What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-07-29 · 358 added, 213 removed, 1022 unchanged (36% of the section changed)

3 unchanged sentences

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

Notes June 30, 2021 December 31, 2020

Notes September 30, 2021 December 31, 2020

Cash and cash equivalents 2 $ 176,052 $ 121,703

20 unchanged sentences

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)

97,896,522 and 85,617,146 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)

Preferred shares ($ 0.01 par value per share;

200,000,000 shares authorized;

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

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

Additional paid in capital 1,420,247 1,130,106

9 unchanged sentences

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

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

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

Notes 2021 2020 2021 2020

10 unchanged sentences

Total expenses 176,917 107,847 419,738 330,339

Other (expense) income

Other income (expense)

Equity in losses of unconsolidated entities 8 ( 4,082 ) ( 2,501 ) ( 9,860 ) ( 5,445 )

3 unchanged sentences

Other (expense) income ( 8,068 ) — ( 8,771 ) 32

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

Total other income (expense) 1,018 ( 3,557 ) ( 3,180 ) ( 12,181 )

Loss from continuing operations before income taxes ( 39,937 ) ( 27,695 ) ( 112,892 ) ( 51,662 )

18 unchanged sentences

(Dollars in thousands)

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

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

2021 2020 2021 2020

7 unchanged sentences

________________________________________________________

(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.

(1) Net of deferred tax expense (benefit) of $ 1,798 and $( 3,580 ) for the three months ended September 30, 2021 and 2020, respectively, and $( 2,674 ) and $( 4,474 ) for the nine months ended September 30, 2021 and 2020, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three and Six Months Ended June 30, 2021

Three and Nine Months Ended September 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

9 unchanged sentences

Equity-based compensation 2,553 2,553

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

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

Net loss ( 32,080 ) ( 7,363 ) ( 39,443 )

1 unchanged sentence

Total comprehensive loss ( 32,080 ) ( 54,640 ) ( 7,363 ) ( 94,083 )

Settlement of equity-based compensation ( 238 ) ( 238 )

Issuance of common shares 123 291,701 291,824

Conversion of participating securities ( 2 ) ( 2 )

Dividends declared - common shares ( 28,409 ) ( 28,409 )

Issuance of preferred shares — 20 20

Dividends declared - preferred shares ( 6,791 ) ( 6,791 )

Equity-based compensation 728 728

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

Equity - September 30, 2021 $ 979 $ 133 $ 1,420,247 $ ( 120,136 ) $ ( 103,755 ) $ 6,574 $ 1,204,042

Three and Nine Months Ended September 30, 2020

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

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

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

Other comprehensive income — 8,758 — 8,758

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

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

Other comprehensive loss — ( 3,354 ) — ( 3,354 )

Total comprehensive loss ( 9,940 ) ( 3,354 ) ( 8,848 ) ( 22,142 )

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

Issuance of common shares 7 304 311

4 unchanged sentences

Equity-based compensation 702 702

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

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

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

2 unchanged sentences

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

Issuance of common shares 5 150 155

Conversion of participating securities ( 5 ) ( 5 )

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

Issuance costs of preferred shares ( 542 ) ( 542 )

Issuance of preferred shares 10 20,490 20,500

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

Equity-based compensation 621 621

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

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

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Net loss $ ( 110,927 ) $ ( 43,997 )

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

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

Equity in losses of unconsolidated entities 9,860 5,445

6 unchanged sentences

Asset impairment 3,048 14,391

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

Deferred taxes ( 2,311 ) ( 7,374 )

Change in fair value of non-hedge derivative ( 1,979 ) 181

12 unchanged sentences

Principal collections on finance leases 1,707 7,001

Acquisition of business, net of cash acquired ( 627,399 ) —

Acquisition of leasing equipment ( 299,564 ) ( 252,859 )

10 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

6 unchanged sentences

Release of maintenance deposits ( 19,615 ) ( 12,429 )

Proceeds from issuance of common shares, net of underwriter's discount 291,822 —

Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 101,201 20,223

4 unchanged sentences

Net cash provided by financing activities $ 1,349,020 $ 299,689

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

Net increase (decrease) in cash and cash equivalents and restricted cash 298,032 ( 79,111 )

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

11 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

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”).

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”), (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”) and (iv) five freight railroads and one switching company (“Transtar”) that provide rail service to certain manufacturing and production facilities.

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).

We have four reportable segments, (i) Aviation Leasing, (ii) Jefferson Terminal, (iii) Ports and Terminals and (iv) Transtar, which operate in two primary businesses, Equipment Leasing and Infrastructure (see Note 19).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

GM-FTAI Holdco LLC

In September 2021, through GM-FTAI Holdco LLC (“Holdco”), we acquired a 50 % interest in Aleon Renewable Metals LLC (“Aleon”) and a 1 % interest in Gladieux Metals Recycling (“GMR”) for $ 52.5 million.

Aleon plans to develop a lithium-ion battery recycling business across the United States.

Each planned location will collect, discharge and disassemble lithium-ion batteries to extract various metals in high-purity form for resale into the lithium-ion battery production market.

GMR specializes in recycling spent catalyst produced in the petroleum refining industry.

Aleon and GMR are governed by separate boards of directors.

Holdco is solely reliant on its interest holders to finance its activities and therefore is a VIE.

We concluded that we are not the primary beneficiary of Holdco; therefore, we do not consolidate Holdco and account for this investment in accordance with the equity method.

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.

Restricted Cash — Restricted cash consists of prepaid interest and principal pursuant to the requirements of certain of our debt agreements (see Note 10) and other qualifying construction projects at Jefferson Terminal.

1 unchanged sentence

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.

We had Aviation inventory of $ 82.3 million and $ 58.2 million as of September 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.

We had commodities inventory of $ 4.7 million and $ 0.1 million as of September 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.

Unamortized deferred financing costs of $ 60.9 million and $ 36.2 million as of September 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 $ 0.4 million and $ 1.6 million as of September 30, 2021 and December 31, 2020, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 14.4 million an d $ 2.1 million for the three months ended September 30, 2021 and 2020, respectively, and $ 18.9 million and $ 6.2 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in Interest expense in the Consolidated Statements of Operations.

Revenue Recognition

15 unchanged sentences

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

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

5 unchanged sentences

When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Infrastructure Revenues

1 unchanged sentence

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

Rail Revenues —Rail revenues generally consist of the following performance obligations:

industrial switching, interline services, demurrage and storage.

Switching revenues are derived from the performance of switching services, which involve the movement of cars from one point to another within the limits of an individual plant, industrial area, or a rail yard.

Switching revenues are recognized as the services are performed, and the services are completed on the same day they are initiated.

Interline revenues are derived from transportation services for railcars that originate or terminate at our railroads and involve one or more other carriers.

For interline traffic, one railroad typically invoices a customer on behalf of all railroads participating in the route directed by the customer.

The invoicing railroad then pays the other railroads its portion of the total amount invoiced on a monthly basis.

We record revenue related to interline traffic for transportation service segments provided by carriers along railroads that are not owned or controlled by us on a net basis.

Interline revenues are recognized as the transportation movements occur.

Our ancillary services revenue primarily relates to demurrage and storage services.

Demurrage represents charges assessed by railroads for the detention of cars by shippers or receivers of freight beyond a specified free time and is recognized on a per day basis.

Storage services revenue is earned for the provision of storage of shippers’ railcars and is generally recognized on a per day, per car basis, as the storage services are provided.

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

16 unchanged sentences

The finance lease ROU assets are subsequently amortized using the straight-line method.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Operating lease expenses are recognized on a straight-line basis over the lease term.

5 unchanged sentences

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.

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

During the three months ended September 30, 2021, one customer in the Transtar segment accounted for approximately 14 % of total revenue.

As of September 30, 2021, there were two customers in the Aviation Leasing segment that represented 26 % and 10 % of total accounts receivable, net and one customer in the Jefferson Terminal segment that represented 21 % of total accounts receivable, net.

As of December 31, 2020, accounts receivable from two customers in the Aviation Leasing segment represented 40 % and 15 % of total accounts receivable, net.

2 unchanged sentences

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

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The allowance for doubtful accounts was $ 4.9 million and $ 4.6 million as of September 30, 2021 and December 31, 2020, respectively.

There was bad debt expense of $ 1.6 million and $ 0.2 million for the three months ended September 30, 2021 and 2020, respectively, and $ 0.8 million and $ 2.0 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in Operating expenses in the Consolidated Statements of Operations.

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

17 unchanged sentences

See Note 12 for additional details related to our commodity derivatives.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

Other Assets— Other assets is primarily comprised of lease incentives of $ 44.6 million and $ 55.1 million, purchase deposits of $ 12.2 million and $ 6.1 million, prepaid expenses of $ 23.7 million and $ 10.1 million, notes receivable of $ 31.7 million and $ 0.7 million, maintenance right assets of $ 22.6 million and $ 6.4 million and aircraft engine modules, spare parts and used material inventory of $ 82.3 million and $ 58.2 million as of September 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.

For both the three and nine months ended September 30, 2021 and 2020, the Board of Directors declared cash dividends of $ 0.33 and $ 0.99 per common share, respectively.

Additionally, in the quarter ended September 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 $ 0.52 per share, respectively.

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

1 unchanged sentence

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.

Together, the ASUs 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.

2 unchanged sentences

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

12 unchanged sentences

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.

During the nine months ended September 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 nine months ended September 30, 2020.

ACQUISITION OF TRANSTAR, LLC

On July 28, 2021, we completed the acquisition for 100 % of the equity interests of Transtar, LLC (“Transtar”) from United States Steel Corporation (“USS”) for total consideration of $ 636.0 million.

Transtar is comprised of five freight railroads and one switching company, of which two railroads are connected to USS’s largest production facilities.

We also entered into an exclusive rail partnership with USS, under which we will provide rail service to USS for an initial term of 15 years with minimum volume commitments for the first five years.

Transtar operates as a separate reportable segment within our Infrastructure business.

See Note 19 for additional information.

The results of operations at Transtar have been included in the Consolidated Statements of Operations as of the effective date of the acquisition.

In connection with the acquisition, we recorded $ 3.9 million and $ 7.0 million of acquisition and transaction expense during the three and nine months ended September 30, 2021, respectively.

We funded the transaction with bridge loans in an aggregate principal amount of $ 650 million.

In September 2021, we issued new equity and debt and repaid in full the bridge loans.

See Notes 10 and 20 for additional information.

The following fair values assigned to assets acquired and liabilities assumed are preliminary based on management’s estimates and assumptions.

The final valuation and related allocation of the purchase price is subject to change as additional information is received and will be completed no later than 12 months after the closing date.

The final acquisition accounting adjustments may

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

be materially different and may include (i) changes in fair values of Property, plant and equipment and associated salvage values;

(ii) changes in allocations to Intangible assets, such as above or below market leases, customer relationships, as well as goodwill;

and, (iii) other changes to assets and liabilities, such as working capital accounts and inventory.

The following table summarizes the preliminary allocation of the purchase price, as presented in our Consolidated Balance Sheets:

Fair value of assets acquired:

Cash and cash equivalents $ 8,610

Accounts receivable, net 18,625

Operating lease right-of-use assets, net 10,831

Property, plant and equipment, net 506,479

Intangible assets, net 62,500

Other assets 15,594

Total assets 622,639

Fair value of liabilities assumed:

Accounts payable and accrued liabilities 47,010

Operating lease liabilities 10,689

Pension and other postretirement benefits (1)

Other liabilities 8,587

Total liabilities 103,838

Total purchase consideration $ 636,007

________________________________________________________

(1) Included in Other liabilities in the Consolidated Balance Sheets.

(2) Goodwill is primarily attributable to the assembled workforce of Transtar and the synergies expected to be achieved.

This goodwill is assigned to the new Transtar segment and is tax deductible for income tax purposes.

The following table presents the identifiable intangible assets and their estimated useful lives:

Estimated useful life in years Fair value

Above/below market leases 2 - 7

Customer relationships 13 - 15

Total $ 62,500

The following table presents the property, plant and equipment and their estimated useful lives:

Estimated useful life in years Fair value

Railcars and locomotives 1 - 40

Track and track related assets 1 - 40

Land, site improvements and rights N/A 91,890

Bridges and tunnels 15 - 55

Buildings and improvements 3 - 25

Railroad equipment 2 - 15

Terminal machinery and equipment 2 - 15

Vehicles 2 - 5

Construction in progress N/A 1,928

Computer hardware and software 2 - 22

Total $ 506,479

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The unaudited financial information in the table below summarizes the combined results of operations of FTAI and Transtar on a pro forma basis, as though the companies had been combined as of January 1, 2020.

These pro forma results were based on estimates and assumptions which we believe are reasonable.

The pro forma adjustments are primarily comprised of the following:

• The allocation of the purchase price and related adjustments, including adjustments to depreciation and amortization expense related to the fair value of property, plant and equipment and intangible assets acquired;

• Impacts of debt financing, including interest for debt issued and amortization of deferred financing costs;

• The exclusion of acquisition-related costs incurred during the three and nine months ended September 30, 2021 and allocation of substantially all acquisition-related costs to the nine months ended September 30, 2020;

• Associated tax-related impacts of adjustments.

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2020.

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

2021 2020 2021 2020

Total revenue $ 146,233 $ 111,415 $ 389,569 $ 374,184

Net loss attributable to shareholders ( 24,778 ) ( 23,549 ) ( 87,666 ) ( 62,521 )

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Leasing equipment $ 2,137,509 $ 2,042,404

1 unchanged sentence

Leasing equipment, net $ 1,696,594 $ 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.

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

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

1 unchanged sentence

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 3.0 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:

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

Acquisitions:

Dispositions:

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Depreciation expense for leasing equipment is summarized as follows:

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

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

2021 2020 2021 2020

Depreciation expense for leasing equipment $ 36,406 $ 35,104 $ 107,000 $ 104,121

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

FINANCE LEASES, NET

Finance leases, net are summarized as follows:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Finance leases $ 16,148 $ 9,389

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Finance leases, net $ 13,795 $ 6,927

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

During the nine months ended September 30, 2021, we entered into 52 -month sales-type lease arrangements for five airframes.

PROPERTY, PLANT AND EQUIPMENT, NET

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Land, site improvements and rights $ 151,185 $ 52,047

Construction in progress 126,537 425,261

Bridges and tunnels 176,310 —

Buildings and improvements 18,826 4,491

2 unchanged sentences

Railroad equipment 7,792 5,560

Railcars and locomotives 126,429 —

Computer hardware and software 5,337 5,101

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Property, plant and equipment, net $ 1,527,770 $ 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.

During the nine months ended September 30, 2021, we added property, plant and equipment and placed additional assets into service of $ 598.5 million, which primarily consist of assets acquired in our acquisition of Transtar and terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

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

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

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

2021 2020 2021 2020

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Carrying Value

Investment Ownership Percentage June 30, 2021 December 31, 2020

Investment Ownership Percentage September 30, 2021 December 31, 2020

Advanced Engine Repair JV Equity method 25 % $ 21,670 $ 22,721

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FYX Trust Holdco LLC Equity 14 % 1,255 1,255

GM-FTAI Holdco LLC Equity method 50 % 52,500 —

Investments $ 110,963 $ 146,515

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

We did not recognize any other-than-temporary impairments for the three and nine months ended September 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,

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

2021 2020 2021 2020

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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 focus on developing new cost 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.

GM-FTAI Holdco LLC

In September 2021, through GM-FTAI Holdco LLC, we invested $ 52.5 million for a 50 % interest in Aleon and a 1 % interest in GMR.

Aleon plans to develop a lithium-ion battery recycling business across the United States.

Each planned location will collect, discharge and disassemble lithium-ion batteries to extract various metals in high-purity form for resale into the lithium-ion battery production market.

GMR specializes in recycling spent catalyst produced in the petroleum refining industry.

Equity Investments

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Intangible assets and liabilities, net are summarized as follows:

June 30, 2021

Aviation Leasing Jefferson Terminal Total

September 30, 2021

Aviation Leasing Jefferson Terminal Transtar Total

Intangible assets

11 unchanged sentences

December 31, 2020

Aviation Leasing Jefferson Terminal Total

Aviation Leasing Jefferson Terminal Transtar Total

Intangible assets

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Amortization of intangible assets and liabilities is as follows:

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

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

2021 2020 2021 2020

Lease intangibles Equipment leasing revenues $ 1,266 $ 953 $ 3,216 $ 3,016

Lease intangibles Depreciation and amortization 61 — 61 —

Customer relationships Depreciation and amortization 1,610 888 3,387 2,665

Total $ 2,937 $ 1,841 $ 6,664 $ 5,681

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

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

Remainder of 2021 $ 2,818

Thereafter 43,066

Total $ 79,377

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Our debt, net is summarized as follows:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

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(ii) Adjusted Eurodollar Rate + 3.00 %

1/31/2022 $ —

DRP Revolver (2)

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(iii) Taxable Series 2020B Bonds:

(ii) 1/1/2050

(iii) 1/1/2025

Series 2021 Bonds 425,000 (i) Series 2021A Bonds:

1.875 % to 3.000 %

(ii) Series 2021B Bonds:

(i) 1/1/26 to 1/1/50

Senior Notes due

— 6.75 % 3/15/2022 399,331

— N/A N/A 399,331

Senior Notes due

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Senior Notes due 2028 (5)

1,002,494 5.50 % 5/1/28 —

Total bonds payable 2,943,794 1,915,984

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(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.

(4) Includes an unamortized discount of $ 3,713 and $ 4,303 at September 30, 2021 and December 31, 2020, respectively, and an unamortized premium of $ 6,033 and $ 6,976 at September 30, 2021 and December 31, 2020, respectively.

(5) Includes an unamortized premium of $ 2,494 at September 30, 2021.

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

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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.

On September 24, 2021, we issued an additional $ 500 million aggregate principal amount of the Senior Notes due 2028 at an offering price of 100.50 %, plus accrued interest from and including April 12, 2021.

We used a portion of the net proceeds in the amount of $ 358.3 million to repay in full the Bridge Loans (as defined below).

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

Bridge Loan Agreement — On July 28, 2021, in connection with our acquisition of Transtar, we entered into an agreement for senior unsecured bridge term loans (“Bridge Loans”) in an aggregate principal amount of $ 650 million, which we used to finance the acquisition and other certain fees associated with the transaction.

On September 14, 2021, we used net proceeds in the amount of $ 291.7 million from an equity offering (see Note 20) to repay a portion of the Bridge Loans.

On September 24, 2021, we used a portion of the net proceeds in the amount of $ 358.3 million from our issuance of the Senior Notes due 2028 to repay in full the Bridge Loans.

We recorded fees of approximately $ 12.2 million which are included in Interest expense in the Consolidated Statements of Operations.

Series 2021 Bonds — On August 18, 2021, Jefferson issued $ 425 million aggregate principal amount of Series 2021 Bonds, which are designated as $ 225 million of Series 2021A Dock and Wharf Facility Revenue Bonds (the “Series 2021A Bonds”) and $ 200 million of Series 2021B Taxable Facility Revenue Bonds (the “Taxable Series 2021B Bonds”).

The Series 2021A Bonds consist of:

i) $ 39.1 million aggregate principal amount of Serial Bonds maturing between January 1, 2026 and January 1, 2031, and bearing interest at specified fixed rates ranging from 1.875 % to 2.625 % per annum,

ii) $ 38.2 million aggregate principal amount of Term Bonds maturing January 1, 2036, and bearing interest at a fixed rate of 2.750 % per annum,

iii) $ 44.9 million aggregate principal amount of Term Bonds maturing January 1, 2041, and bearing interest at a fixed rate of 2.875 % per annum, and

iv) $ 102.8 million aggregate principal amount of Term Bonds maturing January 1, 2050, and bearing interest at a fixed rate of 3.00 % per annum.

The Taxable Series 2021B Bonds will mature on January 1, 2028, and bear interest at a fixed rate of 4.100 % per annum.

Jefferson used a portion of the net proceeds from the Series 2021 Bonds to repay certain indebtedness, and intend to use a portion of the net proceeds to pay for or reimburse the cost of development, construction and acquisition of certain facilities.

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

FAIR VALUE MEASUREMENTS

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following tables set forth our financial assets measured at fair value on a recurring basis as of September 30, 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

September 30, 2021 September 30, 2021

Total Level 1 Level 2 Level 3 Valuation Technique

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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.

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

September 30, 2021 December 31, 2020

Series 2020 A Bonds (1)

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81,768 79,723

Series 2021 A Bonds (1)

Series 2021 B Bonds (1)

Senior Notes due 2022 — 403,536

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(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.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Notional Amount (BBL in thousands)

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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,

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

2021 2020 2021 2020

3 unchanged sentences

There were no transfers into or out of Level 3 during the periods presented.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

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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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues

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Lease income — 433 — 358 — 791

Rail revenues — — — 24,182 — 24,182

Terminal services revenues — 11,469 — — — 11,469

3 unchanged sentences

Total revenues $ 93,938 $ 11,902 $ ( 458 ) $ 24,540 $ 6,040 $ 135,962

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues

14 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues

6 unchanged sentences

Lease income — 1,295 — 358 — 1,653

Rail revenues — — — 24,182 — 24,182

Terminal services revenues — 32,853 157 — — 33,010

3 unchanged sentences

Total revenues $ 228,482 $ 34,148 $ 9,982 $ 24,540 $ 12,874 $ 310,026

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues

11 unchanged sentences

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

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:

Presented below are the contracted minimum future annual revenues to be received under existing operating and finance leases across several market sectors as of September 30, 2021:

Operating Leases Finance Leases

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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.

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

The following table presents lease related costs:

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

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

2021 2020 2021 2020

Amortization of right-of-use assets $ 161 $ — $ 161 $ —

Interest on lease liabilities 11 — 11 —

Finance lease expense 172 — 172 —

Operating lease expense 1,780 1,230 4,227 3,594

2 unchanged sentences

Total lease expense $ 2,812 $ 1,425 $ 6,476 $ 5,343

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

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

Right-of-use assets, net $ 74,643

3 unchanged sentences

Cash paid for amounts included in the measurement of operating lease liabilities $ 4,208

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

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

Remainder of 2021 $ 4,224

3 unchanged sentences

Total lease liabilities $ 74,134

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

EQUITY-BASED COMPENSATION

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

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

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

In July 2021, in connection with our acquisition of Transtar, we assumed ROU assets of approximately $ 10.8 million with a weighted average remaining term of 5.5 years.

Additionally, during the nine months ended September 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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

EQUITY-BASED COMPENSATION

As of September 30, 2021, the Incentive Plan provides for the issuance of up to 29.8 million shares.

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

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

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

2021 2020 2021 2020

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Total $ 728 $ 621 $ 3,281 $ 1,323 $ 5,942

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.

During the nine months ended September 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.

Additionally, certain of the Manager’s employees exercised 165,268 options at a weighted average exercise price of $ 18.22 and received a net 55,092 common shares.

In connection with our March 2021 offering of preferred shares (see Note 20), 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.

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

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 .

In connection with our September 2021 offering of common shares (see Note 20), we granted options to the Manager related to 1,200,000 common shares at an exercise price of $ 25.50 , which had a grant date fair value of $ 9.2 million.

The assumptions used in valuing the options were:

a 1.34 % risk-free rate, a 3.64 % dividend yield, a 44.78 % volatility and a ten -year term.

During the nine months ended September 30, 2021, we issued 1,052,632 common units of our subsidiary that had a grant date fair value of $ 1.2 million and vest over three years .

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

2 unchanged sentences

Restricted Shares

During the 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 .

During the nine months ended September 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.

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

RETIREMENT BENEFIT PLANS

In connection with the acquisition of Transtar (see Note 4), we assumed certain retirement benefit obligations related to eligible Transtar employees.

Defined Benefit Pensions

Our pension plan covers certain eligible Transtar employees.

These plans are noncontributory.

Pension benefits earned are generally based on years of service and compensation during active employment.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Postretirement Benefits

Our unfunded postretirement plan provides healthcare and life insurance benefits for eligible retirees and dependents of Transtar.

Depending on retirement date and employee classification, certain healthcare plans contain contribution and cost-sharing features such as deductibles and co-insurance.

The remaining healthcare and life insurance plans are non-contributory.

The following table summarizes our retirement benefit plan costs for the three and nine months ended September 30, 2021.

Service costs and interest costs are recorded in Operating expenses and Other (expense) income, respectively, in the Consolidated Statements of Operations.

Pension Benefits Postretirement Benefits

Service costs $ 392 $ 431

Interest costs 45 139

Total $ 437 $ 570

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,

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

2021 2020 2021 2020

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Our effective tax rate differs from the U.S.

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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.

As of and for the nine months ended September 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.

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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.

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of September 30, 2021.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

8 unchanged sentences

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

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

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

2021 2020 2021 2020

3 unchanged sentences

Total $ 3,845 $ 4,591 $ 11,948 $ 14,113

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.

3 unchanged sentences

we do not reimburse the Manager for these expenses.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes our reimbursements to the Manager:

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

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

2021 2020 2021 2020

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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

September 30, 2021 December 31, 2020

Accrued management fees $ 1,211 $ 1,461

Other payables 724 1,317

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

As of September 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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

As of September 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 September 30, 2021 and December 31, 2020 was $ 1.6 million and $ 17.2 million, respectively.

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

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

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

2021 2020 2021 2020

6 unchanged sentences

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

1 unchanged sentence

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).

During the nine months ended September 30, 2021, we granted options to the Manager in connection with the offering of the Series C Preferred Shares (as defined in Note 20) and the offering of common shares in September 2021.

See Notes 15 and 20 for additional information.

2 unchanged sentences

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.

Interest income was $ 0.1 million and $ 0.2 million during the three and nine months ended September 30, 2021.

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.

We have four 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, (iii) Ports and Terminals and (iv) Transtar.

The Aviation Leasing segment consists of aircraft and aircraft engines held for lease and are typically held long-term.

1 unchanged sentence

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.

In July 2021, we acquired Transtar and it operates as a separate reportable segment within our Infrastructure business.

Transtar is comprised of five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities.

See Note 4 for additional information.

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.

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 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;

8 unchanged sentences

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

For the Three Months Ended June 30, 2021

Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Three Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues $ 93,938 $ — $ — $ — $ 5,236 $ 99,174

9 unchanged sentences

Total expenses 51,416 25,926 7,854 19,035 72,686 176,917

Other (expense) income

Other income (expense)

Equity in (losses) earnings of unconsolidated entities ( 369 ) — ( 3,789 ) — 76 ( 4,082 )

Gain on sale of assets, net 12,685 — — — — 12,685

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

Interest income 339 — 145 — ( 1 ) 483

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

Other expense ( 1,680 ) ( 2,090 ) ( 4,100 ) ( 197 ) ( 1 ) ( 8,068 )

Total other income (expense) 10,975 ( 2,090 ) ( 7,744 ) ( 197 ) 74 1,018

Income (loss) from continuing operations before income taxes 53,497 ( 16,114 ) ( 16,056 ) 5,308 ( 66,572 ) ( 39,937 )

(Benefit from) provision for income taxes ( 4 ) 59 ( 1,621 ) ( 74 ) ( 1,640 )

Provision for (benefit from) income taxes 129 47 ( 1,798 ) 1,128 — ( 494 )

Net income (loss) from continuing operations 53,368 ( 16,161 ) ( 14,258 ) 4,180 ( 66,572 ) ( 39,443 )

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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

Three Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Adjusted EBITDA $ 96,002 $ 1,946 $ 2,766 $ 11,466 $ ( 15,791 ) $ 96,389

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Equity-based compensation expense ( 728 )

Provision for income taxes 1,640

Benefit from income taxes 494

Net loss attributable to shareholders from continuing operations $ ( 38,871 )

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

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Africa $ 235 $ — $ — $ — $ 235

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Asia $ 36,421 $ — $ — $ — $ 5,236 $ 41,657

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(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2021

Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues $ 228,482 $ — $ — $ — $ 8,870 $ 237,352

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Income (loss) from continuing operations before income taxes 108,855 ( 39,520 ) ( 22,913 ) 5,308 ( 164,622 ) ( 112,892 )

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

Provision for (benefit from) income taxes 83 163 ( 3,265 ) 1,128 ( 74 ) ( 1,965 )

Net income (loss) from continuing operations 108,772 ( 39,683 ) ( 19,648 ) 4,180 ( 164,548 ) ( 110,927 )

6 unchanged sentences

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

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Adjusted EBITDA $ 236,868 $ 8,329 $ 3,274 $ 11,466 $ ( 48,440 ) $ 211,497

10 unchanged sentences

Equity-based compensation expense ( 3,281 )

Provision for income taxes 1,471

Benefit from income taxes 1,965

Net loss attributable to shareholders from continuing operations $ ( 109,945 )

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

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Africa $ 235 $ — $ — $ — $ — $ 235

7 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2020

Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues $ 66,491 $ — $ — $ — $ 3,308 $ 69,799

10 unchanged sentences

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

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

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

Interest income 41 — — — 17 58

Other expense — ( 1 ) — — ( 1 )

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

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

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

8 unchanged sentences

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

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Adjusted EBITDA $ 70,562 $ 4,348 $ ( 837 ) $ — $ ( 15,437 ) $ 58,636

13 unchanged sentences

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

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Africa $ 1,781 $ — $ — $ — $ — $ 1,781

7 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2020

Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Equipment leasing revenues $ 224,742 $ — $ — $ — $ 11,340 $ 236,082

26 unchanged sentences

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

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Adjusted EBITDA $ 231,453 $ 11,885 $ ( 3,038 ) $ — $ ( 43,197 ) $ 197,103

13 unchanged sentences

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

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Africa $ 10,254 $ — $ — $ — $ — $ 10,254

9 unchanged sentences

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

June 30, 2021

September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Total assets $ 1,869,233 $ 1,304,236 $ 364,058 $ 771,895 $ 373,095 $ 4,682,517

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Total liabilities and equity $ 1,869,233 $ 1,304,236 $ 364,058 $ 771,895 $ 373,095 $ 4,682,517

June 30, 2021

September 30, 2021

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Property, plant and equipment and leasing equipment, net

6 unchanged sentences

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Total assets $ 1,704,205 $ 989,928 $ 400,217 $ — $ 293,627 $ 3,387,977

9 unchanged sentences

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total

Property, plant and equipment and leasing equipment, net

9 unchanged sentences

The calculation of basic and diluted EPS is presented below:

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

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

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

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________________________________________________________

(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.

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

For the three months ended September 30, 2021 and 2020, 950,524 and 21,244 shares, respectively, and for the nine months ended September 30, 2021 and 2020, 940,254 and 504 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the nine months ended September 30, 2021, we issued 17,155 common shares to certain directors as compensation.

During the nine months ended September 30, 2021, certain holders of Class B Units (see Note 18) converted 279,678 Class B Units in exchange for 207,129 common shares.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

4 unchanged sentences

See Note 15 for information related to options issued to the Manager in connection with such offering.

Common Shares

In September 2021, we issued 12,000,000 common shares, par value $ 0.01 per share, at a price of $ 25.50 per share.

We received net proceeds of $ 291.7 million after deducting underwriting discounts and offering expenses.

The proceeds were used to repay a portion of the Bridge Loans (see Note 10).

See Note 15 for information related to options issued to the Manager in connection with such offering.

COMMITMENTS AND CONTINGENCIES

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

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

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

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

2 unchanged sentences

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.

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.

In October 2021, the underwriters of our September 2021 equity offering exercised an option to purchase an additional 1,283,863 common shares, par value $ 0.01 per share, at a price of $ 25.50 per share.

On October 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 September 30, 2021, payable on November 29, 2021 to the holders of record on November 15, 2021.

Additionally, on October 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 December 15, 2021 to the holders of record on December 1, 2021.

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

What changed 10-Q

Item 1. Financial Statements