FTAI Aviation Ltd. 10-Q

Item 1. Financial Statements FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) (Unaudited) Notes June 30, 2021 December 31, 2020 Assets Cash and cash equivalents 2 $ 105,244 $ 121,703 Restricted cash 2 38,001 39,715 Accounts receivable, net 175,827 91,691 Leasing equipment, net 4 1,656,702 1,635,259 Operating lease right-of-use assets, net 13 64,541 62,355 Finance leases, net 5 13,124 6,927 Property, plant, and equipment, net 6 1,014,390 964,363 Investments 7 114,493 146,515 Intangible assets, net 8 14,488 18,786 Goodwill 122,735 122,735 Other assets 2 234,401 177,928 Total assets $ 3,553,946 $ 3,387,977 Liabilities Accounts payable and accrued liabilities $ 148,367 $ 113,185 Debt, net 9 2,127,086 1,904,762 Maintenance deposits 119,448 148,293 Security deposits 35,663 37,064 Operating lease liabilities 13 64,120 62,001 Other liabilities 18,249 23,351 Total liabilities $ 2,512,933 $ 2,288,656 Commitments and contingencies 19 Equity Common shares ($ 0.01 par value per share; 2,000,000,000 shares authorized; 85,641,314 and 85,617,146 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively) $ 856 $ 856 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 June 30, 2021 and December 31, 2020, respectively) 133 91 Additional paid in capital 1,163,748 1,130,106 Accumulated deficit ( 88,056 ) ( 28,158 ) Accumulated other comprehensive loss ( 49,115 ) ( 26,237 ) Shareholders' equity 1,027,566 1,076,658 Non-controlling interest in equity of consolidated subsidiaries 13,447 22,663 Total equity 1,041,013 1,099,321 Total liabilities and equity $ 3,553,946 $ 3,387,977 See accompanying notes to consolidated financial statements. 5 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Dollars in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, Notes 2021 2020 2021 2020 Revenues Equipment leasing revenues $ 81,571 $ 79,834 $ 138,178 $ 166,283 Infrastructure revenues 15,344 14,475 35,886 40,866 Total revenues 12 96,915 94,309 174,064 207,149 Expenses Operating expenses 31,183 24,572 56,180 58,016 General and administrative 3,655 4,388 7,907 9,051 Acquisition and transaction expenses 4,399 3,661 6,042 6,855 Management fees and incentive allocation to affiliate 16 4,113 4,756 8,103 9,522 Depreciation and amortization 4, 6, 8 47,371 41,720 91,906 83,917 Asset impairment 89 10,476 2,189 10,476 Interest expense 37,504 21,794 70,494 44,655 Total expenses 128,314 111,367 242,821 222,492 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 ) Loss on extinguishment of debt 9 ( 3,254 ) — ( 3,254 ) ( 4,724 ) Interest income 454 22 739 63 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 ) 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 ) Net income from discontinued operations, net of income taxes — — — 1,331 Net loss ( 36,608 ) ( 15,728 ) ( 71,484 ) ( 18,788 ) Less: Net loss attributable to non-controlling interests in consolidated subsidiaries ( 6,625 ) ( 4,112 ) ( 11,586 ) ( 8,848 ) Less: Dividends on preferred shares 6,551 4,079 11,176 8,618 Net loss attributable to shareholders $ ( 36,534 ) $ ( 15,695 ) $ ( 71,074 ) $ ( 18,558 ) (Loss) earnings per share: 18 Basic Continuing operations $ ( 0.42 ) $ ( 0.18 ) $ ( 0.83 ) $ ( 0.23 ) Discontinued operations $ — $ — $ — $ 0.02 Diluted Continuing operations $ ( 0.42 ) $ ( 0.18 ) $ ( 0.83 ) $ ( 0.23 ) Discontinued operations $ — $ — $ — $ 0.02 Weighted average shares outstanding: Basic 86,030,652 86,009,959 86,029,305 86,009,029 Diluted 86,030,652 86,009,959 86,029,305 86,009,029 See accompanying notes to consolidated financial statements. 6 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited) (Dollars in thousands) 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 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 attributable to shareholders $ ( 62,815 ) $ ( 23,728 ) $ ( 82,776 ) $ ( 13,294 ) ________________________________________________________ (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. 7 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited) (Dollars in thousands) 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 Equity - December 31, 2020 $ 856 $ 91 $ 1,130,106 $ ( 28,158 ) $ ( 26,237 ) $ 22,663 $ 1,099,321 Net loss ( 29,915 ) ( 4,961 ) ( 34,876 ) Other comprehensive income — 9,954 — 9,954 Total comprehensive (loss) income ( 29,915 ) 9,954 ( 4,961 ) ( 24,922 ) Settlement of equity-based compensation ( 183 ) ( 183 ) Issuance of common shares — 150 150 Dividends declared - common shares ( 28,383 ) ( 28,383 ) Issuance of preferred shares 42 101,138 101,180 Dividends declared - preferred shares ( 4,625 ) ( 4,625 ) Equity-based compensation 1,114 1,114 Equity - March 31, 2021 $ 856 $ 133 $ 1,198,386 $ ( 58,073 ) $ ( 16,283 ) $ 18,633 $ 1,143,652 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 Net income (loss) 1,676 ( 4,736 ) ( 3,060 ) Other comprehensive income — 8,758 — 8,758 Total comprehensive income (loss) 1,676 8,758 ( 4,736 ) 5,698 Issuance of common shares 2 154 156 Conversion of participating securities ( 2 ) ( 2 ) Dividends declared - common shares ( 28,391 ) ( 28,391 ) Issuance costs of preferred shares ( 246 ) ( 246 ) Dividends declared - preferred shares ( 4,539 ) ( 4,539 ) Equity-based compensation 291 291 Equity - March 31, 2020 $ 851 $ 81 $ 1,110,028 $ 159,199 $ 9,130 $ 32,535 $ 1,311,824 Net loss ( 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. 8 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Six Months Ended June 30, 2021 2020 Cash flows from operating activities: Net loss $ ( 71,484 ) $ ( 18,788 ) Adjustments to reconcile net loss to net cash used in operating activities: Equity in losses of unconsolidated entities 5,778 2,944 Gain on sale of subsidiaries — ( 1,331 ) (Gain) loss on sale of assets, net ( 4,798 ) 1,051 Security deposits and maintenance claims included in earnings ( 15,413 ) 2,951 Loss on extinguishment of debt 3,254 4,724 Equity-based compensation 2,553 702 Depreciation and amortization 91,906 83,917 Asset impairment 2,189 10,476 Deferred tax provision ( 1,632 ) ( 4,506 ) Change in fair value of non-hedge derivative ( 6,573 ) 181 Amortization of lease intangibles and incentives 14,905 13,488 Amortization of deferred financing costs 4,489 4,010 Bad debt expense, net ( 733 ) 1,761 Other ( 117 ) 759 Change in: Accounts receivable ( 86,661 ) ( 24,140 ) Other assets ( 44,639 ) 6,210 Accounts payable and accrued liabilities 47,320 ( 18,894 ) Management fees payable to affiliate ( 631 ) ( 20,987 ) Other liabilities ( 3,637 ) 124 Net cash (used in) provided by operating activities ( 63,924 ) 44,652 Cash flows from investing activities: Investment in unconsolidated entities ( 1,105 ) ( 2,514 ) Principal collections on finance leases 1,269 3,320 Acquisition of leasing equipment ( 170,132 ) ( 206,299 ) Acquisition of property, plant and equipment ( 84,134 ) ( 130,073 ) Acquisition of lease intangibles ( 517 ) 1,997 Purchase deposits for acquisitions ( 9,180 ) ( 4,590 ) Proceeds from sale of leasing equipment 57,155 37,687 Proceeds from deposit on sale of aircraft and engine 1,425 — Return of deposit on sale of engine 1,010 2,350 Net cash used in investing activities $ ( 204,209 ) $ ( 298,122 ) See accompanying notes to consolidated financial statements. 9 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Six Months Ended June 30, 2021 2020 Cash flows from financing activities: Proceeds from debt $ 776,100 $ 458,981 Repayment of debt ( 552,704 ) ( 275,991 ) Payment of deferred financing costs ( 10,653 ) ( 12,629 ) Receipt of security deposits 1,020 853 Return of security deposits ( 1,034 ) ( 3,815 ) Receipt of maintenance deposits 16,255 18,499 Release of maintenance deposits ( 12,071 ) ( 9,185 ) 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 ) — Cash dividends - common shares ( 56,795 ) ( 56,782 ) Cash dividends - preferred shares ( 11,176 ) ( 8,618 ) 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 Cash and cash equivalents and restricted cash, end of period $ 143,245 $ 100,048 Supplemental disclosure of non-cash investing and financing activities: Acquisition of leasing equipment $ 23,299 $ 25,326 Acquisition of property, plant and equipment ( 891 ) ( 13,631 ) Settled and assumed security deposits ( 1,042 ) ( 2,545 ) Billed, assumed and settled maintenance deposits ( 22,123 ) ( 20,113 ) Non-cash change in equity method investment ( 22,878 ) ( 3,354 ) Issuance of common shares 455 304 See accompanying notes to consolidated financial statements. 10 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 1. ORGANIZATION Fortress Transportation and Infrastructure Investors LLC (“we”, “us”, “our” or the “Company”) is a Delaware limited liability company which, through its subsidiary, Fortress Worldwide Transportation and Infrastructure General Partnership (the “Partnership”), owns and leases aviation equipment and also owns and operates (i) a multi-modal crude oil and refined products terminal in Beaumont, Texas (“Jefferson Terminal”), (ii) a deep-water port located along the Delaware River with an underground storage cavern and multiple industrial development opportunities (“Repauno”) and (iii) an equity method investment in a multi-modal terminal located along the Ohio River with multiple industrial development opportunities, including a power plant under construction (“Long Ridge”). Additionally, we own and lease offshore energy equipment and shipping containers. We have three reportable segments, (i) Aviation Leasing, (ii) Jefferson Terminal and (iii) Ports and Terminals, which operate in two primary businesses, Equipment Leasing and Infrastructure (see Note 17). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting — The accompanying consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of us and our subsidiaries. Principles of Consolidation — We consolidate all entities in which we have a controlling financial interest and control over significant operating decisions, as well as variable interest entities (“VIEs”) in which we are the primary beneficiary. All significant intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The ownership interest of other investors in consolidated subsidiaries is recorded as non-controlling interest. We use the equity method of accounting for investments in entities in which we exercise significant influence but which do not meet the requirements for consolidation. Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities as well as the proportionate interest in adjustments to other comprehensive income (loss). Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Risks and Uncertainties — In the normal course of business, we encounter several significant types of economic risk including credit, market, and capital market risks. Credit risk is the risk of the inability or unwillingness of a lessee, customer, or derivative counterparty to make contractually required payments or to fulfill its other contractual obligations. Market risk reflects the risk of a downturn or volatility in the underlying industry segments in which we operate, which could adversely impact the pricing of the services offered by us or a lessee’s or customer’s ability to make payments, increase the risk of unscheduled lease terminations and depress lease rates and the value of our leasing equipment or operating assets. Capital market risk is the risk that we are unable to obtain capital at reasonable rates to fund the growth of our business or to refinance existing debt facilities. We, through our subsidiaries, also conduct operations outside of the United States; such international operations are subject to the same risks as those associated with our United States operations as well as additional risks, including unexpected changes in regulatory requirements, heightened risk of political and economic instability, potentially adverse tax consequences and the burden of complying with foreign laws. We do not have significant exposure to foreign currency risk as all of our leasing arrangements and the majority of terminal services revenue are denominated in U.S. dollars. Variable Interest Entities — The assessment of whether an entity is a VIE and the determination of whether to consolidate a VIE requires judgment. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Delaware River Partners LLC During 2016, through Delaware River Partners LLC (“DRP”), a consolidated subsidiary, we purchased the assets of Repauno, which consisted primarily of land, a storage cavern, and riparian rights for the acquired land, site improvements and rights. Upon acquisition there were no operational processes that could be applied to these assets that would result in outputs without significant green field development. We currently hold an approximately 98 % economic interest, and a 100 % voting interest in DRP. DRP is solely reliant on us to finance its activities and therefore is a VIE. We concluded that we were the primary beneficiary; and accordingly, DRP has been presented on a consolidated basis in the accompanying financial statements. Cash and Cash Equivalents — We consider all highly liquid short-term investments with a maturity of 90 days or less when purchased to be cash equivalents. 11 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Restricted Cash — Restricted cash consists of prepaid interest and principal pursuant to the requirements of certain of our debt agreements (see Note 9) and other qualifying construction projects at Jefferson Terminal. Inventory — We hold aircraft engine modules, spare parts and used material inventory for trading and to support operations within our Aviation Leasing segment. Aviation inventory is carried at the lower of cost or net realizable value on our balance sheet. 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 $ 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 $ 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 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. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received. Generally, under our aircraft lease and engine agreements, the lessee is required to make periodic maintenance payments calculated based on the lessee’s utilization of the leased asset or at the end of the lease. 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 cost of maintenance events 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. Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance Deposits in our Consolidated Balance Sheets. All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenues. Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions. Significant changes to these estimates could have a material effect on the amount of revenue recognized in the period. For purchase and lease back transactions, we account for the transaction as a single arrangement. 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. In April 2020, the FASB Staff issued a question-and-answer document (the “Q&A”) regarding accounting for lease concessions related to the effects of the COVID-19 pandemic. 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 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. Net investment in finance leases represents the minimum lease payments due from lessee, net of unearned income. The lease payments are segregated into principal and interest components similar to a loan. Unearned income is recognized on an effective interest method over the lease term and is recorded as finance lease income. The principal component of the lease payment is reflected as a reduction to the net investment in finance leases. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received. 12 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Infrastructure Revenues Terminal Services Revenues —Terminal services are provided to customers for the receipt and redelivery of various commodities. These revenues are recognized over time, i.e., as the services are rendered and the customer simultaneously receives and consumes the benefit over time. Lease Income —Lease income consists of rental income from tenants for storage space. Lease income is recognized on a straight-line basis over the term of the relevant lease agreement. Crude Marketing Revenues —Crude marketing revenues consist of marketing revenue related to Canadian crude oil. The revenues are recognized over time, i.e., as the services are rendered and the customer simultaneously receives and consumes the benefit over time. Other Revenue —Other revenue primarily consists of revenue related to the handling, storage and sale of raw materials. Other revenue consists of two performance obligations: handling and storage of raw materials. The revenues are recognized over time, i.e., as the services are rendered and the customer simultaneously receives and consumes the benefit over time. Additionally, other revenue consists of revenue related to derivative trading activities. See Commodity Derivatives below for additional information. Payment terms for Infrastructure Revenues are generally short term in nature. Leasing Arrangements — At contract inception, we evaluate whether an arrangement is or contains a lease for which we are the lessee (that is, arrangements which provide us with the right to control a physical asset for a period of time). Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized in Operating lease right-of-use assets, net and Operating lease liabilities in our Consolidated Balance Sheets, respectively. Finance lease ROU assets are recognized in Property, plant and equipment, net and lease liabilities are recognized in Other liabilities in our Consolidated Balance Sheets. All lease liabilities are measured at the present value of the unpaid lease payments, discounted using our incremental borrowing rate based on the information available at commencement date of the lease. ROU assets , for both operating and finance leases , are initially measured based on the lease liability, adjusted for prepaid rent and lease incentives. ROU assets are subsequently measured at the carrying amount of the lease liability adjusted for prepaid or accrued lease payments and lease incentives. The finance lease ROU assets are subsequently amortized using the straight-line method. Operating lease expenses are recognized on a straight-line basis over the lease term. With respect to finance leases, amortization of the ROU asset is presented separately from interest expense related to the finance lease liability. Variable lease payments, which are primarily based on usage, are recognized when the associated activity occurs. We have elected to combine lease and non-lease components for all lease contracts where we are the lessee. Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets, and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred . Concentration of Credit Risk — We are subject to concentrations of credit risk with respect to amounts due from customers on our finance leases and operating leases. We attempt to limit our credit risk by performing ongoing credit evaluations and, when deemed necessary, enter into collateral arrangements. 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. We maintain cash and restricted cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions. We monitor the financial condition of these institutions and have not experienced any losses associated with these accounts. 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 $ 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. 13 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 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 (loss) related to our equity method investees. Derivative Financial Instruments Electricity Derivatives— Through our equity method investment in Long Ridge, we enter into derivative contracts as part of a risk management program to mitigate price risk associated with certain electricity price exposures. We primarily use swap derivative contracts, which are agreements to buy or sell a quantity of electricity at a predetermined future date and at a predetermined price. Cash Flow Hedges Certain of these derivative instruments are designated and qualify as cash flow hedges. Our share of the derivative's gain or loss is reported as Other comprehensive income (loss) related to equity method investees in our Consolidated Statements of Comprehensive (Loss) Income and recorded in Accumulated other comprehensive (loss) income in our Consolidated Balance Sheets. Derivatives Not Designated As Hedging Instruments Certain of these derivative instruments are not designated as hedging instruments for accounting purposes. The change in fair value of these contracts is recognized in Equity in earnings (losses) in unconsolidated entities in the Consolidated Statements of Operations. The cash flow impact of derivative contracts that are not designated as hedging instruments is recognized in Equity in earnings (losses) in unconsolidated entities in our Consolidated Statements of Cash Flows. Commodity Derivatives— We also enter into short-term and long-term crude forward contracts. Gains and losses related to our crude sales and purchase derivatives are recorded on a gross basis and are included in Crude marketing revenues and Operating expenses, respectively, in our Consolidated Statements of Operations. The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows. Additionally, depending on market conditions, we enter into short-term forward purchase and sales contracts for butane. Gains and losses related to our butane derivatives are recorded on a net basis and are included in Other revenue in our Consolidated Statements of Operations, as these contracts are considered part of central operating activities. The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows. See Note 11 for additional details related to our commodity derivatives. Some of our derivatives are used for speculative purposes. 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 $ 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 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): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU 2021-01, Reference Rate Reform: Scope , respectively. Together, the ASU’s temporarily simplify the accounting for contract modifications, including hedging relationships, due to the transition from LIBOR and other interbank offered rates to alternative reference interest rates. For example, entities can elect not to remeasure the contracts at the modification date or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Adoption did not have a material impact on our consolidated financial statements. 14 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) . This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 and early adoption is permitted. We adopted this guidance in the first quarter of 2021, which did not have a material impact on our consolidated financial statements. 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. 3. DISCONTINUED OPERATIONS In December 2019, we completed the sale of substantially all of our railroad business (“CMQR”), which was previously reported as our Railroad segment. Under ASC 205-20, this disposition met the criteria to be reported as discontinued operations. Accordingly, the results of operations of CMQR have been reported as discontinued operations for all periods presented. 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. 4. LEASING EQUIPMENT, NET Leasing equipment, net is summarized as follows: June 30, 2021 December 31, 2020 Leasing equipment $ 2,082,733 $ 2,042,404 Less: accumulated depreciation ( 426,031 ) ( 407,145 ) Leasing equipment, net $ 1,656,702 $ 1,635,259 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. To determine fair value, we used both a market approach, using quoted market prices for the same or similar assets, and an income approach, using discounted cash flows and an estimated discount rate. As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 2.2 million, net of redelivery compensation. The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the six months ended June 30, 2021: Acquisitions: Aircraft 9 Engines 32 Dispositions: Aircraft 3 Engines 20 15 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Depreciation expense for leasing equipment $ 35,899 $ 34,293 $ 70,594 $ 69,017 5. FINANCE LEASES, NET Finance leases, net are summarized as follows: June 30, 2021 December 31, 2020 Finance leases $ 15,708 $ 9,389 Unearned revenue ( 2,584 ) ( 2,462 ) Finance leases, net $ 13,124 $ 6,927 During the six months ended June 30, 2021, we entered into 52 -month sales-type lease arrangements for four airframes. 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net is summarized as follows: June 30, 2021 December 31, 2020 Land, site improvements and rights $ 59,334 $ 52,047 Construction in progress 108,698 425,261 Buildings and improvements 6,268 4,491 Terminal machinery and equipment 927,371 557,788 Track and track related assets 8,400 2,349 Railroad equipment 5,598 5,560 Computer hardware and software 5,159 5,101 Furniture and fixtures 3,092 2,449 Other 6,533 5,870 1,130,453 1,060,916 Less: accumulated depreciation ( 116,063 ) ( 96,553 ) Property, plant and equipment, net $ 1,014,390 $ 964,363 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Depreciation expense $ 10,583 $ 6,538 $ 19,535 $ 13,123 16 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 7. INVESTMENTS The following table presents the ownership interests and carrying values of our investments: Carrying Value Investment Ownership Percentage June 30, 2021 December 31, 2020 Advanced Engine Repair JV Equity method 25 % $ 22,039 $ 22,721 Intermodal Finance I, Ltd. Equity method 51 % 32 — Long Ridge Terminal LLC Equity method 50 % 91,167 122,539 FYX Trust Holdco LLC Equity 14 % 1,255 1,255 Investments $ 114,493 $ 146,515 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 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 ) Total $ ( 7,152 ) $ ( 3,209 ) $ ( 5,778 ) $ ( 2,944 ) Equity Method Investments Long Ridge Terminal LLC In December 2019, Ohio River Shareholder LLC (“ORP”) contributed its equity interests in Long Ridge into Long Ridge Terminal LLC and sold a 49.9 % interest (the “Long Ridge Transaction”) for $ 150 million in cash, plus an earn out. We no longer have a controlling interest in Long Ridge but still maintain significant influence through our retained interest and, therefore, now account for this investment in accordance with the equity method. 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 In December 2016, we invested $ 15 million for a 25 % interest in an advanced engine repair joint venture. We focus on developing new costs savings programs for engine repairs. We exercise significant influence over this investment and account for this investment as an equity method investment. In August 2019, we expanded the scope of our joint venture and invested an additional $ 13.5 million and maintained a 25 % interest. Equity Investments FYX Trust Holdco LLC In July 2020, we invested $ 1.3 million for a 14 % interest in an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries. FYX Trust Holdco LLC (“FYX”) has developed a mobile and web-based application that connects fleet managers, owner-operators, and drivers with repair vendors to efficiently and reliably quote, dispatch, monitor, and bill roadside repair services. 17 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 8. INTANGIBLE ASSETS AND LIABILITIES, NET Intangible assets and liabilities, net are summarized as follows: June 30, 2021 Aviation Leasing Jefferson Terminal Total Intangible assets Acquired favorable lease intangibles $ 35,865 $ — $ 35,865 Less: Accumulated amortization ( 32,629 ) — ( 32,629 ) Acquired favorable lease intangibles, net 3,236 — 3,236 Customer relationships — 35,513 35,513 Less: Accumulated amortization — ( 24,261 ) ( 24,261 ) Acquired customer relationships, net — 11,252 11,252 Total intangible assets, net $ 3,236 $ 11,252 $ 14,488 Intangible liabilities Acquired unfavorable lease intangibles $ 7,148 $ — $ 7,148 Less: Accumulated amortization ( 5,688 ) — ( 5,688 ) Acquired unfavorable lease intangibles, net $ 1,460 $ — $ 1,460 December 31, 2020 Aviation Leasing Jefferson Terminal Total Intangible assets Acquired favorable lease intangibles $ 35,349 $ — $ 35,349 Less: Accumulated amortization ( 29,591 ) — ( 29,591 ) Acquired favorable lease intangibles, net 5,758 — 5,758 Customer relationships — 35,513 35,513 Less: Accumulated amortization — ( 22,485 ) ( 22,485 ) Acquired customer relationships, net — 13,028 13,028 Total intangible assets, net $ 5,758 $ 13,028 $ 18,786 Intangible liabilities Acquired unfavorable lease intangibles $ 7,151 $ — $ 7,151 Less: Accumulated amortization ( 4,604 ) — ( 4,604 ) Acquired unfavorable lease intangibles, net $ 2,547 $ — $ 2,547 Intangible liabilities relate to unfavorable lease intangibles and are included as a component of Other liabilities in the Consolidated Balance Sheets. 18 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Lease intangibles Equipment leasing revenues $ 1,198 $ 931 $ 1,950 $ 2,063 Customer relationships Depreciation and amortization 889 889 1,777 1,777 Total $ 2,087 $ 1,820 $ 3,727 $ 3,840 As of June 30, 2021, estimated net annual amortization of intangibles is as follows: Remainder of 2021 $ 3,082 2022 4,362 2023 3,349 2024 2,235 2025 — Thereafter — Total $ 13,028 19 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 9. DEBT, NET Our debt, net is summarized as follows: June 30, 2021 December 31, 2020 Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings Loans payable Revolving Credit Facility (1) $ 100,000 (i) Base Rate + 2.00 %; or (ii) Adjusted Eurodollar Rate + 3.00 % 1/31/2022 $ — DRP Revolver (2) 25,000 (i) Base Rate + 1.50 %; or (ii) Base Rate + 2.50 % (Eurodollar) 11/5/2021 25,000 EB-5 Loan Agreement 26,100 5.75 % 1/25/2026 — Total loans payable 151,100 25,000 Bonds payable Series 2020 Bonds 263,980 (i) Tax Exempt Series 2020A Bonds: 3.625 % (ii) Tax Exempt Series 2020A Bonds: 4.00 % (iii) Taxable Series 2020B Bonds: 6.00 % (i) 1/1/2035 (ii) 1/1/2050 (iii) 1/1/2025 263,980 Senior Notes due 2022 (3) — 6.75 % 3/15/2022 399,331 Senior Notes due 2025 (4) 852,440 6.50 % 10/1/2025 852,673 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 Debt 2,167,520 1,940,984 Less: Debt issuance costs ( 40,434 ) ( 36,222 ) Total debt, net $ 2,127,086 $ 1,904,762 Total debt due within one year $ 125,000 $ 25,000 ________________________________________________________ (1) Requires a quarterly commitment fee at a rate of 0.50 % on the average daily unused portion, as well as customary letter of credit fees and agency fees. (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 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 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. 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. 20 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 10. FAIR VALUE MEASUREMENTS Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows: • Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs. • Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the asset or liability. The valuation techniques that may be used to measure fair value are as follows: • Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. • Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts. • Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). The following tables set forth our financial assets measured at fair value on a recurring basis as of June 30, 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 June 30, 2021 June 30, 2021 Total Level 1 Level 2 Level 3 Valuation Technique Assets Cash and cash equivalents $ 105,244 $ 105,244 $ — $ — Market Restricted cash 38,001 38,001 — — Market Derivative assets 6,573 — 6,573 — Income Total assets $ 149,818 $ 143,245 $ 6,573 $ — Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of December 31, 2020 December 31, 2020 Total Level 1 Level 2 Level 3 Valuation Technique Assets Cash and cash equivalents $ 121,703 $ 121,703 $ — $ — Market Restricted cash 39,715 39,715 — — Market Total $ 161,418 $ 161,418 $ — $ — Our cash and cash equivalents and restricted cash consist largely of demand deposit accounts with maturities of 90 days or less when purchased that are considered to be highly liquid. These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy. Except as discussed below, our financial instruments other than cash and cash equivalents and restricted cash consist principally of accounts receivable, accounts payable and accrued liabilities, loans payable, bonds payable, security deposits, maintenance deposits and management fees payable, whose fair values approximate their carrying values based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles. 21 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) The fair value of our bonds and notes payable reported as debt, net in the Consolidated Balance Sheets are presented in the table below: June 30, 2021 December 31, 2020 Series A 2020 Bonds (1) $ 191,327 $ 186,306 Series B 2020 Bonds (1) 82,018 79,723 Senior Notes due 2022 — 403,536 Senior Notes due 2025 883,652 888,701 Senior Notes due 2027 463,552 460,340 Senior Notes due 2028 521,405 — ________________________________________________________ (1) Fair value is based upon market prices for similar municipal securities. The fair value of all other items reported as debt, net in the Consolidated Balance Sheet approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy. We measure the fair value of certain assets and liabilities on a non-recurring basis when GAAP requires the application of fair value, including events or changes in circumstances that indicate that the carrying amounts of assets may not be recoverable. Assets subject to these measurements include goodwill, intangible assets, property, plant and equipment and leasing equipment. We record such assets at fair value at acquisition or when it is determined the carrying value may not be recoverable. Fair value measurements for assets subject to impairment tests are based on an income approach which uses Level 3 inputs, which include our assumptions as to future cash flows from operation of the underlying businesses and the leasing and eventual sale of assets. 11. DERIVATIVE FINANCIAL INSTRUMENTS Commodity Derivatives Crude Oil Depending on market conditions, we source crude oil from producers in Canada, arranging logistics to Jefferson Terminal and marketing crude oil to third parties. We exited this strategy in the fourth quarter of 2019. These crude oil forward purchase and sales contracts are not designated in hedging relationships. Butane Depending on market conditions, Repauno enters into forward purchase and sales contracts for butane. These derivatives are short-term in nature and are used for trading purposes. The following table presents information related to our butane derivative contracts: June 30, 2021 December 31, 2020 Notional Amount (BBL in thousands) 2,418 N/A Fair Value of Assets (1) $ 6,573 $ — Term 2 to 9 months N/A ________________________________________________________ (1) Included in Other assets in the Consolidated Balance Sheets. The following table presents a summary of the changes in fair value for all Level 3 derivatives: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Beginning Balance $ — $ — $ — $ 181 Net losses recognized in earnings — — — ( 181 ) Ending Balance $ — $ — $ — $ — There were no transfers into or out of Level 3 during the periods presented. 22 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 12. REVENUES We disaggregate our revenue from contracts with customers by products and services provided for each of our segments, as we believe it best depicts the nature, amount, timing and uncertainty of our revenue. Revenues attributed to our Equipment Leasing business unit are within the scope of ASC 842, while revenues attributed to our Infrastructure business unit are within the scope of ASC 606, unless otherwise noted. Under the provisions of ASC 842, we have elected to exclude sales and other similar taxes from lease payments in arrangements where we are a lessor. Three Months Ended June 30, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Equipment leasing revenues Lease income $ 40,208 $ — $ — $ 2,694 $ 42,902 Maintenance revenue 32,003 — — — 32,003 Finance lease income 443 — — — 443 Other revenue 5,789 — — 434 6,223 Total equipment leasing revenues 78,443 — — 3,128 81,571 Infrastructure revenues Lease income — 432 — — 432 Terminal services revenues — 11,095 25 — 11,120 Crude marketing revenues — — — — — Other revenue — — 2,319 1,473 3,792 Total infrastructure revenues — 11,527 2,344 1,473 15,344 Total revenues $ 78,443 $ 11,527 $ 2,344 $ 4,601 $ 96,915 Three Months Ended June 30, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Equipment leasing revenues Lease income $ 42,505 $ — $ — $ 2,129 $ 44,634 Maintenance revenue 27,105 — — — 27,105 Finance lease income 413 — — — 413 Other revenue 5,236 — — 2,446 7,682 Total equipment leasing revenues 75,259 — — 4,575 79,834 Infrastructure revenues Lease income — 287 — — 287 Terminal services revenues — 12,794 — — 12,794 Crude marketing revenues — — — — — Other revenue — — — 1,394 1,394 Total infrastructure revenues — 13,081 — 1,394 14,475 Total revenues $ 75,259 $ 13,081 $ — $ 5,969 $ 94,309 23 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Six Months Ended June 30, 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 Remainder of 2021 $ 84,604 $ 800 2022 117,598 1,215 2023 79,543 478 2024 52,762 86 2025 37,685 5 Thereafter 23,405 — Total $ 395,597 $ 2,584 24 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 13. LEASES We have commitments as lessees under lease arrangements primarily for real estate, equipment and vehicles. Our leases have remaining lease terms ranging from approximately five months to 41 years. The following table presents lease related costs: 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 Short-term lease expense 329 160 580 450 Variable lease expense 426 264 637 1,104 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 six months ended June 30, 2021: Right-of-use assets, net $ 64,541 Lease liabilities 64,120 Weighted average remaining lease term 38.3 years Weighted average incremental borrowing rate 6.1 % 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 June 30, 2021: Remainder of 2021 $ 2,645 2022 5,143 2023 5,254 2024 5,004 2025 4,852 Thereafter 145,874 Total undiscounted lease payments 168,772 Less: Imputed interest 104,652 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. 14. 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. 25 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) The Consolidated Statements of Operations includes the following expense related to our stock-based compensation arrangements: Three Months Ended June 30, Six Months Ended June 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years) 2021 2020 2021 2020 Restricted Shares $ 1,270 $ 215 $ 2,111 $ 430 $ 5,466 1.5 Common Units 169 196 442 272 1,411 1.3 Total $ 1,439 $ 411 $ 2,553 $ 702 $ 6,877 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. Options 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. The assumptions used in valuing the options were: a 1.70 % risk-free rate, a 3.16 % dividend yield, a 45.60 % volatility and a ten-year term. Common Units 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. The fair value of these awards was based on the fair value of the operating subsidiary on the grant date, which was estimated using a discounted cash flow analysis that requires the application of discount factors and terminal multiples to projected cash flows. Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date. Restricted Shares 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. The fair value of these awards was based on the fair value of the operating subsidiary on the grant date, which was estimated using a discounted cash flow analysis that requires the application of discount factors and terminal multiples to projected cash flows. Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date. 15. INCOME TAXES The current and deferred components of the income tax benefit included in the Consolidated Statements of Operations are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Current: Federal $ 37 $ 31 $ 56 $ 68 State and local 90 83 161 251 Foreign ( 64 ) 252 ( 56 ) 322 Total current provision 63 366 161 641 Deferred: Federal ( 1,622 ) ( 597 ) ( 1,467 ) ( 878 ) State and local — — — — Foreign ( 81 ) ( 3,519 ) ( 165 ) ( 3,611 ) Total deferred benefit ( 1,703 ) ( 4,116 ) ( 1,632 ) ( 4,489 ) Benefit from income taxes $ ( 1,640 ) $ ( 3,750 ) $ ( 1,471 ) $ ( 3,848 ) We are taxed as a flow-through entity for U.S. income tax purposes and our taxable income or loss generated is the responsibility of our owners. Taxable income or loss generated by our corporate subsidiaries is subject to U.S. federal, state and foreign corporate income tax in locations where they conduct business. 26 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. federal tax rate of 21 % primarily due to a significant portion of our income not being subject to U.S. corporate tax rates, or being deemed to be foreign sourced and thus either not taxable or taxable at effectively lower tax rates. As of and for the six months ended June 30, 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. federal, state, local and foreign income tax examinations by tax authorities. 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 June 30, 2021. 16. MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS The Manager is paid annual fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto. In addition, the Manager may be reimbursed for various expenses incurred by the Manager on our behalf, including the costs of legal, accounting and other administrative activities. Additionally, we have entered into certain incentive allocation arrangements with Master GP, which owns approximately 0.05 % of the Partnership and is the general partner of the Partnership. The Manager is entitled to a management fee, incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below) and reimbursement of certain expenses. The management fee is determined by taking the average value of total equity (excluding non-controlling interests) determined on a consolidated basis in accordance with GAAP at the end of the two most recently completed months multiplied by an annual rate of 1.50 % and is payable monthly in arrears in cash. The income incentive allocation is calculated and distributable quarterly in arrears based on the pre-incentive allocation net income for the immediately preceding calendar quarter (the “Income Incentive Allocation”). For this purpose, pre-incentive allocation net income means, with respect to a calendar quarter, net income attributable to shareholders during such quarter calculated in accordance with GAAP excluding our pro rata share of (1) realized or unrealized gains and losses, and (2) certain non-cash or one-time items, and (3) any other adjustments as may be approved by our independent directors. 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. 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); (2) 100 % of pre-incentive allocation net income with respect to that portion of such pre-incentive allocation net income, if any, that is equal to or exceeds 2 % but does not exceed 2.2223 % for such quarter; and (3) 10 % of the amount of pre-incentive allocation net income, if any, that exceeds 2.2223 % for such quarter. These calculations will be prorated for any period of less than three months. Capital Gains Incentive Allocation is calculated and distributable in arrears as of the end of each calendar year and is equal to 10% of our pro rata share of cumulative realized gains from the date of the IPO through the end of the applicable calendar year, net of our pro rata share of cumulative realized or unrealized losses, the cumulative non-cash portion of equity-based compensation expenses and all realized gains upon which prior performance-based Capital Gains Incentive Allocation payments were made to the Master GP. The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Management fees $ 4,113 $ 4,756 $ 8,103 $ 9,522 Income incentive allocation — — — — Capital gains incentive allocation — — — — Total $ 4,113 $ 4,756 $ 8,103 $ 9,522 27 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. The expenses required to be paid by us include, but are not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of our assets, legal and auditing fees and expenses, the compensation and expenses of our independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of ours (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of ours, costs and expenses incurred in contracting with third parties (including affiliates of the Manager), the costs of printing and mailing proxies and reports to our shareholders, costs incurred by the Manager or its affiliates for travel on our behalf, costs associated with any computer software or hardware that is used for us, costs to obtain liability insurance to indemnify our directors and officers and the compensation and expenses of our transfer agent. We pay or reimburse the Manager and its affiliates for performing certain legal, accounting, due diligence tasks and other services that outside professionals or outside consultants otherwise would perform, provided that such costs and reimbursements are no greater than those which would be paid to outside professionals or consultants. The Manager is responsible for all of its other costs incident to the performance of its duties under the Management Agreement, including compensation of the Manager’s employees, rent for facilities and other “overhead” expenses; we do not reimburse the Manager for these expenses. The following table summarizes our reimbursements to the Manager: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Classification in the Consolidated Statements of Operations: General and administrative $ 1,978 $ 2,128 $ 4,211 $ 4,390 Acquisition and transaction expenses 554 523 971 1,047 Total $ 2,532 $ 2,651 $ 5,182 $ 5,437 If we terminate the Management Agreement, we will generally be required to pay the Manager a termination fee. The termination fee is equal to the amount of the management fee during the 12 months immediately preceding the date of the termination. In addition, an Incentive Allocation Fair Value Amount will be distributable to the Master GP if the Master GP is removed due to the termination of the Management Agreement in certain specified circumstances. 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). 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). Any ultimate purchaser of common shares for which such options are granted may be an affiliate of Fortress. The following table summarizes amounts due to the Manager, which are included within accounts payable and accrued liabilities in the Consolidated Balance Sheets: June 30, 2021 December 31, 2020 Accrued management fees $ 1,349 $ 1,461 Other payables 799 1,317 As of June 30, 2021 and December 31, 2020, there were no receivables from the Manager. Other Affiliate Transactions 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. 28 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 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 On June 21, 2018, we, through a wholly owned subsidiary, completed a private offering with several third parties (the “Holders”) to tender their approximately 20 % stake in Jefferson Terminal. We increased our majority interest in Jefferson Terminal in exchange for Class B Units of another wholly owned subsidiary, which provide the right to convert such Class B Units to a fixed amount of our shares, equivalent to approximately 1.9 million shares, at a Holder’s request. We have the option to satisfy any exchange request by delivering either common shares or cash. The Holders are entitled to receive distributions equivalent to the distributions paid to our shareholders. This transaction resulted in a purchase of non-controlling interest shares. See Note 18 for details related to conversions during the period. In July 2020, we purchased a 14 % interest in FYX from an affiliate of our Manager, which retained a non-controlling interest in FYX subsequent to the transaction. Additionally, other investors in FYX are also affiliates of our Manager. See Note 7 for additional information related to FYX. 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. 17. SEGMENT INFORMATION Our reportable segments represent strategic business units comprised of investments in different types of transportation and infrastructure assets. We have three reportable segments which operate in the Equipment Leasing and Infrastructure businesses across several market sectors. Our reportable segments are (i) Aviation Leasing, (ii) Jefferson Terminal and (iii) Ports and Terminals. The Aviation Leasing segment consists of aircraft and aircraft engines held for lease and are typically held long-term. The Jefferson Terminal segment consists of a multi-modal crude oil and refined products terminal and other related assets. The Ports and Terminals segment consists of Repauno, which is a 1,630 -acre deep-water port located along the Delaware River with an underground storage cavern and multiple industrial development opportunities, and an equity method investment in Long Ridge, which is a 1,660 -acre multi-modal port located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant under construction. Corporate and Other primarily consists of debt, unallocated company level general and administrative expenses, and management fees. 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. The accounting policies of the segments are the same as those described in the summary of significant accounting policies; however, financial information presented by segment includes the impact of intercompany eliminations. We evaluate investment performance for each reportable segment primarily based on net income attributable to shareholders and Adjusted EBITDA. 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. We believe that net income (loss) attributable to shareholders, as defined by GAAP, is the most appropriate earnings measurement with which to reconcile Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to shareholders as determined in accordance with GAAP. 29 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) The following tables set forth certain information for each reportable segment: I. For the Three Months Ended June 30, 2021 Three Months Ended June 30, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Revenues Equipment leasing revenues $ 78,443 $ — $ — $ 3,128 $ 81,571 Infrastructure revenues — 11,527 2,344 1,473 15,344 Total revenues 78,443 11,527 2,344 4,601 96,915 Expenses Operating expenses 9,145 11,777 3,828 6,433 31,183 General and administrative — — — 3,655 3,655 Acquisition and transaction expenses 836 — — 3,563 4,399 Management fees and incentive allocation to affiliate — — — 4,113 4,113 Depreciation and amortization 33,732 9,315 2,216 2,108 47,371 Asset impairment 89 — — — 89 Interest expense — 3,213 295 33,996 37,504 Total expenses 43,802 24,305 6,339 53,868 128,314 Other (expense) income Equity in (losses) earnings of unconsolidated entities ( 341 ) — ( 7,015 ) 204 ( 7,152 ) 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 (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 ) (Benefit from) provision for income taxes ( 4 ) 59 ( 1,621 ) ( 74 ) ( 1,640 ) Net income (loss) from continuing operations 38,632 ( 13,723 ) ( 9,282 ) ( 52,235 ) ( 36,608 ) Less: Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 6,538 ) ( 87 ) — ( 6,625 ) Less: Dividends on preferred shares — — — 6,551 6,551 Net income (loss) from continuing operations attributable to shareholders $ 38,632 $ ( 7,185 ) $ ( 9,195 ) $ ( 58,786 ) $ ( 36,534 ) 30 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, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Adjusted EBITDA $ 80,137 $ 3,555 $ 376 $ ( 16,114 ) $ 67,954 Add: Non-controlling share of Adjusted EBITDA 3,257 Add: Equity in losses of unconsolidated entities ( 7,152 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities 11 Less: Interest expense ( 37,504 ) Less: Depreciation and amortization expense ( 54,168 ) Less: Incentive allocations — Less: Asset impairment charges ( 89 ) Less: Changes in fair value of non-hedge derivative instruments ( 1,391 ) Less: Losses on the modification or extinguishment of debt and capital lease obligations ( 3,254 ) Less: Acquisition and transaction expenses ( 4,399 ) Less: Equity-based compensation expense ( 1,439 ) Less: Provision for income taxes 1,640 Net loss attributable to shareholders from continuing operations $ ( 36,534 ) Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows: Three Months Ended June 30, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Revenues Africa $ 235 $ — $ — $ — $ 235 Asia 32,479 — — 3,128 35,607 Europe 30,662 — — — 30,662 North America 13,358 11,527 2,344 1,473 28,702 South America 1,709 — — — 1,709 Total $ 78,443 $ 11,527 $ 2,344 $ 4,601 $ 96,915 31 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) II. For the Six Months Ended June 30, 2021 Six Months Ended June 30, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Revenues Equipment leasing revenues $ 134,544 $ — $ — $ 3,634 $ 138,178 Infrastructure revenues — 22,246 10,440 3,200 35,886 Total revenues 134,544 22,246 10,440 6,834 174,064 Expenses Operating expenses 13,395 23,498 6,930 12,357 56,180 General and administrative — — — 7,907 7,907 Acquisition and transaction expenses 2,032 — — 4,010 6,042 Management fees and incentive allocation to affiliate — — — 8,103 8,103 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 Total expenses 83,911 44,947 11,931 102,032 242,821 Other income (expense) 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 ) Less: Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 11,554 ) ( 32 ) — ( 11,586 ) Less: 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 ) 32 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 Add: Non-controlling share of Adjusted EBITDA 5,286 Add: Equity in losses of unconsolidated entities ( 5,778 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 2,391 ) Less: Interest expense ( 70,494 ) Less: Depreciation and amortization expense ( 106,811 ) Less: Incentive allocations — Less: Asset impairment charges ( 2,189 ) Less: Changes in fair value of non-hedge derivative instruments 6,573 Less: Losses on the modification or extinguishment of debt and capital lease obligations ( 3,254 ) Less: Acquisition and transaction expenses ( 6,042 ) Less: Equity-based compensation expense ( 2,553 ) Less: 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 Revenues 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 33 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) III. 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 Revenues 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 Expenses 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 ) Less: Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 4,020 ) ( 92 ) — ( 4,112 ) Less: 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 ) 34 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 Add: Non-controlling share of Adjusted EBITDA 2,101 Add: Equity in losses of unconsolidated entities ( 3,209 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 126 ) Less: Interest expense ( 21,794 ) Less: Depreciation and amortization expense ( 48,341 ) Less: Incentive allocations — Less: Asset impairment charges ( 10,476 ) Less: Changes in fair value of non-hedge derivative instruments — Less: Losses on the modification or extinguishment of debt and capital lease obligations — Less: Acquisition and transaction expenses ( 3,661 ) Less: Equity-based compensation expense ( 411 ) Less: 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 Revenues 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 35 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) IV. 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 Revenues 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 Expenses 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 ) Loss on extinguishment of debt — ( 4,724 ) — — ( 4,724 ) Interest income 29 22 — 12 63 Other income — 32 — — 32 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 ) (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 ) Less: Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 8,681 ) ( 167 ) — ( 8,848 ) Less: Dividends on preferred shares — — — 8,618 8,618 Net income (loss) from continuing operations attributable to shareholders $ 70,690 $ ( 12,740 ) $ ( 6,494 ) $ ( 71,345 ) $ ( 19,889 ) 36 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, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Adjusted EBITDA $ 160,891 $ 7,537 $ ( 2,201 ) $ ( 27,760 ) $ 138,467 Add: Non-controlling share of Adjusted EBITDA 5,451 Add: Equity in losses of unconsolidated entities ( 2,944 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities 287 Less: Interest expense ( 44,655 ) Less: Depreciation and amortization expense ( 97,405 ) Less: Incentive allocations — Less: Asset impairment charges ( 10,476 ) Less: Changes in fair value of non-hedge derivative instruments ( 181 ) Less: Losses on the modification or extinguishment of debt and capital lease obligations ( 4,724 ) Less: Acquisition and transaction expenses ( 6,855 ) Less: Equity-based compensation expense ( 702 ) Less: Benefit from income taxes 3,848 Net loss attributable to shareholders from continuing operations $ ( 19,889 ) Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows: Six Months Ended June 30, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Revenues Africa $ 8,473 $ — $ — $ — $ 8,473 Asia 58,277 — — 8,032 66,309 Europe 70,859 — — — 70,859 North America 18,069 37,822 314 2,730 58,935 South America 2,573 — — — 2,573 Total $ 158,251 $ 37,822 $ 314 $ 10,762 $ 207,149 37 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) V . Balance Sheet and Location of Long-Lived Assets The following tables sets forth summarized balance sheet information and the geographic location of property, plant and equipment and leasing equipment, net: June 30, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Total assets $ 1,783,011 $ 1,078,163 $ 428,528 $ 264,244 $ 3,553,946 Debt, net — 279,082 25,000 1,823,004 2,127,086 Total liabilities 189,738 423,695 38,816 1,860,684 2,512,933 Non-controlling interests in equity of consolidated subsidiaries — 11,226 1,697 524 13,447 Total equity 1,593,273 654,468 389,712 ( 1,596,440 ) 1,041,013 Total liabilities and equity $ 1,783,011 $ 1,078,163 $ 428,528 $ 264,244 $ 3,553,946 June 30, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Property, plant and equipment and leasing equipment, net Asia $ 398,602 $ — $ — $ 63,054 $ 461,656 Europe 799,826 — — — 799,826 North America 188,382 735,341 278,753 114,714 1,317,190 South America 92,420 — — — 92,420 Total $ 1,479,230 $ 735,341 $ 278,753 $ 177,768 $ 2,671,092 December 31, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Total assets $ 1,704,205 $ 989,928 $ 400,217 $ 293,627 $ 3,387,977 Debt, net — 253,473 25,000 1,626,289 1,904,762 Total liabilities 219,692 365,629 38,242 1,665,093 2,288,656 Non-controlling interests in equity of consolidated subsidiaries — 20,785 1,354 524 22,663 Total equity 1,484,513 624,299 361,975 ( 1,371,466 ) 1,099,321 Total liabilities and equity $ 1,704,205 $ 989,928 $ 400,217 $ 293,627 $ 3,387,977 38 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) December 31, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total Property, plant and equipment and leasing equipment, net Asia $ 445,566 $ — $ — $ 56,702 $ 502,268 Europe 774,300 — — — 774,300 North America 208,190 702,393 269,680 117,782 1,298,045 South America 25,009 — — — 25,009 Total $ 1,453,065 $ 702,393 $ 269,680 $ 174,484 $ 2,599,622 18. EARNINGS PER SHARE AND EQUITY Basic earnings per common share (“EPS”) is calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities. Diluted EPS is calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities and potentially dilutive securities. Potentially dilutive securities are calculated using the treasury stock method. The calculation of basic and diluted EPS is presented below: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except share and per share data) 2021 2020 2021 2020 Net loss from continuing operations $ ( 36,608 ) $ ( 15,728 ) $ ( 71,484 ) $ ( 20,119 ) Net income from discontinued operations, net of income taxes — — — 1,331 Net loss ( 36,608 ) ( 15,728 ) ( 71,484 ) ( 18,788 ) Less: Net loss attributable to non-controlling interests in consolidated subsidiaries ( 6,625 ) ( 4,112 ) ( 11,586 ) ( 8,848 ) Less: Dividends on preferred shares 6,551 4,079 11,176 8,618 Net loss attributable to shareholders $ ( 36,534 ) $ ( 15,695 ) $ ( 71,074 ) $ ( 18,558 ) Weighted Average Common Shares Outstanding - Basic (1) 86,030,652 86,009,959 86,029,305 86,009,029 Weighted Average Common Shares Outstanding - Diluted (1) 86,030,652 86,009,959 86,029,305 86,009,029 Basic Continuing operations $ ( 0.42 ) $ ( 0.18 ) $ ( 0.83 ) $ ( 0.23 ) Discontinued operations $ — $ — $ — $ 0.02 Diluted Continuing operations $ ( 0.42 ) $ ( 0.18 ) $ ( 0.83 ) $ ( 0.23 ) Discontinued operations $ — $ — $ — $ 0.02 ________________________________________________________ (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. 39 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 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. 19. COMMITMENTS AND CONTINGENCIES In the normal course of business we, and our subsidiaries, may be involved in various claims, legal proceedings, or may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. Within our offshore energy business, a lessee did not fulfill its obligation under its charter arrangement, therefore we are pursuing rights afforded to us under the charter and the range of potential losses against the obligation is $ 0.0 million to $ 3.3 million. Our maximum exposure under other arrangements is unknown as no additional claims have been made. We believe the risk of loss in connection with such arrangements is remote. We have also entered into an arrangement with our non-controlling interest holder of Repauno, as part of the initial acquisition, whereby the non-controlling interest holder may receive additional payments contingent upon the achievement of certain conditions, not to exceed $ 15.0 million. We will account for such amounts when and if such conditions are achieved. 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 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. 20. SUBSEQUENT EVENTS 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. Dividends 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. 40