 1.70 % risk-free rate, a 3.16 % dividend yield, a 45.60 % volatility and a ten-year term.

During the three months ended March 31, 2021, we issued 1,052,632 common units of our subsidiary that had a grant date fair value of $ 1.2 million and vest over three years .

During the six months ended June 30, 2021, we issued 1,052,632 common units of our subsidiary that had a grant date fair value of $ 1.2 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

Restricted Shares

During the three months ended March 31, 2021, we issued restricted shares of our subsidiary that had a grant date fair value of $ 5.3 million and vest over three years .

During the six months ended June 30, 2021, we issued restricted shares of our subsidiary that had a grant date fair value of $ 5.3 million and vest over three years .

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

1 unchanged sentence

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended March 31,

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

2021 2020 2021 2020

Federal $ 37 $ 31 $ 56 $ 68

State and local 90 83 161 251

Foreign ( 64 ) 252 ( 56 ) 322

Total current provision 63 366 161 641

8 unchanged sentences

federal, state and foreign corporate income tax in locations where they conduct business.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Our effective tax rate differs from the U.S.

1 unchanged sentence

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 three months ended March 31, 2021, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the six months ended June 30, 2021, 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 2017.

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 March 31, 2021.

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, 2021.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

7 unchanged sentences

Pre-incentive allocation net income does not include any Income Incentive Allocation or Capital Gains Incentive Allocation (described below) paid to the Master GP during the relevant quarter.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

A subsidiary of ours allocates and distributes to the Master GP an Income Incentive Allocation with respect to its pre-incentive allocation net income in each calendar quarter as follows:

One of our subsidiaries allocates and distributes to the Master GP an Income Incentive Allocation with respect to its pre-incentive allocation net income in each calendar quarter as follows:

(1) no Income Incentive Allocation in any calendar quarter in which pre-incentive allocation net income, expressed as a rate of return on the average value of our net equity capital (excluding non-controlling interests) at the end of the two most recently completed calendar quarters, does not exceed 2 % for such quarter ( 8 % annualized);

4 unchanged sentences

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

Three Months Ended March 31,

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

2021 2020 2021 2020

Management fees $ 4,113 $ 4,756 $ 8,103 $ 9,522

2 unchanged sentences

Total $ 4,113 $ 4,756 $ 8,103 $ 9,522

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

We pay all of our operating expenses, except those specifically required to be borne by the Manager under the Management Agreement.

4 unchanged sentences

The following table summarizes our reimbursements to the Manager:

Three Months Ended March 31,

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

2021 2020 2021 2020

Classification in the Consolidated Statements of Operations:

6 unchanged sentences

The Incentive Allocation Fair Value Amount is an amount equal to the Income Incentive Allocation and the Capital Gains Incentive Allocation that would be paid to the Master GP if our assets were sold for cash at their then current fair market value (as determined by an appraisal, taking into account, among other things, the expected future value of the underlying investments).

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

1 unchanged sentence

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Accrued management fees $ 1,349 $ 1,461

Other payables 799 1,317

As of March 31, 2021 and December 31, 2020, there were no receivables from the Manager.

As of June 30, 2021 and December 31, 2020, there were no receivables from the Manager.

Other Affiliate Transactions

As of March 31, 2021 and December 31, 2020 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 March 31, 2021 and December 31, 2020 was $ 12.2 million and $ 17.2 million, respectively.

As of June 30, 2021 and December 31, 2020 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, 2021 and December 31, 2020 was $ 5.6 million and $ 17.2 million, respectively.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended March 31,

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

2021 2020 2021 2020

Non-controlling interest share of net loss $ 6,538 $ 4,020 $ 11,554 $ 8,681

8 unchanged sentences

See Note 7 for additional information related to FYX.

During the three months ended March 31, 2021, we granted options to the Manager in connection with the offering of the Series C Preferred Shares (as defined in Note 18).

During the six months ended June 30, 2021, we granted options to the Manager in connection with the offering of the Series C Preferred Shares (as defined in Note 18).

See Notes 14 and 18 for additional information.

On May 4, 2021, the Company received a promissory note from Long Ridge Terminal LLC, an affiliate, in exchange for a loan in the principal amount of $ 5.8 million.

The note bears interest at a rate of 10 % per annum, with a maturity date of December 31, 2021.

The total principal amount plus all accrued and unpaid interest will be due and payable on the maturity date.

Interest income for the three and six months ended June 30, 2021 was $ 0.1 million.

SEGMENT INFORMATION

7 unchanged sentences

Additionally, Corporate and Other includes (i) offshore energy related assets, which consist of vessels and equipment that support offshore oil and gas drilling and production which are typically subject to operating leases, (ii) an investment in an unconsolidated entity engaged in the acquisition and leasing of shipping containers and (iii) railroad assets retained after the December 2019 sale, which consist of equipment that support a railcar cleaning business.

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 March 31, 2021

Three Months Ended March 31, 2021

For the Three Months Ended June 30, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

14 unchanged sentences

Gain on sale of assets, net 3,971 — 16 — 3,987

Loss on extinguishment of debt — — — ( 3,254 ) ( 3,254 )

Interest income 357 — 91 6 454

Other income — 181 — — 181

Total other income 738 181 1,542 190 2,651

Other (expense) income — ( 886 ) — 2 ( 884 )

Total other income (expense) 3,987 ( 886 ) ( 6,908 ) ( 3,042 ) ( 6,849 )

Income (loss) from continuing operations before income taxes 38,628 ( 13,664 ) ( 10,903 ) ( 52,309 ) ( 38,248 )

1 unchanged sentence

Net income (loss) from continuing operations 38,632 ( 13,723 ) ( 9,282 ) ( 52,235 ) ( 36,608 )

Net (loss) income attributable to non-controlling interests in consolidated subsidiaries — ( 5,016 ) 55 — ( 4,961 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 6,538 ) ( 87 ) — ( 6,625 )

Dividends on preferred shares — — — 6,551 6,551

4 unchanged sentences

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

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

2 unchanged sentences

Non-controlling share of Adjusted EBITDA 3,257

Equity in earnings of unconsolidated entities 1,374

Equity in losses of unconsolidated entities ( 7,152 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities 11

10 unchanged sentences

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

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Africa $ 235 $ — $ — $ — $ 235

Asia 32,479 — — 3,128 35,607

6 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended March 31, 2020

Three Months Ended March 31, 2020

For the Six Months Ended June 30, 2021

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

8 unchanged sentences

Depreciation and amortization 66,295 17,033 4,427 4,151 91,906

Asset impairment 2,189 — — — 2,189

Interest expense — 4,416 574 65,504 70,494

2 unchanged sentences

Equity in (losses) earnings of unconsolidated entities ( 681 ) — ( 5,473 ) 376 ( 5,778 )

Gain on sale of assets, net 4,782 — 16 — 4,798

Loss on extinguishment of debt — — — ( 3,254 ) ( 3,254 )

Interest income 624 — 91 24 739

Other (expense) income — ( 705 ) — 2 ( 703 )

Total other income (expense) 4,725 ( 705 ) ( 5,366 ) ( 2,852 ) ( 4,198 )

Income (loss) from continuing operations before income taxes 55,358 ( 23,406 ) ( 6,857 ) ( 98,050 ) ( 72,955 )

(Benefit from) provision for income taxes ( 46 ) 116 ( 1,467 ) ( 74 ) ( 1,471 )

Net income (loss) from continuing operations 55,404 ( 23,522 ) ( 5,390 ) ( 97,976 ) ( 71,484 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 11,554 ) ( 32 ) — ( 11,586 )

Dividends on preferred shares — — — 11,176 11,176

Net income (loss) from continuing operations attributable to shareholders $ 55,404 $ ( 11,968 ) $ ( 5,358 ) $ ( 109,152 ) $ ( 71,074 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Adjusted EBITDA $ 140,866 $ 6,383 $ 508 $ ( 32,649 ) $ 115,108

Non-controlling share of Adjusted EBITDA 5,286

Equity in losses of unconsolidated entities ( 5,778 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 2,391 )

Interest expense ( 70,494 )

Depreciation and amortization expense ( 106,811 )

Incentive allocations —

Asset impairment charges ( 2,189 )

Changes in fair value of non-hedge derivative instruments 6,573

Losses on the modification or extinguishment of debt and capital lease obligations ( 3,254 )

Acquisition and transaction expenses ( 6,042 )

Equity-based compensation expense ( 2,553 )

Provision for income taxes 1,471

Net loss attributable to shareholders from continuing operations $ ( 71,074 )

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

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Africa $ 235 $ — $ — $ — $ 235

Asia 57,503 — — 3,634 61,137

Europe 53,401 — — — 53,401

North America 20,950 22,246 10,440 3,200 56,836

South America 2,455 — — — 2,455

Total $ 134,544 $ 22,246 $ 10,440 $ 6,834 $ 174,064

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2020

Three Months Ended June 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Equipment leasing revenues $ 75,259 $ — $ — $ 4,575 $ 79,834

Infrastructure revenues — 13,081 — 1,394 14,475

Total revenues 75,259 13,081 — 5,969 94,309

Operating expenses 4,577 12,290 1,875 5,830 24,572

General and administrative — — — 4,388 4,388

Acquisition and transaction expenses 2,061 — 19 1,581 3,661

Management fees and incentive allocation to affiliate — — — 4,756 4,756

Depreciation and amortization 32,203 7,160 378 1,979 41,720

Asset impairment 10,476 — — — 10,476

Interest expense — 2,310 354 19,130 21,794

Total expenses 49,317 21,760 2,626 37,664 111,367

Other income (expense)

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

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

Interest income 17 — — 5 22

Other expense — ( 1 ) — — ( 1 )

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

Income (loss) from continuing operations before income taxes 26,140 ( 8,687 ) ( 5,208 ) ( 31,723 ) ( 19,478 )

(Benefit from) provision for income taxes ( 3,427 ) 74 ( 597 ) 200 ( 3,750 )

Net income (loss) from continuing operations 29,567 ( 8,761 ) ( 4,611 ) ( 31,923 ) ( 15,728 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 4,020 ) ( 92 ) — ( 4,112 )

Dividends on preferred shares — — — 4,079 4,079

Net income (loss) from continuing operations attributable to shareholders $ 29,567 $ ( 4,741 ) $ ( 4,519 ) $ ( 36,002 ) $ ( 15,695 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Adjusted EBITDA $ 77,501 $ 2,968 $ ( 885 ) $ ( 13,112 ) $ 66,472

Non-controlling share of Adjusted EBITDA 2,101

Equity in losses of unconsolidated entities ( 3,209 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 126 )

Interest expense ( 21,794 )

Depreciation and amortization expense ( 48,341 )

Incentive allocations —

Asset impairment charges ( 10,476 )

Changes in fair value of non-hedge derivative instruments —

Losses on the modification or extinguishment of debt and capital lease obligations —

Acquisition and transaction expenses ( 3,661 )

Equity-based compensation expense ( 411 )

Benefit from income taxes 3,750

Net loss attributable to shareholders from continuing operations $ ( 15,695 )

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

Three Months Ended June 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Africa $ 1,319 $ — $ — $ — $ 1,319

Asia 31,732 — — 4,575 36,307

Europe 31,287 — — — 31,287

North America 9,931 13,081 — 1,394 24,406

South America 990 — — — 990

Total $ 75,259 $ 13,081 $ — $ 5,969 $ 94,309

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2020

Six Months Ended June 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Equipment leasing revenues $ 158,251 $ — $ — $ 8,032 $ 166,283

Infrastructure revenues — 37,822 314 2,730 40,866

Total revenues 158,251 37,822 314 10,762 207,149

Operating expenses 8,648 34,233 3,875 11,260 58,016

General and administrative — — — 9,051 9,051

Acquisition and transaction expenses 4,785 — 801 1,269 6,855

Management fees and incentive allocation to affiliate — — — 9,522 9,522

Depreciation and amortization 64,834 14,386 754 3,943 83,917

Asset impairment 10,476 — — — 10,476

Interest expense — 5,738 747 38,170 44,655

Total expenses 88,743 54,357 6,177 73,215 222,492

Other income (expense)

Equity in losses of unconsolidated entities ( 1,185 ) — ( 1,676 ) ( 83 ) ( 2,944 )

Loss on sale of assets, net ( 1,044 ) ( 7 ) — — ( 1,051 )

2 unchanged sentences

Other income — 32 — — 32

Total other (expense) income ( 2,398 ) ( 4,669 ) 906 ( 43 ) ( 6,204 )

Total other expense ( 2,200 ) ( 4,677 ) ( 1,676 ) ( 71 ) ( 8,624 )

Income (loss) from continuing operations before income taxes 67,308 ( 21,212 ) ( 7,539 ) ( 62,524 ) ( 23,967 )

Provision for (benefit from) income taxes 45 135 ( 281 ) 3 ( 98 )

(Benefit from) provision for income taxes ( 3,382 ) 209 ( 878 ) 203 ( 3,848 )

Net income (loss) from continuing operations 70,690 ( 21,421 ) ( 6,661 ) ( 62,727 ) ( 20,119 )

6 unchanged sentences

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

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

Equipment Leasing Infrastructure

2 unchanged sentences

Non-controlling share of Adjusted EBITDA 5,451

Equity in earnings of unconsolidated entities 265

Equity in losses of unconsolidated entities ( 2,944 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities 287

10 unchanged sentences

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

Three Months Ended March 31, 2020

Six Months Ended June 30, 2020

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:

March 31, 2021

June 30, 2021

Equipment Leasing Infrastructure

6 unchanged sentences

Total liabilities and equity $ 1,783,011 $ 1,078,163 $ 428,528 $ 264,244 $ 3,553,946

March 31, 2021

June 30, 2021

Equipment Leasing Infrastructure

32 unchanged sentences

The calculation of basic and diluted EPS is presented below:

Three Months Ended March 31,

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

(in thousands, except share and per share data) 2021 2020 2021 2020

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(1) The three months ended March 31, 2021 and 2020 includes participating securities which can be converted into a fixed amount of our shares.

For the three months ended March 31, 2021 and 2020, 803,800 and 60,838 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the three months ended March 31, 2021, we issued 6,594 common shares to certain directors as compensation.

During the three months ended March 31, 2021, certain holders of Class B Units (see Note 16) converted 9,470 Class B Units in exchange for 7,013 common shares.

Preferred Shares

In March 2021, in a public offering, we issued 4,200,000 shares of 8.25 % Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”), par value $ 0.01 per share, with a liquidation preference of $ 25.00 per share for net proceeds of approximately $ 101.2 million.

See Note 14 for information related to options issued to the Manager in connection with such offering.

(1) Three and six months ended June 30, 2021 and 2020 includes participating securities which can be converted into a fixed amount of our shares.

For the three months ended June 30, 2021 and 2020, 964,696 and 0 shares, respectively, and for the six months ended June 30, 2021 and 2020, 890,300 and 0 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, 2021, we issued 17,155 common shares to certain directors as compensation.

During the six months ended June 30, 2021, certain holders of Class B Units (see Note 16) converted 9,470 Class B Units in exchange for 7,013 common shares.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

Preferred Shares

See Note 14 for information related to options issued to the Manager in connection with such offering.

COMMITMENTS AND CONTINGENCIES

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

The contingency related to $ 5.0 million of the total $ 15.0 million was resolved during the quarter ended March 31, 2021.

The contingency related to $ 5.0 million of the total $ 15.0 million was resolved during the six months ended June 30, 2021.

The $ 5.0 million payment was recorded as a payable and included in the cost of the asset acquisition.

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

Under the agreement, which will take effect in the second quarter of 2021, Jefferson is obligated to pay fixed marketing fees over the two -year agreement, which totals a minimum of $ 10.2 million per year.

Under the agreement, which took effect in the second quarter of 2021, Jefferson is obligated to pay fixed marketing fees over the two-year agreement, which totals a minimum of $ 10.2 million per year.

SUBSEQUENT EVENTS

Senior Notes due 2028

On April 12, 2021, we issued $ 500 million aggregate principal amount of senior unsecured notes due 2028 (the “Senior Notes due 2028”).

The Senior Notes due 2028 bear interest at a rate of 5.50 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year, commencing on November 1, 2021.

On May 7, 2021, we intend to use a portion of the net proceeds to redeem in full the Senior Notes due 2022, which total $ 400 million aggregate principal plus accrued and unpaid interest.

On April 29, 2021, 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 March 31, 2021, payable on May 25, 2021 to the holders of record on May 14, 2021.

Additionally, on April 29, 2021, our Board of Directors also declared a cash dividend on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 per share, $ 0.50 per share and $0.46 per share, respectively, payable on June 15, 2021 to the holders of record on June 1, 2021.

Transtar Acquisition

As previously announced, on June 7, 2021, Percy Acquisitions LLC, an indirect subsidiary of ours, entered into a purchase agreement with United States Steel Corporation (the “Seller”), to purchase 100 % of the equity interests of the Seller’s wholly owned short-line railroad subsidiary, Transtar, LLC from the Seller, for a cash purchase price of $ 640 million, subject to certain customary adjustments set forth in the purchase agreement.

This transaction closed on July 28, 2021.

In connection with this acquisition, we entered into a senior unsecured bridge term loan facility (the “Bridge Facility”) in an aggregate principal amount of $ 650 million in order to finance the transaction and pay fees and expenses related thereto.

The Bridge Facility matures in one year and bears interest at the Adjusted Eurodollar Rate (determined in accordance with the credit agreement) plus 5.50 % per annum (the “Initial Margin”) for the first three-month period.

The Initial Margin will increase by an additional 50 basis points at the end of each three-month period thereafter until maturity.

Due to the timing of the acquisition, the initial accounting for the acquisition is incomplete.

As such, we are not able to disclose certain information relating to the acquisition, including the preliminary fair value of assets acquired and liabilities assumed.

We expect to complete the initial accounting for the acquisition during the third quarter of 2021.

On July 28, 2021, 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, 2021, payable on August 30, 2021 to the holders of record on August 16, 2021.

Additionally, on July 28, 2021, our Board of Directors also declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 , $ 0.50 and $ 0.52 per share, respectively, payable on September 15, 2021 to the holders of record on September 1, 2021.

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