What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-07-29 compared with 2021-04-30 · 230 added, 128 removed, 379 unchanged (49% of the section changed)

6 unchanged sentences

We are externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), which has a dedicated team of experienced professionals focused on the acquisition of transportation and infrastructure assets since 2002.

As of March 31, 2021, we had total consolidated assets of $3.6 billion and total equity of $1.1 billion.

As of June 30, 2021, we had total consolidated assets of $3.6 billion and total equity of $1.0 billion.

Impact of COVID-19

Due to the outbreak of COVID-19, we have taken measures to protect the health and safety of our employees, including having employees work remotely, where possible.

Market conditions due to the outbreak of COVID-19 resulted in asset impairment charges and a decline in our equipment leasing revenues during the three months ended March 31, 2021.

Market conditions due to the outbreak of COVID-19 resulted in asset impairment charges and a decline in our equipment leasing revenues during the six months ended June 30, 2021.

A number of our lessees continue to experience increased financial stress due to the significant decline in travel demand, particularly as various regions experience spikes in COVID-19 cases.

A number of these lessees have been placed on non-accrual status as of March 31, 2021;

A number of these lessees have been placed on non-accrual status as of June 30, 2021;

however, we believe our overall portfolio exposure is limited by maintenance reserves and security deposits which are secured against lessee defaults.

The value of these deposits was $175.6 million as of March 31, 2021.

The value of these deposits was $155.1 million as of June 30, 2021.

The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration, severity and spread of the pandemic, as well as additional waves of COVID-19 infections and the ultimate impact of related restrictions imposed by the U.S.

31 unchanged sentences

Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

Comparison of the three months ended March 31, 2021 and 2020

Comparison of the three and six months ended June 30, 2021 and 2020

The following table presents our consolidated results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

21 unchanged sentences

Other (expense) income

Equity in earnings of unconsolidated entities 1,374 265 1,109

Equity in losses of unconsolidated entities (7,152) (3,209) (3,943) (5,778) (2,944) (2,834)

Gain (loss) on sale of assets, net 3,987 768 3,219 4,798 (1,051) 5,849

1 unchanged sentence

Interest income 454 22 432 739 63 676

Other income 181 33 148

Total other income (expense) 2,651 (6,204) 8,855

Other (expense) income (884) (1) (883) (703) 32 (735)

Total other expense (6,849) (2,420) (4,429) (4,198) (8,624) 4,426

Loss from continuing operations before income taxes (38,248) (19,478) (18,770) (72,955) (23,967) (48,988)

Provision for (benefit from) income taxes 169 (98) 267

Benefit from income taxes (1,640) (3,750) 2,110 (1,471) (3,848) 2,377

Net loss from continued operations (36,608) (15,728) (20,880) (71,484) (20,119) (51,365)

5 unchanged sentences

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

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

Net loss attributable to shareholders from continuing operations $ (36,534) $ (15,695) $ (20,839) $ (71,074) $ (19,889) $ (51,185)

Provision for (benefit from) income taxes 169 (98) 267

Benefit from income taxes (1,640) (3,750) 2,110 (1,471) (3,848) 2,377

Equity-based compensation expense 1,439 411 1,028 2,553 702 1,851

9 unchanged sentences

(11) 126 (137) 2,391 (287) 2,678

Equity in earnings of unconsolidated entities (1,374) (265) (1,109)

Equity in losses of unconsolidated entities 7,152 3,209 3,943 5,778 2,944 2,834

Non-controlling share of Adjusted EBITDA (3)

2 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2021 and 2020:

(1) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) depreciation and amortization expense of $47,371 and $41,720, (ii) lease intangible amortization of $1,198 and $931 and (iii) amortization for lease incentives of $5,599 and $5,690, respectively.

(2) Includes the following items for the three months ended March 31, 2021 and 2020:

(i) net income of $1,180 and $223, (ii) interest expense of $187 and $35, (iii) depreciation and amortization expense of $1,912 and $962, (iv) acquisition and transaction expenses of $0 and $81 and (v) changes in fair value of non-hedge derivatives of $(877) and $(1,714), respectively.

(3) Includes the following items for the three months ended March 31, 2021 and 2020:

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) depreciation and amortization expense of $91,906 and $83,917, (ii) lease intangible amortization of $1,950 and $2,063 and (iii) amortization for lease incentives of $12,955 and $11,425, respectively.

(2) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) net loss of $(7,353) and $(3,226), (ii) interest expense of $340 and $446, (iii) depreciation and amortization expense of $1,900 and $1,446, (iv) acquisition and transaction expenses of $0 and $531, (v) changes in fair value of non-hedge derivative instruments of $5,078 and $929 and (vi) asset impairment of $24 and $0, respectively.

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) net loss of $(6,173) and $(3,003), (ii) interest expense of $527 and $481, (iii) depreciation and amortization expense of $3,812 and $2,408, (iv) acquisition and transaction expenses of $0 and $612, (v) changes in fair value of non-hedge derivative instruments of $4,201 and $(785) and (vi) asset impairment of $24 and $0, respectively.

(3) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) equity-based compensation of $292 and $52, (ii) provision for income taxes of $13 and $15, (iii) interest expense of $732 and $512, (iv) depreciation and amortization expense of $2,172 and $1,522 and (v) changes in fair value of non-hedge derivative instruments of $48 and $0, respectively.

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) equity based compensation of $490 and $99, (ii) provision for income taxes of $26 and $43, (iii) interest expense of $1,013 and $1,231, (iv) depreciation and amortization expense of $3,983 and $3,048, (v) changes in fair value of non-hedge derivative instruments of $(226) and $38 and (vi) loss on extinguishment of debt of $0 and $992, respectively.

Total revenues decreased $35.7 million primarily due to lower revenues of $26.9 million in the Aviation Leasing segment and $14.0 million in the Jefferson Terminal segment, partially offset by higher revenues of $7.8 million in the Ports and Terminals segment.

Comparison of the three months ended June 30, 2021 and 2020

Total revenues increased $2.6 million primarily due to higher revenues of $3.2 million in the Aviation Leasing segment and $2.3 million in the Ports and Terminals segment, partially offset by lower revenues of $1.6 million in the Jefferson Terminal segment and $1.4 million in Corporate and Other.

Equipment Leasing

Lease income decreased $9.6 million, primarily due to an increase in aircraft redelivered and a decrease in the number of engines on lease and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft placed on lease.

Maintenance revenue decreased $16.5 million, primarily due to the reasons mentioned above and lower aircraft and engine utilization as a result of the COVID-19 pandemic.

Other revenue decreased $3.7 million, primarily due to the settlement of an engine loss during the three months ended March 31, 2020.

Lease income decreased $1.7 million, primarily due to an increase in aircraft redelivered and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft and engines placed on lease.

Maintenance revenue increased $4.9 million, primarily due to an increase in the number of engines placed on lease and higher aircraft and engine utilization, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft.

Other revenue decreased $1.5 million, which primarily reflects (i) a decrease of $2.0 million in the offshore energy business primarily due to one of our vessels being on hire longer in 2020 compared to 2021, partially offset by (ii) an increase of $0.6 million in the Aviation Leasing segment primarily due to an increase in engine parts sales, partially offset by lower end-of-lease redelivery compensation.

Infrastructure

Terminal services revenues decreased $1.7 million which primarily reflects lower volumes at Jefferson Terminal due to lower global oil demand related to COVID-19.

Other revenue increased $2.4 million, primarily due to operations commencing at the LPG facility at Repauno.

Comparison of the six months ended June 30, 2021 and 2020

Total revenues decreased $33.1 million, primarily due to lower revenues of $23.7 million in the Aviation Leasing segment, $15.6 million in the Jefferson Terminal segment and $3.9 million in Corporate and Other, partially offset by higher revenues of $10.1 million in the Ports and Terminals segment.

Equipment Leasing

Lease income decreased $11.3 million, primarily due to an increase in aircraft redelivered and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft and engines placed on lease.

Maintenance revenue decreased $11.6 million, primarily due to an increase in aircraft and engines redelivered and a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft, partially offset by an increase in aircraft and engine utilization and an increase in the number of engines placed on lease.

Other revenue decreased $5.2 million, primarily due to (i) a decrease of $2.7 million in the Aviation Leasing segment primarily due to lower end-of-lease redelivery compensation and the settlement of an engine loss during the six months ended June 30, 2020, partially offset by an increase in engine parts sales and (ii) a decrease of $2.5 million in the offshore energy business primarily due to one of our vessels being on hire longer in 2020 compared to 2021.

Infrastructure

Crude marketing revenues decreased $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019.

Terminal services revenues decreased $7.7 million which primarily reflects lower volumes at Jefferson Terminal due to lower global oil demand related to COVID-19.

Other revenue increased $8.0 million, primarily due to an unrealized gain of $7.9 million recorded on butane forward purchase and sale contracts at Repauno.

Total expenses increased $3.4 million, primarily due to higher (i) interest expense, (ii) depreciation and amortization and (iii) asset impairment charges, partially offset by lower (iv) operating expenses, (v) acquisition and transaction expense and (vi) management fees and incentive allocation to affiliate.

Other revenue increased $10.4 million, primarily due to (i) an unrealized gain of $6.6 million recorded on butane forward purchase and sale contracts at Repauno and (ii) operations commencing at the LPG facility at Repauno.

Comparison of the three months ended June 30, 2021 and 2020

Total expenses increased $16.9 million, primarily due to higher (i) interest expense, (ii) operating expenses and (iii) depreciation and amortization, partially offset by lower (iv) asset impairment charges.

Interest expense increased $15.7 million, primarily due to:

• an increase of $12.5 million in Corporate and Other which reflects an increase in the average outstanding debt of approximately $521.5 million due to increases in (i) the Senior Notes due 2025 of $407.5 million, (ii) the Senior Notes due 2027 of $400.0 million, (iii) the Revolving Credit Facility (as defined below in Liquidity and Capital Resources) of $36.7 million, partially offset by decreases in (iv) the Senior Notes due 2022 of $296.5 million and (v) the FTAI Pride Credit Agreement of $24.0 million, which was repaid in full in March 2020;

• a decrease of $2.2 million at Jefferson Terminal due a debt refinancing in the first quarter of 2020 which lowered their average interest rate.

Depreciation and amortization increased $2.3 million primarily due to assets placed into service at Repauno and Jefferson Terminal.

Asset impairment increased $2.1 million due to an impairment charge in 2021 in the Aviation Leasing segment.

Operating expenses decreased $8.4 million which primarily reflects decreases in (i) cost of sales of $8.4 million primarily due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) facility operations of $1.6 million primarily due to lower volumes at Jefferson Terminal.

Acquisition and transaction expense decreased $1.6 million which primarily reflects lower compensation and related costs associated with the acquisition of aviation leasing equipment.

• an increase of $14.9 million in Corporate and Other which reflects an increase in the average outstanding debt of approximately $652.1 million due to increases in (i) the Senior Notes due 2028 of $500.0 million, (ii) the Senior Notes due 2025 of $407.1 million and (iii) the Senior Notes due 2027 of $400.0 million, partially offset by decreases in (iv) the Senior Notes due 2022 of $565.0 million, which was redeemed in full in May 2021 and (v) the Revolving Credit Facility (as defined below in Liquidity and Capital Resources) of $90.0 million;

• an increase of $0.9 million at Jefferson Terminal due to the EB-5 Loan Agreement which commenced in January 2021.

Operating expenses increased $6.6 million which primarily reflects:

• an increase of approximately $4.0 million in costs associated with the sale of inventory in the Aviation Leasing segment;

• an increase of $1.0 million in compensation and benefits primarily in the Ports and Terminals segment and Corporate and Other;

• an increase of $0.8 million in repairs and maintenance in our offshore energy business.

Depreciation and amortization increased $5.7 million primarily due to assets placed into service at Repauno and Jefferson Terminal and additional assets acquired in the Aviation Leasing segment.

Asset impairment decreased $10.4 million due to higher impairment charges in 2020 compared to 2021 in the Aviation Leasing segment.

Comparison of the six months ended June 30, 2021 and 2020

Total expenses increased $20.3 million, primarily due to higher (i) interest expense and (ii) depreciation and amortization, partially offset by lower (iii) asset impairment charges, (iv) operating expenses and (v) management fees and incentive allocation to affiliate.

Interest expense increased $25.8 million, primarily due to:

• an increase of $27.3 million in Corporate and Other which reflects an increase in the average outstanding debt of approximately $586.8 million due to increases in (i) the Senior Notes due 2025 of $407.3 million, (ii) the Senior Notes due 2027 of $400.0 million and (iii) the Senior Notes due 2028 of $250.0 million, partially offset by decreases in (iv) the Senior Notes due 2022 of $431.9 million, which was redeemed in full in May 2021, (v) the Revolving Credit Facility of $26.7 million and (vi) the FTAI Pride Credit Agreement of $12.0 million, which was repaid in full in March 2020;

• a decrease of $1.3 million at Jefferson Terminal due to (i) a debt refinancing in the first quarter of 2020 which lowered their average interest rate, partially offset by (ii) the EB-5 Loan Agreement which commenced in January 2021.

Depreciation and amortization increased $8.0 million primarily due to assets placed into service at Repauno and Jefferson Terminal and additional assets acquired in the Aviation Leasing segment.

Asset impairment decreased $8.3 million due to higher impairment charges in 2020 compared to 2021 in the Aviation Leasing segment.

Operating expenses decreased $1.8 million which primarily reflects:

• a decrease in cost of sales of $8.2 million primarily due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019;

• a decrease in bad debt expense of $2.5 million primarily in the Aviation Leasing segment;

partially offset by

• an increase of approximately $4.0 million in costs associated with the sale of inventory in the Aviation Leasing segment;

• an increase in repairs and maintenance of $1.9 million primarily in our offshore energy business;

• an increase of $1.8 million in compensation and benefits primarily in the Ports and Terminals segment and Corporate and Other.

Management fees and incentive allocation to affiliate decreased $1.4 million, which reflects a decrease in the base management fee as our average total equity is lower in 2021 compared to 2020.

Other income (expense)

Total other income increased $8.9 million during the three months ended March 31, 2021, which primarily reflects (i) a loss on extinguishment of debt of $4.7 million in 2020 and (ii) an increase of $2.6 million in gain on sale of assets, net in the Aviation Leasing segment.

Net (loss) income from continuing operations

Net income from continuing operations decreased $30.5 million during the three months ended March 31, 2021, primarily due to the changes noted above.

Other expense

Total other expense increased $4.4 million during the three months ended June 30, 2021, which primarily reflects (i) an increase of $3.9 million in equity in losses of unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge and (ii) a loss on extinguishment of debt of $3.3 million related to the redemption of the Senior Notes due 2022, partially offset by (iii) an increase of $3.2 million in gain on sale of assets, net in the Aviation Leasing segment.

Total other expense decreased $4.4 million during the six months ended June 30, 2021, which primarily reflects (i) an increase of $5.8 million in gain on sale of assets, net in the Aviation Leasing segment and (ii) a net decrease in loss on extinguishment of debt of $1.5 million, partially offset by (iii) an increase of $2.8 million in equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

Net loss from continuing operations

Net loss from continuing operations increased $20.9 million and $51.4 million during the three and six months ended June 30, 2021, respectively, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $24.8 million during the three months ended March 31, 2021, primarily due to the changes noted above.

Adjusted EBITDA increased $1.5 million and decreased $23.4 million during the three and six months ended June 30, 2021, respectively, primarily due to the changes noted above.

Aviation Leasing Segment

As of March 31, 2021, in our Aviation Leasing segment, we own and manage 279 aviation assets, consisting of 80 commercial aircraft and 199 engines.

As of March 31, 2021, 67 of our commercial aircraft and 114 of our engines were leased to operators or other third parties.

As of June 30, 2021, in our Aviation Leasing segment, we own and manage 284 aviation assets, consisting of 77 commercial aircraft and 207 engines.

As of June 30, 2021, 68 of our commercial aircraft and 134 of our engines were leased to operators or other third parties.

Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.

Our aviation equipment was approximately 73% utilized during the three months ended March 31, 2021, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.

Our aviation equipment was approximately 74% utilized during the three months ended June 30, 2021, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.

Our aircraft currently have a weighted average remaining lease term of 36 months, and our engines currently on-lease have an average remaining lease term of 18 months.

3 unchanged sentences

Purchases — 9 9

Sales (3) — (3)

Transfers — (7) (7)

Assets at March 31, 2021 15 65 80

Assets at June 30, 2021 12 65 77

Assets at January 1, 2021 88 98 186

2 unchanged sentences

Transfers — 9 9

Assets at March 31, 2021 85 114 199

Assets at June 30, 2021 82 125 207

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

16 unchanged sentences

Income before income taxes 38,628 26,140 12,488 55,358 67,308 (11,950)

(Benefit from) provision for income taxes (42) 45 (87)

Benefit from income taxes (4) (3,427) 3,423 (46) (3,382) 3,336

Net income 38,632 29,567 9,065 55,404 70,690 (15,286)

2 unchanged sentences

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

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

Net income attributable to shareholders $ 38,632 $ 29,567 $ 9,065 $ 55,404 $ 70,690 $ (15,286)

(Benefit from) provision for income taxes (42) 45 (87)

Benefit from income taxes (4) (3,427) 3,423 (46) (3,382) 3,336

Equity-based compensation expense — — — — — —

13 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2021 and 2020:

(1) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) depreciation expense of $33,732 and $32,203, (ii) lease intangible amortization of $1,198 and $931 and (iii) amortization for lease incentives of $5,599 and $5,690, respectively.

(2) Includes the following items for the three months ended March 31, 2021 and 2020:

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) depreciation expense of $66,295 and $64,834, (ii) lease intangible amortization of $1,950 and $2,063 and (iii) amortization for lease incentives of $12,955 and $11,425, respectively.

(2) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) net loss of $(341) and $(594) and (ii) depreciation and amortization of $55 and $0, respectively.

Total revenue decreased $26.9 million driven by lower lease income and maintenance revenue.

• Lease income decreased $7.2 million primarily due to an increase in aircraft redelivered and a decrease in the number of engines on lease and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft placed on lease.

• Maintenance revenue decreased $16.5 million primarily due to the reasons mentioned above and lower aircraft and engine utilization as a result of the COVID-19 pandemic.

• Other revenue decreased $3.2 million primarily due to the settlement of an engine loss during the three months ended March 31, 2020.

Total expenses increased $0.7 million, primarily due to an increase in asset impairment and operating expenses, partially offset by a decrease in acquisition and transaction expenses.

• Asset impairment increased $2.1 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation.

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) net loss of $(681) and $(1,185) and (ii) depreciation and amortization of $87 and $0, respectively.

Comparison of the three months ended June 30, 2021 and 2020

Total revenue increased $3.2 million driven by higher maintenance revenue and other revenue, partially offset by lower lease income.

• Maintenance revenue increased $4.9 million primarily due to an increase in the number of engines placed on lease and higher aircraft and engine utilization, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft.

• Other revenue increased $0.6 million primarily due to an increase in engine parts sales, partially offset by lower end-of-lease redelivery compensation.

• Lease income decreased $2.3 million primarily due to an increase in aircraft redelivered and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft and engines placed on lease.

Comparison of the six months ended June 30, 2021 and 2020

Total revenue decreased $23.7 million driven by lower lease income, maintenance revenue and other revenue.

• Maintenance revenue decreased $11.6 million primarily due to an increase in aircraft and engines redelivered and a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft, partially offset by an increase in aircraft and engine utilization and an increase in the number of engines placed on lease.

• Lease income decreased $9.4 million primarily due to an increase in aircraft redelivered and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft and engines placed on lease.

• Other revenue decreased $2.7 million primarily due to lower end-of-lease redelivery compensation and the settlement of an engine loss during the six months ended June 30, 2020, partially offset by an increase in engine parts sales.

Comparison of the three months ended June 30, 2021 and 2020

Total expenses decreased $5.5 million, primarily due to a decrease in asset impairment and acquisition and transaction expenses, partially offset by an increase in operating expenses and depreciation and amortization expense.

• Asset impairment decreased $10.4 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation.

See Note 4 to the consolidated financial statements for additional information.

• Operating expenses increased $0.2 million primarily as a result of an increase in shipping and storage fees, professional fees and other operating expenses, partially offset by a decrease in bad debt expense.

• Acquisition and transaction expense decreased $1.2 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment.

• Operating expenses increased $4.6 million primarily as a result of an increase in costs associated with the sale of engine parts, shipping and storage fees, professional fees and other operating expenses, partially offset by a decrease in bad debt expense.

• Depreciation and amortization expense increased $1.5 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Comparison of the six months ended June 30, 2021 and 2020

Total expenses decreased $4.8 million, primarily due to a decrease in asset impairment and acquisition and transaction expenses, partially offset by an increase in operating expenses and depreciation and amortization expense.

• Asset impairment decreased $8.3 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation.

See Note 4 to the consolidated financial statements for additional information.

• Acquisition and transaction expense decreased $2.8 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment.

• Operating expenses increased $4.7 million primarily as a result of an increase in costs associated with the sale of engine parts, shipping and storage fees, professional fees and other operating expenses, partially offset by a decrease in bad debt expense.

• Depreciation and amortization expense increased driven $1.5 million by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Other income (expense)

Total other income increased $3.1 million primarily due to an increase of $2.6 million in gain on the sale of leasing equipment in 2021, an increase of $0.3 million in interest income and a decrease of $0.3 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss.

Total other income increased $3.8 million during the three months ended June 30, 2021, primarily due to an increase of $3.2 million in gain on the sale of leasing equipment in 2021, an increase of $0.3 million in interest income and a decrease of $0.3 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss.

Total other income increased $6.9 million during the six months ended June 30, 2021, primarily due to an increase of $5.8 million in gain on the sale of leasing equipment in 2021, an increase of $0.6 million in interest income and a decrease of $0.5 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $22.7 million primarily due to the changes noted above.

Adjusted EBITDA decreased $2.6 million and $20.0 million during the three and six months ended June 30, 2021, respectively, primarily due to the changes noted above.

Jefferson Terminal Segment

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

3 unchanged sentences

Crude marketing revenues — — — — 8,210 (8,210)

Total infrastructure revenues 11,527 13,081 (1,554) 22,246 37,822 (15,576)

Total revenues 11,527 13,081 (1,554) 22,246 37,822 (15,576)

4 unchanged sentences

Other (expense) income

Loss on sale of assets, net — (7) 7 — (7) 7

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

Interest income — — — — 22 (22)

Other income 181 33 148

Total other income (expense) 181 (4,669) 4,850

Other (expense) income (886) (1) (885) (705) 32 (737)

Total other expense (886) (8) (878) (705) (4,677) 3,972

Loss before income taxes (13,664) (8,687) (4,977) (23,406) (21,212) (2,194)

4 unchanged sentences

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

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

15 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2021 and 2020:

(1) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) equity-based compensation of $286 and $45, (ii) provision for income taxes of $13 and $15, (iii) interest expense of $722 and $485 and (iv) depreciation and amortization expense of $2,096 and $1,504, respectively.

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) equity-based compensation of $475 and $90, (ii) provision for income taxes of $26 and $43, (iii) interest expense of $993 and $1,205, (iv) changes in fair value of non-hedge derivative instruments of $0 and $38, (v) depreciation and amortization expense of $3,831 and $3,022 and (vi) loss on extinguishment of debt of $0 and $992, respectively.

Total revenues decreased $14.0 million primarily due to decreases in (i) crude marketing revenues of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) terminal services revenue of $6.1 million which primarily reflects lower volumes due to lower global oil demand related to COVID-19.

Total expenses decreased $12.0 million which reflects:

Total revenues decreased $1.6 million during the three months ended June 30, 2021, primarily due to a decrease in terminal services revenue of $1.7 million which primarily reflects lower volumes due to lower global oil demand related to COVID-19.

Total revenues decreased $15.6 million during the six months ended June 30, 2021, primarily due to decreases in (i) crude marketing revenues of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) terminal services revenue of $7.8 million which primarily reflects lower volumes due to lower global oil demand related to COVID-19.

Total expenses increased $2.5 million during the three months ended June 30, 2021, which reflects:

• an increase in depreciation and amortization of $2.2 million due to additional assets being placed into service;

• an increase in interest expense of $0.9 million primarily due to the EB-5 Loan Agreement which commenced in January 2021.

Total expenses decreased $9.4 million during the six months ended June 30, 2021, which reflects:

• a decrease in operating expenses of $10.7 million, primarily due to (i) Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) a decrease in facility operations expense due to lower volumes;

• a decrease in interest expense of $2.2 million due to a debt refinancing in the first quarter of 2020 which lowered the average interest rate;

• a decrease in interest expense of $1.3 million due to a debt refinancing in the first quarter of 2020 which lowered the average interest rate, partially offset by the EB-5 Loan Agreement which commenced in January 2021;

• an increase in depreciation and amortization of $2.6 million due to additional assets being placed into service.

Other income (expense)

Total other income increased $4.9 million which primarily reflects a loss on extinguishment of debt of $4.7 million in 2020.

Other expense

Total other expense increased $0.9 million during the three months ended June 30, 2021, primarily due to losses related to crude oil forward transactions.

Total other expense decreased $4.0 million during the six months ended June 30, 2021, which primarily reflects a loss on extinguishment of debt of $4.7 million in 2020, partially offset by losses related to crude oil forward transactions.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $1.7 million primarily due to the changes noted above.

Adjusted EBITDA increased $0.6 million and decreased $1.2 million during the three and six months ended June 30, 2021, respectively, primarily due to the changes noted above.

Ports and Terminals

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

8 unchanged sentences

Total expenses 6,339 2,626 3,713 11,931 6,177 5,754

Equity in earnings of unconsolidated entities 1,542 906 636

Total other income 1,542 906 636

Income (loss) before income taxes 4,046 (2,331) 6,377

Provision for (benefit from) income taxes 154 (281) 435

Net income (loss) 3,892 (2,050) 5,942

Net income (loss) attributable to non-controlling interest in consolidated subsidiaries 55 (75) 130

Net income (loss) attributable to shareholders $ 3,837 $ (1,975) $ 5,812

Other (expense) income

Equity in losses of unconsolidated entities (7,015) (2,582) (4,433) (5,473) (1,676) (3,797)

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

Interest income 91 — 91 91 — 91

Total other expense (6,908) (2,582) (4,326) (5,366) (1,676) (3,690)

Loss before income taxes (10,903) (5,208) (5,695) (6,857) (7,539) 682

Benefit from income taxes (1,621) (597) (1,024) (1,467) (878) (589)

Net loss (9,282) (4,611) (4,671) (5,390) (6,661) 1,271

Net loss attributable to non-controlling interest in consolidated subsidiaries (87) (92) 5 (32) (167) 135

Net loss attributable to shareholders $ (9,195) $ (4,519) $ (4,676) $ (5,358) $ (6,494) $ 1,136

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

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

Net income (loss) attributable to shareholders $ 3,837 $ (1,975) $ 5,812

Provision for (benefit from) income taxes 154 (281) 435

Net loss attributable to shareholders $ (9,195) $ (4,519) $ (4,676) $ (5,358) $ (6,494) $ 1,136

Benefit from income taxes (1,621) (597) (1,024) (1,467) (878) (589)

Equity-based compensation expense 169 197 (28) 442 273 169

8 unchanged sentences

246 753 (507) 2,951 981 1,970

Equity in earnings of unconsolidated entities (1,542) (906) (636)

Equity in losses of unconsolidated entities 7,015 2,582 4,433 5,473 1,676 3,797

Non-controlling share of Adjusted EBITDA (2)

(140) (52) (88) 39 (61) 100

Adjusted EBITDA (non-GAAP) $ 376 $ (885) $ 1,261 $ 508 $ (2,201) $ 2,709

________________________________________________________

(1) Includes the following items for the three months ended March 31, 2021 and 2020:

(i) net income of $1,542 and $894, (ii) interest expense of $160 and $5, (iii) depreciation and amortization expense of $1,880 and $962, (iv) acquisition and transaction expenses of $0 and $81 and (v) changes in fair value of non-hedge derivative instruments of $(877) and $(1,714), respectively.

(2) Includes the following items for the three months ended March 31, 2021 and 2020:

(1) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) net loss of $(7,015) and $(2,570), (ii) interest expense of $314 and $417, (iii) depreciation and amortization expense of $1,845 and $1,446, (iv) acquisition and transaction expenses of $0 and $531, (v) changes in fair value of non-hedge derivative instruments of $5,078 and $929 and (vi) asset impairment of $24 and $0, respectively.

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) net loss of $(5,473) and $(1,676), (ii) interest expense of $474 and $422, (iii) depreciation and amortization expense of $3,725 and $2,408, (iv) acquisition and transaction expenses of $0 and $612, (v) changes in fair value of non-hedge derivative instruments of $4,201 and $(785) and (vi) asset impairment of $24 and $0, respectively.

(2) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) equity-based compensation of $6 and $7, (ii) interest expense of $10 and $27, (iii) depreciation and amortization expense of $76 and $18 and (iv) changes in fair value of non-hedge derivative instruments of $48 and $0, respectively.

Total revenue increased $7.8 million primarily due to an unrealized gain of $7.9 million recorded on butane forward purchase and sale contracts at Repauno.

Total expenses increased $2.0 million which reflects higher (i) depreciation and amortization of $1.8 million at Repauno due to additional assets placed into service and (ii) operating expenses of $1.1 million, primarily due to higher compensation and related costs at Repauno, partially offset by lower (iii) acquisition and transaction expense of $0.8 million at Long Ridge due to lower professional fees.

Total other income increased $0.6 million due to an increase in equity in earnings at Long Ridge .

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) equity-based compensation of $15 and $9, (ii) interest expense of $20 and $26, (iii) depreciation and amortization expense of $152 and $26 and (iv) changes in fair value of non-hedge derivative instruments of $(226) and $0, respectively.

Total revenue increased $2.3 million during the three months ended June 30, 2021, primarily due to operations commencing at the LPG facility at Repauno.

Total revenue increased $10.1 million during the six months ended June 30, 2021, primarily due to (i) an unrealized gain of $6.6 million recorded on butane forward purchase and sale contracts at Repauno and (ii) operations commencing at the LPG facility at Repauno.

Total expenses increased $3.7 million during the three months ended June 30, 2021 which reflects (i) higher operating expenses of $2.0 million due to increased activit y at Repauno and (ii) higher depreciation and amortization of $1.8 million due to operations commencing at the LPG facility and additional assets placed into service at Repauno.

Total expenses increased $5.8 million during the six months ended June 30, 2021 which reflects (i) higher operating expenses of $3.1 million due to increased activit y at Repauno and (ii) higher depreciation and amortization of $3.7 million due to operations commencing at the LPG facility and additional assets placed into service at Repauno, partially offset by (iii) lower acquisition and transaction expense of $0.8 million at Long Ridge due to lower professional fees.

Other expense

Total other expense increased $4.3 million and $3.7 million during the three and six months ended June 30, 2021, respectively, which reflects an increase in equity in losses primarily due to unrealized losses on power swaps at Long Ridge.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $1.4 million primarily due to the changes noted above.

Adjusted EBITDA increased $1.3 million and $2.7 million during the three and six months ended June 30, 2021, respectively, primarily due to the changes noted above.

Corporate and Other

The following table presents our results of operations:

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

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Total expenses 53,868 37,664 16,204 102,032 73,215 28,817

Other income (expense)

Other (expense) income

Equity in earnings (losses) of unconsolidated entities 204 (33) 237 376 (83) 459

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

Interest income 6 5 1 24 12 12

Total other income (expense) 190 (43) 233

Other income 2 — 2 2 — 2

Total other expense (3,042) (28) (3,014) (2,852) (71) (2,781)

Loss before income taxes (52,309) (31,723) (20,586) (98,050) (62,524) (35,526)

Provision for income taxes — 3 (3)

(Benefit from) provision for income taxes (74) 200 (274) (74) 203 (277)

Net loss (52,235) (31,923) (20,312) (97,976) (62,727) (35,249)

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

Three Months Ended March 31, Change

Three Months Ended June 30, Change Six Months Ended

June 30, Change

(in thousands) 2021 2020 2021 2020

Net loss attributable to shareholders $ (58,786) $ (36,002) $ (22,784) $ (109,152) $ (71,345) $ (37,807)

Provision for income taxes — 3 (3)

(Benefit from) provision for income taxes (74) 200 (274) (74) 203 (277)

Equity-based compensation expense — — — — — —

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

Equity in losses (earnings) of unconsolidated entities (172) 50 (222)

29 (33) 62 34 (83) 117

Equity in (earnings) losses of unconsolidated entities (204) 33 (237) (376) 83 (459)

Non-controlling share of Adjusted EBITDA — — — — — —

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________________________________________________________

(1) Includes the following items for the three months ended March 31, 2021 and 2020:

(1) Includes the following items for the three months ended June 30, 2021 and 2020:

(i) net income (loss) of $3 and $(62) and (ii) interest expense of $26 and $29, respectively.

Includes the following items for the six months ended June 30, 2021 and 2020:

(i) net loss of $(19) and $(142) and (ii) interest expense of $53 and $59, respectively.

Equipment Leasing

Total revenues decreased $3.0 million in the offshore energy business as one of our vessels was off-hire in 2021 while it was on-hire in 2020.

Infrastructure

Total revenues increased $0.4 million due to higher volumes in our railcar cleaning business.

Total expenses increased $12.6 million primarily due to higher (i) interest expense and (ii) acquisition and transaction expense, partially offset by lower (iii) management fees and incentive allocation to affiliate.

Interest expense increased $12.5 million, which reflects an increase in the average outstanding debt of approximately $521.5 million due to increases in (i) the Senior Notes due 2025 of $407.5 million, (ii) the Senior Notes due 2027 of $400.0 million, (iii) the Revolving Credit Facility of $36.7 million, partially offset by decreases in (iv) the Senior Notes due 2022 of $296.5 million and (v) the FTAI Pride Credit Agreement of $24.0 million, which was repaid in full in March 2020.

Total revenues decreased $1.4 million during the three months ended June 30, 2021, primarily due to one of our vessels being on hire longer in 2020 compared to 2021 in the offshore energy business.

Total revenues decreased $3.9 million during the six months ended June 30, 2021, primarily due to (i) a decrease of $4.4 million in the offshore energy business primarily due to one of our vessels being on hire longer in 2020 compared to 2021, partially offset by (ii) an increase of $0.5 million in our railcar cleaning business due to higher volumes.

Comparison of the three months ended June 30, 2021 and 2020

Total expenses increased $16.2 million primarily due to higher (i) interest expense and (ii) acquisition and transaction expense, partially offset by lower (iii) general and administrative expense.

Interest expense increased $14.9 million, which reflects an increase in the average outstanding debt of approximately $652.1 million due to increases in (i) the Senior Notes due 2028 of $500.0 million, (ii) the Senior Notes due 2025 of $407.1 million and (iii) the Senior Notes due 2027 of $400.0 million, partially offset by decreases in (iv) the Senior Notes due 2022 of $565.0 million, which was redeemed in full in May 2021 and (v) the Revolving Credit Facility (as defined below in Liquidity and Capital Resources) of $90.0 million.

Acquisition and transaction expense increased $2.0 million, primarily due to higher professional fees.

General and administrative expense decreased $0.7 million, primarily due to lower professional fees.

Comparison of the six months ended June 30, 2021 and 2020

Total expenses increased $28.8 million primarily due to higher (i) interest expense and (ii) acquisition and transaction expense, partially offset by lower (iii) management fees and incentive allocation to affiliate and (iv) general and administrative expense.

Interest expense increased $27.3 million, which reflects an increase in the average outstanding debt of approximately $586.8 million due to increases in (i) the Senior Notes due 2025 of $407.3 million, (ii) the Senior Notes due 2027 of $400.0 million and (iii) the Senior Notes due 2028 of $250.0 million, partially offset by decreases in (iv) the Senior Notes due 2022 of $431.9 million, which was redeemed in full in May 2021, (v) the Revolving Credit Facility of $26.7 million and (vi) the FTAI Pride Credit Agreement of $12.0 million, which was repaid in full in March 2020.

Acquisition and transaction expense increased $2.7 million, primarily due to higher professional fees.

Management fees and incentive allocation to affiliate decreased $1.4 million, which reflects a decrease in the base management fee as our average total equity is lower in 2021 compared to 2020.

General and administrative expense decreased $1.1 million, primarily due to lower professional fees.

Other expense

Total other expense increased $3.0 million and $2.8 million during the three and six months ended June 30, 2021, respectively, primarily due to a loss on extinguishment of debt of $3.3 million related to the redemption of the Senior Notes due 2022 in May 2021.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $1.9 million primarily due to the changes noted above.

Adjusted EBITDA decreased $3.0 million and $4.9 million during the three and six months ended June 30, 2021, respectively, primarily due to the changes noted above.

Liquidity and Capital Resources

On April 12, 2021, we issued $500 million aggregate principal amount of senior unsecured notes due 2028 (see Note 20 to the consolidated financial statements).

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 June 16, 2017, we entered in a revolving credit facility (the “Revolving Credit Facility”).

During April 2021, we repaid a net $100 million of outstanding borrowings under the Revolving Credit Facility.

Following the repayment, we have additional borrowing capacity of $200 million under the Revolving Credit Facility.

In April 2021, we issued $500 million aggregate principal amount of senior unsecured notes due 2028 (see Note 20 to the consolidated financial statements).

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

In June 2017, we entered in a revolving credit facility (the “Revolving Credit Facility”).

In July 2021, we drew down an additional $50 million under the Revolving Credit Facility.

Following the drawdown, we have additional borrowing capacity of $100 million under the Revolving Credit Facility.

In July 2021, 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 acquisition of Transtar, LLC, which closed on July 28, 2021.

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.

During the third quarter of 2021 we plan to raise debt and/or equity to refinance the Bridge Facility.

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

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Our principal uses of liquidity have been and continue to be (i) acquisitions of transportation infrastructure and equipment, (ii) dividends to our shareholders and holders of eligible participating securities, (iii) expenses associated with our operating activities, and (iv) debt service obligations associated with our investments.

• Cash used for the purpose of making investments was $165.0 million and $122.4 million during the three months ended March 31, 2021 and 2020, respectively.

• Dividends to shareholders and holders of eligible participating securities were $33.0 million and $32.9 million during the three months ended March 31, 2021 and 2020, respectively.

• Cash used for the purpose of making investments was $265.1 million and $341.5 million during the six months ended June 30, 2021 and 2020, respectively.

• Dividends to shareholders and holders of eligible participating securities were $68.0 million and $65.4 million during the six months ended June 30, 2021 and 2020, respectively.

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

1 unchanged sentence

Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our transportation infrastructure and equipment assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales.

• Cash flows (used in) provided from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $(39.8) million and $2.1 million during the three months ended March 31, 2021 and 2020, respectively.

• During the three months ended March 31, 2021, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $150.0 million and (ii) EB-5 Loan Agreement of $21.6 million.

During the three months ended March 31, 2020, additional borrowings were obtained in connection with the (i) Series 2020 Bonds of $264.0 million and (ii) Revolving Credit Facility of $40.0 million.

• Cash flows (used in) provided from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $(46.4) million and $66.5 million during the six months ended June 30, 2021 and 2020, respectively.

• During the six months ended June 30, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $500.0 million, (ii) Revolving Credit Facility of $250.0 million and (iii) EB-5 Loan Agreement of $26.1 million.

We made total principal repayments of $552.7 million relating to the Senior Notes due 2022 and Revolving Credit Facility.

During the six months ended June 30, 2020, additional borrowings were obtained in connection with the (i) Series 2020 Bonds of $264.0 million and (ii) Revolving Credit Facility of $195.0 million.

We made total principal repayments of $276.0 million relating to the Series 2016 Bonds, Series 2012 Bonds, Jefferson Revolver and FTAI Pride Credit Agreement.

• Proceeds from the sale of assets were $4.6 million and $28.6 million during the three months ended March 31, 2021 and 2020, respectively.

• Proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs were $101.2 million during the three months ended March 31, 2021.

• Proceeds from the sale of assets were $57.2 million and $37.7 million during the six months ended June 30, 2021 and 2020, respectively.

• Proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs were $101.2 million during the six months ended June 30, 2021.

We are currently evaluating several potential Infrastructure and Equipment Leasing transactions, which could occur within the next 12 months.

However, as of the date of this filing, none of these transactions or negotiations are definitive or included within our planned liquidity needs.

However, as of the date of this filing, other than the acquisition of Transtar, LLC, none of these transactions or negotiations are definitive or included within our planned liquidity needs.

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

Historical Cash Flow

Comparison of the three months ended March 31, 2021 and 2020

The following table compares the historical cash flow for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

Comparison of the six months ended June 30, 2021 and 2020

The following table compares the historical cash flow for the six months ended June 30, 2021 and 2020:

Six Months Ended June 30,

(in thousands) 2021 2020

Cash Flow Data:

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

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

Net cash used in investing activities (204,209) (298,122)

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

Net cash used in operating activities increased $37.1 million, which reflects an increase in our net loss of $31.8 million primarily due to lower total revenues.

Net cash used in investing activities increased $63.3 million, primarily due to (i) an increase in acquisitions of leasing equipment of $57.2 million and (ii) lower proceeds from the sale of leasing equipment of $24.0 million, partially offset by (iii) a decrease in acquisitions of property, plant and equipment of $21.1 million.

Net cash provided by financing activities increased $251.6 million, primarily due to (i) a decrease in repayments of debt of $276.0 million and (ii) an increase in proceeds from the issuance of preferred shares of $101.4 million, partially offset by (iii) a decrease in proceeds from debt of $132.4 million.

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

Net cash used in operating activities increased $108.6 million, which primarily reflects (i) an increase in our net loss of $52.7 million primarily due to lower revenues and higher interest expense and (ii) changes in working capital of $30.6 million.

Net cash used in investing activities decreased $93.9 million, primarily due to (i) a decrease in acquisitions of property, plant and equipment of $45.9 million, (ii) a decrease in acquisitions of leasing equipment of $36.2 million and (ii) lower proceeds from the sale of leasing equipment of $19.5 million.

Net cash provided by financing activities increased $139.0 million, primarily due to (i) an increase in proceeds from debt of $317.1 million, (ii) an increase in proceeds from the issuance of preferred shares of $101.5 million, partially offset by (iii) an increase in repayments of debt of $276.7 million.

We use Funds Available for Distribution (“FAD”) in evaluating our ability to meet our stated dividend policy.

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net cash provided by operating activities plus principal collections on finance leases, proceeds from sale of assets, and return of capital distributions from unconsolidated entities, less required payments on debt obligations and capital distributions to non-controlling interest, and excludes changes in working capital.

The following table sets forth a reconciliation of Net Cash Provided by Operating Activities to FAD:

Three Months Ended March 31,

The following table sets forth a reconciliation of Net Cash (Used in) Provided by Operating Activities to FAD:

Six Months Ended June 30,

(in thousands) 2021 2020

Net Cash Used in Operating Activities $ (48,932) $ (11,806)

Net Cash (Used in) Provided by Operating Activities $ (63,924) $ 44,652

Principal Collections on Finance Leases 1,269 3,320

6 unchanged sentences

________________________________________________________

(1) Required payments on debt obligations for the three months ended March 31, 2020 exclude repayments of $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement.

(1) Required payments on debt obligations for the six months ended June 30, 2021 exclude repayments of $402,704 for the Senior Notes due 2022 and $150,000 for the Revolving Credit Facility and for the six months ended June 30, 2020 exclude repayments of $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement.

FAD is subject to a number of limitations and assumptions and there can be no assurance that we will generate FAD sufficient to meet our intended dividends.

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Contractual Obligations

The following table summarizes our future obligations, by period due, as of March 31, 2021, under our various contractual obligations and commitments.

We had no off-balance sheet arrangements as of March 31, 2021.

The following table summarizes our future obligations, by period due, as of June 30, 2021, under our various contractual obligations and commitments.

We had no off-balance sheet arrangements as of June 30, 2021.

(in thousands) Remainder of 2021 2022 2023 2024 2025 Thereafter Total

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________________________________________________________

(1) Estimated interest rates as of March 31, 2021.

(1) Estimated interest rates as of June 30, 2021.

(2) Relates to a two-year pipeline capacity agreement at Jefferson Terminal.

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Goodwill — Goodwill includes the excess of the purchase price over the fair value of the net tangible and intangible assets associated with the acquisition of Jefferson Terminal.

The carrying amount of goodwill was approximately $122.7 million as of both March 31, 2021 and December 31, 2020.

The carrying amount of goodwill was approximately $122.7 million as of both June 30, 2021 and December 31, 2020.

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

32 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis