What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-02-28 compared with 2021-02-26 · 255 added, 194 removed, 464 unchanged (49% of the section changed)

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While our strategy permits us to acquire a broad array of transportation-related assets, we are currently active in four sectors where we believe there are meaningful opportunities to deploy capital to achieve attractive risk adjusted returns:

aviation, energy, intermodal transport and ports and terminals.

aviation, rail, energy and ports and terminals.

• Commercial air travel and air freight activity have historically been long-term growth sectors and are tied to the underlying demand for passenger and freight movement.

We continue to see long-term demand for aviation related assets.

• The railroad market consists of short line and regional railroads in North America that provide services including haulage, switching and transportation services.

• Offshore energy service equipment refers to vessels supporting the extraction, processing and transportation of oil and natural gas from deposits located beneath the sea floor, as well as the ongoing inspection, repair, maintenance and ultimate abandonment of subsea wells and associated infrastructure.

The prolonged oil price decline has led to oil and gas companies reducing and deferring spending decisions, creating an oversupply of offshore energy assets, and in turn, lower day-rates, utilization and earnings for offshore service companies.

These rates, however, have partially rebounded over the course of the past three years.

• The intermodal transport market includes the efficient movement of goods throughout multiple modes of transportation, making it possible to move cargo from a point of origin to a final destination without repeated unpacking and repacking.

Over the last year, new container prices have increased significantly.

• Land-based infrastructure refers to facilities that enable the storage, unloading, loading and movement of crude oil and refined products from producers to end users, such as refineries.

• Land-based infrastructure refers to facilities that enable the storage, unloading, loading and movement of crude oil and refined products and LPG from producers to end users, such as refineries.

Customers of land-based infrastructure typically purchase capacity on a take-or-pay basis, and the economics of these assets directly relate to the volume of throughput.

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

Market conditions due to the outbreak of COVID-19 resulted in asset impairment charges and a decline in our equipment leasing revenues during the year ended December 31, 2020.

Market conditions due to the COVID-19 pandemic resulted in asset impairment charges and a decline in our equipment leasing revenues during the year ended December 31, 2021.

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

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The value of these deposits was $145.5 million as of December 31, 2021.

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

and international governments, all of which remain uncertain.

As COVID-19 continues to evolve, the extent to which COVID-19 impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to try and contain COVID-19 or treat its impact.

We continue to monitor the pandemic and, the extent to which the continued spread of the virus adversely affects our customer base and therefore revenue.

As the COVID-19 pandemic is complex and rapidly evolving, our plans as described herein may change.

At this point, we cannot reasonably estimate the duration and severity of this pandemic, which could have a material adverse impact on our business, results of operations, financial position and cash flows.

For additional detail, see Liquidity and Capital Resources and Item 1A.

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Our reportable segments are comprised of interests in different types of infrastructure and equipment leasing assets.

We currently conduct our business through the following three reportable segments:

(i) Aviation Leasing, which is within the Equipment Leasing Business, and (ii) Jefferson Terminal and (iii) Ports and Terminals, which together comprise our Infrastructure Business.

We currently conduct our business through the following four reportable segments:

(i) Aviation Leasing, which is within the Equipment Leasing Business, and (ii) Jefferson Terminal, (iii) Ports and Terminals and (iv) Transtar, which together comprise our Infrastructure Business.

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 and refined products terminal and other related assets.

The Ports and Terminals segment consists of Repauno, a 1,630 acre deep-water port located along the Delaware River with an underground storage cavern and multiple industrial development opportunities.

Additionally, Ports and Terminals includes an equity method investment (“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 December 2019, we completed the sale of substantially all of our railroad business, which was formerly reported as our Railroad segment.

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, a new multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities, and an equity method investment (“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 in operation.

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.

In December 2019, we completed the sale of Central Maine & Quebec Railway (“CMQR”), which was formerly reported as our Railroad segment.

Under ASC 205-20, this disposition met the criteria to be reported as discontinued operations and the assets, liabilities and results of operations have been presented as discontinued operations for all periods presented.

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Accordingly, we have presented this operating segment, along with Corporate results, within Corporate and Other effective in 2019.

All prior periods have been restated for historical comparison across segments.

Corporate and Other primarily consists of debt, unallocated corporate 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 activities and are typically subject to long-term operating leases, (ii) an investment in an unconsolidated entity engaged in the 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 activities and are typically subject to operating leases, (ii) an investment in an unconsolidated entity engaged in the leasing of shipping containers, (iii) railroad assets which consist of equipment that support a railcar cleaning business and (iv) various clean technology and sustainability investments .

Our reportable segments are comprised of investments in different types of transportation infrastructure and equipment.

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however, financial information presented by segment includes the impact of intercompany eliminations.

Aviation Leasing Organizational Restructuring

In early 2020, we completed an organizational restructuring of the Aviation Leasing segment.

Previously, Aviation Leasing’s employees were employed by the Manager and compensation and related costs associated with these employees were reimbursed to the Manager, per the Management Agreement.

These costs were reported within Corporate and Other.

Effective in the first quarter of 2020, Aviation Leasing’s employees are employed by one of our subsidiaries.

Compensation and related costs incurred by this subsidiary are reported within the Aviation Leasing segment.

Prior periods have been restated for historical comparison.

See Note 17 to the consolidated financial statements for additional details.

In the fourth quarter of 2021, the Company announced that it intends to spin off its infrastructure business as a separate publicly traded entity.

The infrastructure business is expected to be spun out in an entity taxed as a corporation for U.S.

federal income tax purposes and will hold, among other things, the Jefferson, Repauno, Long Ridge and Transtar assets, and will retain all related project-level debt of those entities.

The infrastructure entity intends to remit to FTAI approximately $800 million in cash as part of the separation.

FTAI is expected to retain the aviation business and certain other assets and FTAI's outstanding corporate indebtedness, other than any indebtedness that may be paid off in connection with the transaction.

The spin off transaction is expected to be completed during the second quarter of 2022.

The spin off transaction remains subject to approval by FTAI's board of directors and may not be completed on the terms described above or at all.

Results of Operations

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Adjusted EBITDA is not a financial measure in accordance with U.S.

generally accepted accounting principles (“GAAP”).

generally accepted accounting principles (“U.S.

This performance measure provides the CODM with the information necessary to assess operational performance, as well as making resource and allocation decisions.

We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.

Adjusted EBITDA is defined as net income 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.

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.

The following table presents our consolidated results of operations:

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Lease income 2,424 1,186 3,362 1,238 (2,176)

Rail revenues 56,803 — — 56,803 —

Terminal services revenues 45,038 50,887 42,965 (5,849) 7,922

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Total expenses 611,391 460,642 631,493 150,749 (170,851)

Other (expense) income

Other income (expense)

Equity in losses of unconsolidated entities (12,734) (5,039) (2,375) (7,695) (2,664)

(Loss) gain on sale of assets, net (308) 203,250 3,911 (203,558) 199,339

Gain (loss) on sale of assets, net 49,031 (308) 203,250 49,339 (203,558)

Loss on extinguishment of debt (3,254) (11,667) — 8,413 (11,667)

Interest income 1,711 162 531 1,549 (369)

Other income 70 3,445 3,983 (3,375) (538)

Total other (expense) income (16,782) 204,851 7,374 (221,633) 197,477

Other (expense) income (10,928) 70 3,445 (10,998) (3,375)

Total other income (expense) 23,826 (16,782) 204,851 40,608 (221,633)

(Loss) income from continuing operations before income taxes (131,763) (110,928) 152,132 (20,835) (263,060)

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(2) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) net loss of $(5,435), $(2,563) and $(1,196), (ii) interest expense of $1,138, $131 and $477, (iii) depreciation and amortization expense of $5,513, $1,045 and $1,078, (iv) acquisition and transaction expense of $581, $0 and $0 and (v) changes in fair value of non-hedge derivative instruments of $(589), $0 and $0, respectively.

(i) net loss of $(13,242), $(5,435) and $(2,563), (ii) interest expense of $5,612, $1,138 and $131, (iii) depreciation and amortization expense of $12,643, $5,513 and $1,045, (iv) acquisition and transaction expense of $104, $581 and $0, (v) changes in fair value of non-hedge derivative instruments of $19,850, $(589) and $0, (vi) asset impairment of $2,146, $0 and $0 and (vii) equity-based compensation of $779, $0 and $0, respectively.

(3) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

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Comparison of the years ended December 31, 2021 and 2020

Total revenues decreased $212.3 million primarily due to lower revenues in the Jefferson Terminal, Aviation Leasing and Ports and Terminals segments.

Total revenues increased $89.3 million, primarily due to the acquisition of Transtar and higher revenues in the Aviation Leasing and Ports and Terminals segments, partially offset by lower revenues in the Jefferson Terminal segment.

Equipment Leasing

• Maintenance revenue decreased by $33.5 million primarily due to lower aircraft and engine utilization as a result of the COVID-19 pandemic and lower end-of-lease maintenance compensation, partially offset by the recognition of maintenance deposits due to the early redelivery of eleven aircraft.

• Lease income decreased $29.6 million primarily due to an increase in aircraft redelivered, a decrease in the number of engines on lease and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft placed on lease.

• Other revenue increased by $12.1 million, which primarily reflects (i) an increase of $9.4 million in the Aviation Leasing segment due to an increase in end-of-lease redelivery compensation and settlement of an engine loss and (ii) an increase of $2.6 million in the offshore energy business related to victualling income as our vessels were on-hire longer in 2020 compared to 2019.

• Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered.

• Other revenue increased $16.2 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020.

• Lease income decreased $5.4 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Infrastructure

• Crude marketing revenues decreased $157.9 million primarily due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019.

• Rail revenues increased $56.8 million due to the acquisition of Transtar in July 2021.

• Other revenue increased $7.7 million which primarily reflects (i) higher butane sales at Repauno and (ii) a gain on butane forward purchase and sale contracts at Repauno.

• Crude marketing revenues decreased $8.2 million.

In 2019, Jefferson directly sourced crude from producers in Canada, arranging logistics to its terminal and then marketing crude to third parties to take advantage of favorable spreads.

The resulting crude sales and corresponding costs of sale, including logistical costs, are reflected in Crude marketing revenues and Operating expenses, respectively.

Jefferson exited this crude marketing strategy in the fourth quarter of 2019 as a result of unfavorable oil spreads and as certain logistical commitments expired.

Revenues in 2020 include contracts executed in 2019 but delivered in 2020.

• Other revenue decreased $8.7 million which primarily reflects (i) a decrease of $6.3 million at Long Ridge due to Long Ridge being accounted for as an equity method investment starting in the fourth quarter of 2019 (the “Long Ridge Transaction”), (ii) a decrease of $3.9 million at Repauno due to lower sales of butane, partially offset by (iii) an increase of $1.5 million in our railcar cleaning business due to higher volumes.

• Terminal services revenue increased $7.9 million which primarily reflects (i) an increase of $15.0 million due to increased activity and storage capacity at Jefferson Terminal, partially offset by (ii) a decrease of $7.1 million due to the Long Ridge Transaction.

Total expenses decreased $170.9 million primarily due to decreases in (i) operating expenses, (ii) management fees and incentive allocation to affiliate and (iii) acquisition and transaction expenses, partially offset by an increase in (iv) asset impairment, (v) depreciation and amortization and (vi) interest expense.

Operating expenses decreased $182.1 million primarily due to decreases in:

• cost of sales of $167.2 million primarily due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and

• facility operations of $8.7 million which primarily reflects (i) a decrease of $4.9 million at Jefferson Terminal due to lower railcar expenses associated with the crude marketing strategy and (ii) a decrease of $4.1 million due to the Long Ridge Transaction.

Management fees and incentive allocation to affiliate decreased $17.5 million which reflects (i) lower incentive fees of $21.2 million due to the decrease in gains on sale of assets, net, partially offset by (ii) an increase of $3.7 million in the base management fee as our average total equity was higher in 2020 compared to 2019.

Acquisition and transaction expenses decreased $7.8 million which primarily reflects lower professional fees and other acquisition-related costs due to fewer transactions in 2020 compared to 2019.

Asset impairment increased $29.3 million primarily due to asset impairment charges in 2020 in the Aviation Leasing segment.

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

Depreciation and amortization increased $3.4 million which primarily reflects (i) an increase of $6.2 million due to assets placed into service at Jefferson Terminal, (ii) an increase of $4.9 million in the Aviation Leasing segment primarily due to a change in the estimated useful lives and residual values of certain aircraft engines and additional assets owned and on lease, partially offset by (iii) a decrease of $8.4 million due to the Long Ridge Transaction.

• Terminal services revenue decreased $5.8 million which primarily reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19.

Total expenses increased $150.7 million primarily due to increases in (i) interest expense, (ii) operating expenses, (iii) depreciation and amortization and (iv) acquisition and transaction expenses, partially offset by a decrease in (v) asset impairment.

Interest expense increased $72.8 million primarily due to:

• an increase of $9.8 million in Corporate and Other primarily due to (i) the issuance of $400 million of senior notes due 2027 (“2027 Notes”), (ii) an increase in the average outstanding debt of $83.6 million for the senior notes due 2025 (“2025 Notes”), partially offset by (iii) a decrease in interest expense related to the FTAI Pride Credit Agreement which was repaid in full in March 2020;

• a decrease of $6.8 million at Jefferson Terminal due to the issuance of the Series 2020 Bonds (“Jefferson Refinancing”), which reduced its weighted average interest rate.

See Note 9 to the consolidated financial statements for additional information.

Total other income decreased $221.6 million which primarily reflects:

• a decrease of $203.6 million in gains on sale of assets, net due to the Long Ridge Transaction and asset sales in the Aviation Leasing segment in 2019;

• a loss on extinguishment of debt of $11.7 million due to (i) the early repayment of $300 million of senior unsecured notes due 2022 (“2022 Notes”) in December 2020 and (ii) the Jefferson Refinancing.

• an increase of $67.6 million in Corporate and Other primarily which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which was redeemed in full in May 2021;

• an increase of $5.4 million at Jefferson Terminal due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement.

See Note 10 to the consolidated financial statements for additional information.

• a decrease in other income of $3.4 million due to the Long Ridge Transaction;

• an increase of $2.7 million in equity in losses of unconsolidated entities.

Operating expenses increased $63.0 million primarily due to:

• an increase of $29.0 million due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expense;

• an increase in bad debt expense of $9.4 million in the Aviation Leasing segment;

• an increase in cost of sales and other associated costs of $6.8 million, which primarily reflects (i) an increase of $17.2 million in the Aviation Leasing segment due to costs associated with the sale of engine parts, partially offset by (ii) a decrease of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (iii) a decrease of $2.3 million at Repauno;

• an increase in shipping and storage expense of $4.6 million primarily in the Aviation Leasing segment.

Depreciation and amortization increased $29.4 million which primarily reflects (i) an increase of $14.5 million due to additional assets placed into service at Repauno and Jefferson Terminal and (ii) an increase of $8.3 million due to the acquisition of Transtar.

Acquisition and transaction expenses increased $12.1 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021, primarily related to early lease terminations, in the Aviation Leasing segment.

Total other income increased $40.6 million which primarily reflects:

• an increase of $49.3 million in gains on sale of assets, net due to asset sales in the Aviation Leasing segment;

• a decrease in loss on extinguishment of debt of $8.4 million;

• an increase in other expense of $11.0 million primarily due to a write-off of an earn-out receivable at Long Ridge and losses related to crude oil forward transactions at Jefferson Terminal;

• an increase of $7.7 million in equity in losses of unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

Provision for income taxes

The provision for income taxes decreased $23.7 million which primarily reflects deferred tax expense in 2019 due to the gain on sale for the Long Ridge Transaction.

Net income from continuing operations

Net income from continuing operations decreased $239.3 million primarily due to the changes discussed above.

Net income from discontinued operations, net of income taxes

Net income from discontinued operations, net of income taxes decreased $72.1 million due to the sale of our railroad business in December 2019.

The benefit from income taxes decreased $4.8 million primarily due to the acquisition of Transtar and a higher provision in the Aviation Leasing segment.

Net (loss) income from continuing operations

Net loss from continuing operations increased $25.7 million primarily due to the changes noted above.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA decreased $260.1 million primarily due to the changes noted above.

Aviation Leasing Segment

Adjusted EBITDA increased $93.0 million primarily due to the changes noted above.

Aviation Leasing

As of December 31, 2021, in our Aviation Leasing segment, we own and manage 315 aviation assets, consisting of 108 commercial aircraft and 207 engines.

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Purchases 1 51 52

Sales (4) — (4)

Transfers 1 (19) (18)

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Assets at December 31, 2021 68 139 207

The following table presents our results of operations:

The following table presents our results of operations for our Aviation Leasing segment:

Year Ended December 31, Change

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Equity in losses of unconsolidated entities (1,403) (1,932) (1,829) 529 (103)

(Loss) gain on sale of assets, net (300) 81,954 3,911 (82,254) 78,043

Gain (loss) on sale of assets, net 49,015 (300) 81,954 49,315 (82,254)

Interest income 1,153 94 104 1,059 (10)

Total other (expense) income (2,138) 80,229 3,370 (82,367) 76,859

Other expense (1,680) — — (1,680) —

Total other income (expense) 47,085 (2,138) 80,229 49,223 (82,367)

Income before income taxes 158,160 83,837 261,605 74,323 (177,768)

(Benefit from) provision for income taxes (4,812) 2,826 2,280 (7,638) 546

Provision for (benefit from) income taxes 935 (4,812) 2,826 5,747 (7,638)

Net income 157,225 88,649 258,779 68,576 (170,130)

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Net income attributable to shareholders $ 157,225 $ 88,649 $ 258,779 $ 68,576 $ (170,130)

(Benefit from) provision for income taxes (4,812) 2,826 2,280 (7,638) 546

Provision for (benefit from) income taxes 935 (4,812) 2,826 5,747 (7,638)

Equity-based compensation expense — — — — —

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

— — (172) — 172

Adjusted EBITDA (non-GAAP) $ 340,613 $ 288,752 $ 429,398 $ 51,861 $ (140,646)

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(i) depreciation expense of $139,972, $133,904 and $128,990, (ii) lease intangible amortization of $4,993, $3,747 and $7,181 and (iii) amortization for lease incentives of $22,985, $26,599 and $22,981, respectively.

(2) Includes the proportionate share of the unconsolidated entities' net income adjusted for the excluded and included items detailed in the table, for which there were no adjustments.

(3) Includes depreciation and amortization expense of $172 for the year ended December 31, 2018.

(2) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) net loss of $(1,403), $(1,932) and $(1,829) and (ii) depreciation and amortization of $200, $0 and $0, respectively.

Comparison of the years ended December 31, 2021 and 2020

Total revenues decreased $55.5 million driven by lower lease income and maintenance revenue partially offset by higher other revenue.

• Maintenance revenue decreased $33.5 million primarily due to lower aircraft and engine utilization as a result of the COVID-19 pandemic and lower end-of-lease maintenance compensation, partially offset by the recognition of maintenance deposits due to the early redelivery of eleven aircraft.

• Lease income decreased $31.0 million primarily due to an increase in aircraft redelivered, a decrease in the number of engines on lease and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft placed on lease.

• Other revenue increased $9.4 million primarily due to the increase in end-of lease redelivery compensation and settlement of an engine loss.

Total expenses increased $39.9 million primarily due to an increase in asset impairment, depreciation and amortization expense and operating expenses, partially offset by a decrease in acquisition and transaction expense.

• Asset impairment increased $34.0 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation.

Total revenues increased $40.2 million driven by higher maintenance revenue and other revenue partially offset by lower lease income.

• Other revenue increased $17.7 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020.

• Lease income decreased $4.3 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Total expenses increased $15.1 million primarily due to an increase in operating expenses and depreciation and amortization expense, partially offset by a decrease in asset impairment and acquisition and transaction expense.

• Operating expenses increased $35.4 million primarily as a result of an increase in costs associated with the sale of engine parts, bad debt expense, shipping and storage fees and other operating expenses.

• Depreciation and amortization expense increased $6.1 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021 which are primarily related to early lease terminations.

See Note 5 to the consolidated financial statements for additional information.

• Depreciation and amortization expense increased $4.9 million driven by a change in the estimated useful lives and residual values of certain aircraft engines and additional assets owned and on lease, partially offset by additional aircraft redelivered and parted out into our engine leasing pool.

• Operating expenses increased $3.0 million primarily as a result of an increase in shipping and storage fees, compensation and benefit expense and professional fees, partially offset by a decrease in repairs and maintenance expenses and other operating expenses.

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

Total other income decreased $82.4 million primarily due to a decrease of $82.3 million in gain on the sale of leasing equipment in 2020.

Total other income increased $49.2 million primarily due to an increase of $49.3 million in gain on the sale of leasing equipment in 2021, an increase of $1.1 million in interest income and a decrease of $0.5 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss, partially offset by an increase of $1.7 million in other expenses.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA decreased $140.6 million primarily due to the changes noted above.

Jefferson Terminal Segment

The following table presents our results of operations:

Adjusted EBITDA increased $51.9 million primarily due to the changes noted above.

Jefferson Terminal

The following table presents our results of operations for our Jefferson Terminal segment:

Year Ended December 31, Change

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Crude marketing revenues — 8,210 166,134 (8,210) (157,924)

Other revenue — — 87 — (87)

Total revenues 46,352 60,283 204,348 (13,931) (144,065)

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Interest income — 22 118 (22) (96)

Other income 70 634 3,983 (564) (3,349)

Other (expense) income (4,726) 70 634 (4,796) (564)

Total other (expense) income (4,726) (4,640) 5,096 (86) (9,736)

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__________________________________________________

(1) Includes the following items for the years ended December 31, 2019 and 2018:

(i) net loss of $(349) and $(574) and (ii) depreciation and amortization expense of $1,005 and $1,052, respectively.

(1) Includes the following items for the year ended December 31, 2019:

(i) net loss of $(349) and (ii) depreciation and amortization expense of $1,005.

(2) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

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Comparison of the years ended December 31, 2021 and 2020

Total revenues decreased $144.1 million which primarily reflects (i) a decrease in crude marketing revenue of $157.9 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019, partially offset by (ii) an increase in terminal services of $15.0 million due to increased activity and storage capacity.

Total expenses decreased $179.0 million which reflects (i) a decrease in operating expenses of $178.4 million primarily due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019, (ii) a decrease in interest expense of $6.8 million due to the Jefferson Refinancing, partially offset by (iii) an increase in depreciation and amortization of $6.2 million due to additional assets placed into service.

Total revenues decreased $13.9 million which primarily reflects (i) a decrease in crude marketing revenue of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) a decrease in terminal services revenues of $6.2 million which reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19.

Total expenses increased $7.5 million which reflects:

• an increase in depreciation and amortization of $7.0 million due to additional assets placed into service;

• an increase in interest expense of $5.4 million due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement;

• a decrease in operating expenses of $4.8 million which primarily reflects (i) a decrease in cost of sales due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019, a portion of which was recognized in 2020, partially offset by (ii) higher insurance and other facility operating expenses.

Other (expense) income

Total other income decreased $9.7 million which primarily reflects (i) a loss on extinguishment of debt of $4.7 million due to the Jefferson Refinancing and (ii) a decrease in gains on sale of assets, net due to a $4.6 million gain recognized in 2019.

Other expense increased $4.8 million due to losses related to crude oil forward transactions.

Loss on extinguishment of debt decreased $4.7 million due to a debt refinancing in 2020.

See Note 10 to the consolidated financial statements for additional information.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA increased $22.3 million primarily due to the changes in net loss attributable to shareholders noted above.

Adjusted EBITDA decreased $5.5 million primarily due to the changes noted above.

Ports and Terminals

The following table presents our results of operations:

The following table presents our results of operations for our Ports and Terminals segment:

Year Ended December 31, Change

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Interest income 318 — 289 318 (289)

Other income — 1,809 — (1,809) 1,809

Other (expense) income (4,100) — 1,809 (4,100) (1,809)

Total other (expense) income (15,195) (3,222) 118,566 (11,973) (121,788)

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(1) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) net loss of $(3,222) and $(193), (ii) depreciation expense of $5,513 and $40, (iii) interest expense of $1,021 and $0, (iv) acquisition and transaction expense of $581 and $0 and (v) changes in fair value of non-hedge derivative instruments of $(589) and $0, respectively.

(i) net loss of $(11,430), $(3,222) and $(193), (ii) depreciation expense of $12,443, $5,513 and $40, (iii) interest expense of $5,513, $1,021 and $0, (iv) acquisition and transaction expense of $104, $581 and $0, (v) changes in fair value of non-hedge derivative instruments of $19,850, $(589) and $0, (vi) asset impairment of $2,146, $0 and $0 and (vii) equity-based compensation of $779, $0 and $0, respectively.

(2) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) equity-based compensation of $22, $9 and $7, (ii) interest expense of $46, $0 and $159 and (iii) depreciation expense of $52, $30 and $30, respectively.

(i) equity-based compensation of $28, $22 and $9, (ii) interest expense of $39, $46 and $0, (iii) depreciation expense of $312, $52 and $30 and (iv) changes in fair value of non-hedge derivative instruments of $(76), $0 and $0, respectively.

Comparison of the years ended December 31, 2021 and 2020

Total revenues decreased $18.3 million, primarily due to (i) the Long Ridge Transaction and (ii) a decrease of $3.9 million in butane sales at Repauno .

Total expenses decreased $32.1 million primarily due to decreases in (i) operating expenses of $14.5 million (ii) depreciation expense of $8.4 million related to the Long Ridge Transaction (iii) asset impairment of $4.7 million in 2019 at Long Ridge due to the expiration of unproved gas leases and (iv) acquisition and transaction expense of $4.1 million.

The decrease in operating expenses was primarily driven by lower:

• operating expenses of $12.7 million primarily due to the Long Ridge Transaction;

• cost of sales of $2.6 million related to the sale of butane at Repauno.

The decrease in operating expenses was offset by an increase in compensation and benefits of $1.1 million due to increased headcount.

Acquisition and transaction expense decreased due to transaction costs associated with the Long Ridge Transaction during 2019.

Total other income decreased $121.8 million primarily due to decreases in (i) gain on sale of $116.7 million from the Long Ridge Transaction in 2019 (ii) equity method income of $3.0 million from Long Ridge in 2020 and (iii) other income of $1.8 million due to unrealized gains on power swap derivatives, which was deconsolidated with the Long Ridge Transaction.

Total revenues increased $7.8 million, primarily due to (i) an increase in butane sales of $5.2 million at Repauno, (ii) a gain of $2.2 million on butane forward purchase contracts at Repauno and (iii) an increase of $0.4 million due to the commencement of transloading at Repauno .

Total expenses increased $10.5 million primarily due to:

• an increase in operating expenses of $4.1 million which primarily reflects increases in (i) property taxes due to new assets at Repauno, (ii) facility operating expenses due to higher butane volumes, (iii) compensation and benefits due to additional headcount at Repauno and (iv) professional fees;

• an increase in depreciation expense of $7.6 million due to assets being placed into service at Repauno;

• a decrease in acquisition and transaction expense of $0.9 million due to no acquisition transactions in 2021.

Other expense

Total other expense increased $12.0 million primarily due to increases in (i) other expense due to the write-off of an earn-out receivable of $4.1 million at Long Ridge and (ii) equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

Benefit from income taxes

The benefit from income taxes increased $2.0 million which primarily reflects a deferred tax benefit due to higher pre-tax losses in 2021.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA increased $24.0 million primarily due to (i) an increase in the Pro-rata share of Adjusted EBITDA from unconsolidated entities and (ii) the changes noted above.

On July 28, 2021, we completed the acquisition for 100% of the equity interests of Transtar from U.S.

Steel (“USS”) for total cash 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.

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

The following table presents our results of operations for our Transtar segment:

Year Ended December 31, Change

(in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19

Infrastructure revenues

Lease income $ 736 $ — $ — $ 736 $ —

Rail revenues 56,803 — — 56,803 —

Total revenues 57,539 — — 57,539 —

Operating expenses 28,987 — — 28,987 —

Acquisition and transaction expenses 2,841 — — 2,841 —

Depreciation and amortization 8,320 — — 8,320 —

Interest expense 53 — — 53 —

Total expenses 40,201 — — 40,201 —

Other expense

Other expense (423) — — (423) —

Total other expense (423) — — (423) —

Income before income taxes 16,915 — — 16,915 —

Provision for income taxes 1,602 — — 1,602 —

The provision for income taxes decreased $16.5 million which primarily reflects a deferred tax benefit due to pre-tax losses in 2020 compared to a gain in 2019 from the Long Ridge Transaction.

Net income 15,313 — — 15,313 —

Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — —

Net income attributable to shareholders $ 15,313 $ — $ — $ 15,313 $ —

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

Year Ended December 31, Change

(in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19

Net income attributable to shareholders $ 15,313 $ — $ — $ 15,313 $ —

Provision for income taxes 1,602 — — 1,602 —

Equity-based compensation expense — — — — —

Acquisition and transaction expenses 2,841 — — 2,841 —

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 8,320 — — 8,320 —

Interest expense 53 — — 53 —

Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — —

Equity in losses of unconsolidated entities — — — — —

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

Adjusted EBITDA (non-GAAP) $ 28,129 $ — $ — $ 28,129 $ —

Adjusted EBITDA decreased $117.4 million primarily due to the changes in net income (loss) attributable to shareholders noted above.

Financial results for the year ended December 31, 2021

Total revenues were $57.5 million, which primarily consists of switching, interline, and ancillary rail services.

Total expenses were $40.2 million, which primarily consists of (i) operating expenses of $29.0 million which primarily includes compensation and benefits of $19.0 million and facility operating expense of $7.0 million and (ii) depreciation and amortization of $8.3 million.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA was $28.1 million primarily due to the activity noted above.

Corporate and Other

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Lease income $ 10,131 $ 11,145 $ 9,796 $ (1,014) $ 1,349

Finance lease income — — 1,454 — (1,454)

Other revenue 4,030 5,578 2,851 (1,548) 2,727

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Loss before income taxes (221,204) (145,443) (142,953) (75,761) (2,490)

Provision for (benefit from) income taxes 420 — (93) 420 93

(Benefit from) provision for income taxes (75) 420 — (495) 420

Net loss (221,129) (145,863) (142,953) (75,266) (2,910)

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Net loss attributable to shareholders $ (245,887) $ (163,732) $ (144,791) $ (82,155) $ (18,941)

Provision for (benefit from) income taxes 420 — (93) 420 93

(Benefit from) provision for income taxes (75) 420 — (495) 420

Equity-based compensation expense — — — — —

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(1) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) net (loss) income of $(281), $(192) and $121, (ii) interest expense of $117, $131 and $477 and (iii) depreciation expense of $0, $0 and $26, respectively.

(i) net loss of $(409), $(281) and $(192) and (ii) interest expense of $99, $117 and $131, respectively.

Comparison of the years ended December 31, 2021 and 2020

Equipment leasing revenues increased $4.1 million primarily due to higher victualling income and lease income as our vessels were on-hire for longer in 2020 compared to 2019.

Infrastructure revenues increased $1.5 million due to higher volume in our railcar cleaning business.

Total expenses increased slightly due to higher (i) interest expense and (ii) operating expenses, partially offset by lower (iii) management fees and incentive allocation to affiliate and (iv) acquisition and transaction expenses.

Interest expense increased $9.8 million which reflects an increase in the average outstanding debt of approximately $190.1 million, which primarily consists of increases in (i) the 2027 Notes of $200.0 million and (ii) the 2025 Notes of $83.6 million, partially offset by decreases in (iii) the Revolving Credit Facility of $43.8 million, (iv) the FTAI Pride Credit Agreement of $38.4 million, which was repaid in full in March 2020 and (v) the 2022 Notes of $11.3 million.

Operating expenses increased $7.9 million which primarily reflects higher (i) charter costs of $4.2 million in our offshore energy business, (ii) repairs and maintenance of $1.6 million in our offshore energy business and (iii) compensation and benefits of $1.1 million in our railcar cleaning business due to higher volumes.

Acquisition and transaction expenses decreased $1.7 million primarily due to a higher volume of transactions in 2019.

Equipment leasing revenues decreased $2.6 million in our offshore business as one of our vessels was on hire longer in 2020 compared to 2021.

Total expenses increased $77.4 million due to higher (i) interest expense and (ii) acquisition and transaction expenses, partially offset by lower (iii) management fees and incentive allocation to affiliate.

Interest expense increased $67.6 million which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which was redeemed in full in May 2021.

Acquisition and transaction expenses increased $13.0 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

Management fees and incentive allocation to affiliate decreased $2.2 million which reflects a decrease in the base management fee as our average total equity was lower in 2021 compared to 2020.

Other (expense) income

Other income decreased $7.7 million primarily due to a loss on extinguishment of debt of $6.9 million due to the early repayment of $300 million of the 2022 Notes in December 2020.

Other expense decreased $3.9 million primarily due to a lower loss on extinguishment of debt of $3.7 million.

Adjusted EBITDA (non-GAAP)

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Liquidity and Capital Resources

On July 28, 2020, we issued $400 million aggregate principal amount of 2027 Notes.

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

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

During the third quarter of 2020, we sold 1,070,000 ATM Shares for net proceeds of approximately $20.6 million.

On December 23, 2020, we issued an additional $400 million aggregate principal amount of 2025 Notes.

We used a portion of the proceeds to repay $300 million of outstanding 2022 Notes through the Tender Offer and $50 million of outstanding borrowings under the Revolving Credit Facility, and intend to use the remaining proceeds for general corporate purposes, and the funding of future acquisitions and investments, including aviation investments.

Following the repayment, we have additional borrowing capacity of $250 million under the Revolving Credit Facility.

In April 2021, we issued $500 million aggregate principal amount of senior unsecured notes due 2028 (see Note 10 to the consolidated financial statements).

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

In July 2021, we entered into a senior unsecured bridge term loan facility (the “Bridge Loans”) in an aggregate principal amount of $650 million in order to finance the acquisition of Transtar, which closed on July 28, 2021.

We issued new equity and debt in September 2021, as described below, and repaid in full the Bridge Loans.

In August 2021, Jefferson issued $425 million aggregate principal amount of Series 2021 Bonds (see Note 10 to the consolidated financial statements).

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

In September 2021, we issued 12,000,000 common shares and received net proceeds of approximately $291.7 million after deducting underwriting discounts and offering expenses (see Note 20 to the consolidated financial statements).

The proceeds were used to repay a portion of the Bridge Loans.

Additionally, in October 2021, the underwriters exercised an option to purchase an additional 1,283,863 common shares and we received net proceeds of approximately $31 million.

In September 2021, we issued an additional $500 million aggregate principal amount of the Senior Notes due 2028 (see Note 10 to the consolidated financial statements).

We used a portion of the net proceeds to repay in full the Bridge Loans.

In December 2021, we entered into an agreement for senior secured bridge term loans (“2021 Bridge Loans”) in an aggregate principal amount of $350 million, which we used to finance or refinance certain assets.

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

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

• Cash used for the purpose of making investments was $597.5 million, $942.5 million, and $751.5 million during the years ended December 31, 2020, 2019, and 2018, respectively.

• Cash used for the purpose of making investments was $1.5 billion, $597.5 million and $942.5 million during the years ended December 31, 2021, 2020, and 2019, respectively.

• Distributions to shareholders, including cash dividends, were $142.8 million, $131.4 million and $115.4 million during the years ended December 31, 2021, 2020 and 2019, respectively.

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• Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $16.9 million, $110.3 million and $229.7 million during the years ended December 31, 2021, 2020, and 2019, respectively.

• During the year ended December 31, 2020, additional borrowings were obtained in connection with the (i) 2025 Notes of $407.0 million, (ii) 2027 Notes of $400.0 million, (iii) Revolving Credit Facility of $270.0 million and (iv) Series 2020 Bonds (as defined in Note 9) of $264.0 million.

We made principal payments of $852.2 million related to the 2022 Notes, Revolving Credit Facility, Series 2016 Bonds, Jefferson Revolver, Series 2012 Bonds and FTAI Pride Credit Agreement.

During the year ended December 31, 2019, additional borrowings were obtained in connection with (i) the Revolving Credit Facility of $250.0 million, (ii) LREG Credit Agreement of $173.5 million, (iii) the 2025 Notes of $148.7 million, (iv) the 2022 Notes of $147.8 million, (v) the DRP Revolver of $25.0 million, (vi) the Jefferson Revolver of $23.2 million and (vii) CMQR Credit Agreement of $20.9 million.

• During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1.0 billion, (ii) Revolving Credit Facility of $690.0 million, (iii) Bridge Loan Agreement of $650.0 million, (iv)

Series 2021 Bonds of $425.0 million, (v) 2021 Bridge Loans of $100.5 million and (vi) EB-5 Loan Agreement of $26.1 million.

We made principal payments of $1.6 billion related to the Bridge Loan Agreement, Revolving Credit Facility and Senior Notes due 2022.

During the year ended December 31, 2020, additional borrowings were obtained in connection with the (i) Senior Notes due 2025 of $407.0 million, (ii) Senior Notes due 2027 of $400.0 million, (iii) Revolving Credit Facility of $270.0 million and (iv) Series 2020 Bonds of $264.0 million.

We made principal payments of $852.2 million related to the Senior Notes due 2022, Revolving Credit Facility, Series 2016 Bonds, Jefferson Revolver, Series 2012 Bonds and FTAI Pride Credit Agreement.

During the year ended December 31, 2019, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $250.0 million, (ii) LREG Credit Agreement of $173.5 million, (iii) Senior Notes due 2025 of $148.7 million, (iv) Senior Notes due 2022 of $147.8 million, (v) DRP Revolver of $25.0 million, (vi) Jefferson Revolver of $23.2 million and (vii) CMQR Credit Agreement of $20.9 million.

We made principal payments of $405.1 million primarily related to the Revolving Credit Facility, Jefferson Revolver and CMQR Credit Agreement.

During the year ended December 31, 2018, additional borrowings were obtained in connection with (i) the 2025 Notes of $291.0 million, (ii) the Revolving Credit Facility of $275.0 million, (iii) the 2022 Notes of $100.0 million, (iv) the Jefferson Revolver of $49.5 million and (v) the CMQR Credit Agreement of $35.5 million.

We made principal payments of $218.8 million primarily related to the Revolving Credit Facility and the CMQR Credit Agreement.

• Proceeds from the sale of subsidiaries and assets were $163.4 million, $72.2 million and $432.3 million during the years ended December 31, 2021, 2020, and 2019, respectively.

• Proceeds from the issuance of common shares were $148.3 million, net of issuance costs of $0.8 million, during the year ended December 31, 2018.

• Proceeds from the issuance of common shares, net of issuance costs were $323.1 million during the year ended December 31, 2021.

There were no issuances of common shares in 2020 or 2019.

• Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $19.7 million and $194.0 million during the years ended December 31, 2020 and 2019, respectively.

• Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $101.2 million, $19.7 million and $194.0 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Our net cash provided by operating activities has been less than the amount of distributions to our shareholders.

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Cash flow data:

Net cash provided by operating activities $ 63,106 $ 151,043 $ 133,697

Net cash (used in) provided by operating activities $ (22,044) $ 63,106 $ 151,043

Net cash used in investing activities (1,286,958) (509,123) (495,236)

1 unchanged sentence

Comparison of the years ended December 31, 2021 and 2020

Net cash provided by operating activities decreased $87.9 million, which primarily reflects (i) a decrease in net income of $311.5 million and (ii) changes in management fees payable to affiliate, accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $83.6 million, partially offset by (iii) a change in gain on sale of subsidiaries and assets of $279.7 million and (iv) a change in security deposits and maintenance claims included in earnings of $14.0 million

Net cash used in investing activities increased $13.9 million primarily due to (i) a decrease in proceeds from the sale of subsidiaries of $183.8 million and (ii) a decrease in proceeds from the sale of leasing equipment of $176.3 million, partially offset by (iii) an decrease in acquisitions of leasing equipment of $247.0 million, (iv) a decrease in acquisitions of property, plant and equipment of $66.3 million and (v) a decrease in the acquisition of the remaining interest in a JV investment of $28.8 million.

Net cash provided by financing activities decreased $101.0 million primarily due to (i) an increase in repayments of debt of $447.1 million, (ii) a decrease in proceeds from the issuance of preferred shares, net of $174.3 million and (iii) a decrease in receipt of maintenance deposits of $31.9 million, partially offset by (iv) an increase in proceeds from debt of $552.2 million.

Net cash used in operating activities increased $85.2 million, which primarily reflects (i) an increase in net loss of $27.0 million, primarily due to higher interest expense and operating expenses, partially offset by higher revenue and (ii) certain adjustments to reconcile net loss to cash used in operating activities including, gain on sale of assets, net of $49.3 million, security deposits and maintenance claims included in earnings of $32.7 million, depreciation and amortization of $29.4 million and asset impairment of $23.5 million.

Net cash used in investing activities increased $777.8 million primarily due to (i) the acquisition of Transtar, net of cash acquired of $627.1 million, (ii) an increase in acquisitions of leasing equipment of $251.0 million and (iii) an increase in investment in unconsolidated entities of $50.0 million, partially offset by (iv) a decrease in acquisitions of property, plant and equipment of $107.5 million and (v) an increase in proceeds from the sale of leasing equipment of $86.8 million.

Net cash provided by financing activities increased $1.2 billion primarily due to (i) an increase in proceeds from debt of $1.6 billion, (ii) an increase in proceeds from the issuance of common shares, net of $323.1 million and (iii) an increase in proceeds from the issuance of preferred shares, net of $81.5 million, partially offset by (iv) an increase in repayments of debt of $701.0 million.

Funds Available for Distribution (non-GAAP)

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We believe FAD is a useful metric for investors and analysts for similar purposes.

FAD is not a financial measure in accordance with GAAP.

The GAAP measure most directly comparable to FAD is net cash provided by operating activities.

FAD is not a financial measure in accordance with U.S.

GAAP measure most directly comparable to FAD is net cash provided by operating activities.

We define FAD as:

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(in thousands) 2021 2020 2019

Net cash provided by operating activities

Net cash (used in) provided by operating activities

$ (22,044) $ 63,106 $ 151,043

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Return of capital distributions from unconsolidated entities

— 1,555 2,085

Required payments on debt obligations (1)

— (36,559) (7,793)

Capital distributions to non-controlling interest

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_____________________________________________________

(1) Required payments on debt obligations for the year ended December 31, 2020 exclude repayments of $306,206 for the 2022 Notes, $270,000 for the Revolving Credit Facility, $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement, and for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit Facility and $18,572 for the CMQR Credit Agreement, and for the year ended December 31, 2018 exclude repayments of $175,000 for the Revolving Credit Facility and $36,026 for the CMQR Credit Agreement, all of which were voluntary refinancings as repayments of these amounts were not required at such time.

(1) Required payments on debt obligations for the year ended December 31, 2021 exclude repayments of $650,000 for the Bridge Loan Agreement, $500,527 for the Revolving Credit Facility and $402,704 for the Senior Notes due 2022, and for the year ended December 31, 2020 exclude repayments of $306,206 for the Senior Notes due 2022, $270,000 for the Revolving Credit Facility, $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement, and for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit Facility and $18,572 for the CMQR Credit Agreement, all of which were voluntary refinancings as repayments of these amounts were not required at such time.

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

FAD has material limitations as a liquidity measure because such measure excludes items that are required elements of our net cash provided by operating activities as described below.

FAD should not be considered in isolation nor as a substitute for analysis of our results of operations under GAAP, and it is not the only metric that should be considered in evaluating our ability to meet our stated dividend policy.

FAD should not be considered in isolation nor as a substitute for analysis of our results of operations under U.S.

GAAP, and it is not the only metric that should be considered in evaluating our ability to meet our stated dividend policy.

Specifically:

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If such factors were included in FAD, there can be no assurance that the results would be consistent with our presentation of FAD.

Debt Obligations

See Note 9 to the consolidated financial statements for information related to our debt obligations.

Contractual Obligations

The following table summarizes our future obligations, by period due, as of December 31, 2020, under our various contractual obligations and commitments.

We had no off-balance sheet arrangements as of December 31, 2020.

Payments Due by Period

(in thousands) Total 2021 2022 2023 2024 2025 Thereafter

DRP Revolver $ 25,000 $ 25,000 $ — $ — $ — $ — $ —

Revolving Credit Facility — — — — — — —

Series 2020 Bonds 263,980 — — — — 79,060 184,920

Senior Notes due 2022 400,000 — 400,000 — — — —

Senior Notes due 2025 850,000 — — — — 850,000 —

Senior Notes due 2027 400,000 — — — — — 400,000

Total principal payments on loans and bonds payable

1,938,980 25,000 400,000 — — 929,060 584,920

Total estimated interest payments (1)

717,439 133,693 111,815 106,190 106,190 91,279 168,272

Operating lease obligations 168,323 4,759 4,632 4,585 4,354 4,224 145,769

885,762 138,452 116,447 110,775 110,544 95,503 314,041

Total contractual obligations $ 2,824,742 $ 163,452 $ 516,447 $ 110,775 $ 110,544 $ 1,024,563 $ 898,961

______________________________________________________________________________________

(1) Estimated interest payments based on rates as of December 31, 2020.

Contractual Obligations and Cash Requirements

Our material cash requirements include the following contractual and other obligations:

Debt Obligations — As of December 31, 2021, we had outstanding principal and interest payment obligations of $3.3 billion and $1.2 billion, respectively, of which, $100.5 million and $185.4 million, respectively, are due in the next twelve months.

See Note 10 to the consolidated financial statements for additional information about our debt obligations.

Lease Obligations — As of December 31, 2021, we had outstanding operating and finance lease obligations of $182.2 million, of which, $10.7 million is due in the next twelve months.

Other Obligations — As of December 31, 2021, in connection with a pipeline capacity agreement at Jefferson Terminal, we had an obligation to pay a minimum of $10.2 million in marketing fees in the next twelve months.

Other Cash Requirements — In addition to our contractual obligations, we pay quarterly cash dividends on our common shares and preferred shares, which are subject to change at the discretion of our Board of Directors.

During 2021, we declared cash dividends of $118.0 million and $24.8 million on our common shares and preferred shares, respectively.

We expect to meet our future short-term liquidity requirements through cash on hand and net cash provided by our current operations.

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Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required.

Application of Critical Accounting Policies

Critical Accounting Estimates and Policies

The preparation of financial statements in conformity with U.S.

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.

Note 2 to the consolidated financial statements describes the significant accounting policies and methods used in the preparation of our consolidated financial statements.

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

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Asset Range of Estimated Useful Lives Residual Value Estimates

Aircraft 25 years from date of manufacture Generally not to exceed 15% of manufacturer’s list price when new

Aircraft engines 2 - 6 years, based on maintenance adjusted service life Sum of engine core salvage value plus the estimated fair value of life limited parts

Offshore energy vessels 25 years from date of manufacture 10% of new build cost

Railcars 40 - 50 years from date of manufacture Scrap value at end of useful life

Track and track related assets 15 - 50 years from date of manufacture Scrap value at end of useful life

Buildings and site improvements 20 - 30 years Scrap value at end of useful life

Railroad equipment 3 - 15 years from date of manufacture Scrap value at end of useful life

Terminal machinery and equipment 15 - 25 years from date of manufacture Scrap value at end of useful life

Vehicles 5 - 7 years from date of manufacture Scrap value at end of useful life

Furniture and fixtures 3 - 6 years from date of purchase None

Computer hardware and software 3 - 5 years from date of purchase None

Aircraft 25 years from date of manufacture

Generally not to exceed 15% of manufacturer’s list price when new

Aircraft engines 2 - 6 years, based on maintenance adjusted service life

Sum of engine core salvage value plus the estimated fair value of life limited parts

Offshore energy vessels 25 years from date of manufacture

10% of new build cost

Railcars and locomotives 1 - 50 years from date of manufacture