What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-28 compared with 2021-02-26 · 551 added, 372 removed, 1266 unchanged (42% of the section changed)

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Consolidated Financial Statements of Fortress Transportation and Infrastructure Investors LLC:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2021 and 2020

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Fortress Transportation and Infrastructure Investors LLC (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Fortress Transportation and Infrastructure Investors LLC (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive (loss) income, changes in equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

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Auditing the fair value of the Jefferson Terminal reporting unit used in the annual goodwill impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the Jefferson Terminal reporting unit.

In particular, the fair value estimate was sensitive to significant assumptions such as the extent and timing of future cash flows (including forecasted revenue growth rates and EBITDA margins), capital expenditures and discount rate, which are affected by expectations about the Company’s ability to secure additional contracts and increase volumes from existing contracts as well as expectations about the overall industry, market and economic conditions.

In particular, the fair value estimate was sensitive to significant assumptions such as the forecasted revenue growth rates, EBITDA margins, capital expenditures, the timing of future cash flows and discount rate, which are affected by expectations about the Company’s ability to secure additional contracts and increase volumes from existing contracts as well as expectations about the overall industry, market and economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including tests of controls over management’s review of valuation methodology and significant assumptions described above.

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In particular, such estimates are sensitive to significant assumptions such as the mean time between removal (MTBR) and forecasted utilization of the aircraft which are affected by historical usage patterns and overall industry, market and economic conditions.

Changes to these significant assumptions could have a material effect on the amount of revenue recognized in the period.

Changes to these significant assumptions could have a material effect on the amount of maintenance revenue recognized in the period.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s maintenance revenue recognition process, including controls over management’s review of the significant assumptions used in determining the estimated timing of major maintenance events as described above.

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We also performed a sensitivity analysis on utilization of the aircraft to evaluate the changes in the timing of the maintenance events from changes in utilization assumptions and the impact, if any, on maintenance revenue recognized in the period.

Accounting for the Acquisition of Transtar, LLC

Description of the Matter On July 28, 2021, the Company completed its acquisition of Transtar, LLC for a total cash consideration of $636.0 million.

As disclosed in Note 4 to the consolidated financial statements, the transaction was accounted for as a business combination, and as such, the purchase price was attributed to the assets acquired and liabilities assumed based on their fair values at the date of acquisition, including property, plant and equipment and customer relationship intangible assets.

Auditing the Company’s accounting for its acquisition of Transtar, LLC was significant to our audit due to the higher extent of audit effort, significant estimation and the judgmental nature of the inputs used to determine the fair value of property, plant and equipment and the customer relationship intangible assets, which are inherently uncertain and generally unobservable, requiring the involvement of valuation specialists.

The significant assumptions used to estimate the fair value of the property, plant and equipment included replacement cost estimates, salvage values and market data for similar assets where available.

The significant assumptions used to estimate the value of the customer relationship intangible assets included discount rate and future revenues and operating expenses.

When estimating the significant assumptions to be used in the valuation of the property, plant and equipment and customer relationship intangible assets, the Company included consideration of current industry information, market and economic trends, and historical results of the acquired business.

These significant assumptions are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s valuation of the property, plant and equipment and customer relationship intangible assets, including tests of controls over management’s review of the valuation methodologies and the related assumptions described above.

To test the estimated fair value of the property, plant, and equipment and customer relationship intangible assets, our audit procedures included, among others assessing the valuation methodologies, testing the models, evaluating significant assumptions used as described above, and testing the completeness and accuracy of the underlying data used by the Company.

For example, we compared the significant assumptions used by management to the historical results of the acquired business as well as to current industry and economic trends.

We performed sensitivity analyses of significant assumptions to evaluate the change in the fair values of the customer relationship intangible assets resulting from changes in the assumptions.

In addition, we involved valuation specialists to assist in evaluating the methodologies used and the significant assumptions applied in developing the fair value estimates of property, plant and equipment and customer relationship intangible assets.

/s/ Ernst & Young LLP

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Additional paid in capital 1,411,940 1,130,106

(Accumulated deficit) retained earnings ( 28,158 ) 190,453

Accumulated other comprehensive (loss) income ( 26,237 ) 372

Accumulated deficit ( 132,392 ) ( 28,158 )

Accumulated other comprehensive loss ( 156,381 ) ( 26,237 )

Shareholders' equity 1,124,292 1,076,658

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Equity in losses of unconsolidated entities 8 ( 12,734 ) ( 5,039 ) ( 2,375 )

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

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

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

Interest income 1,711 162 531

Other income 70 3,445 3,983

Total other (expense) income ( 16,782 ) 204,851 7,374

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

Total other income (expense) 23,826 ( 16,782 ) 204,851

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

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( 129,820 ) ( 26,609 ) 372

Changes in pension and other employee benefit accounts ( 324 ) — —

Comprehensive (loss) income ( 260,850 ) ( 130,301 ) 208,156

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__________________________________________________

(1) Net of deferred tax (benefit) expense of $( 7,075 ) and $ 99 for the years ended December 31, 2020 and 2019.

(1) Net of deferred tax (benefit) expense of $( 2,187 ), $( 7,075 ) and $ 99 for the years ended December 31, 2021, 2020 and 2019, respectively.

See accompanying notes to consolidated financial statements.

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Total comprehensive income (loss) 225,108 372 ( 17,324 ) 208,156

Purchase of non-controlling interest 7,225 ( 10,930 ) ( 3,705 )

Settlement of equity-based compensation ( 10,483 ) ( 10,483 )

Issuance of common shares 9 384 — 393

Conversion of participating securities ( 8 ) ( 8 )

Dividends declared - common shares ( 113,541 ) — ( 113,541 )

Issuance of preferred shares 81 193,911 193,992

Dividends declared - preferred shares ( 1,838 ) ( 1,838 )

Equity-based compensation 8,404 8,404

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

Net income (loss) 225,108 ( 17,324 ) 207,784

Other comprehensive income — 372 — 372

Total comprehensive income (loss) 225,108 372 ( 17,324 ) 208,156

Net loss ( 87,170 ) ( 16,522 ) ( 103,692 )

Other comprehensive loss — ( 26,609 ) — ( 26,609 )

Total comprehensive loss ( 87,170 ) ( 26,609 ) ( 16,522 ) ( 130,301 )

Settlement of equity-based compensation ( 120 ) ( 120 )

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Issuance of common shares 136 323,443 323,579

Conversion of participating securities ( 7 ) ( 7 )

Dividends declared - common shares ( 118,009 ) ( 118,009 )

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Net (loss) income $ ( 130,706 ) $ ( 103,692 ) $ 207,784

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

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

Equity in losses of unconsolidated entities 12,734 5,039 2,375

Gain on sale of subsidiaries — ( 1,331 ) ( 198,764 )

Loss (gain) on sale of assets, net 308 ( 81,954 ) ( 3,911 )

(Gain) loss on sale of assets, net ( 49,031 ) 308 ( 81,954 )

Security deposits and maintenance claims included in earnings ( 39,067 ) ( 6,362 ) ( 20,385 )

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Other liabilities 118 ( 6,360 ) ( 14,837 )

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

Cash flows from investing activities:

Investment in notes receivable — — ( 912 )

Investment in unconsolidated entities and available for sale securities ( 4,690 ) ( 13,500 ) ( 1,115 )

Investment in unconsolidated entities ( 54,655 ) ( 4,690 ) ( 13,500 )

Principal collections on finance leases 7,387 13,823 13,398

Acquisition of business, net of cash acquired ( 627,090 ) — —

Acquisition of leasing equipment ( 572,624 ) ( 321,606 ) ( 568,569 )

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Acquisition of lease intangibles ( 24,017 ) 1,997 606

Investment in convertible promissory notes ( 10,000 ) — —

Acquisition of remaining interest in JV investment — — ( 28,828 )

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Proceeds from sale of property, plant and equipment 4,494 — —

Proceeds from deposit on sale of leasing equipment — — 240

Return of deposit on sale of leasing equipment 2,350 — ( 400 )

Receipt of deposits for sale of aircraft and engine 600 — —

Return of purchase deposits 1,010 2,350 —

Return of capital distributions from unconsolidated entities — — 1,555

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Proceeds from issuance of common shares, net of underwriter's discount 323,124 — —

Common shares issuance costs — — ( 820 )

Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 101,200 19,694 193,992

Settlement of equity-based compensation ( 421 ) ( 120 ) ( 8,078 )

Purchase of non-controlling interest shares — — ( 3,705 )

Cash dividends - common shares ( 118,009 ) ( 113,572 ) ( 113,541 )

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Net cash provided by financing activities 1,587,645 364,918 465,873

Net (decrease) increase in cash and cash equivalents and restricted cash ( 81,099 ) 121,680 28,031

Net increase (decrease) in cash and cash equivalents and restricted cash 278,643 ( 81,099 ) 121,680

Cash and cash equivalents and restricted cash, beginning of period 161,418 242,517 120,837

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Supplemental disclosure of non-cash investing and financing activities:

Proceeds from borrowings of debt $ — $ — $ 511

Repayment and settlement of debt $ — $ — $ ( 24,250 )

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Deferred financing costs — — ( 1,161 )

Equity compensation to non-controlling interest — — 892

Change in fair value of pension and other retirement benefit liabilities ( 237 ) — —

Change in fair value of cash flow hedge — — 372

Non-cash change in equity method investment ( 129,907 ) ( 26,609 ) —

Transfer of non-controlling interest — — 7,225

Issuance of common shares 455 304 385

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(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, a new multipurpose dock, a rail-to-ship transloading system 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 in operation (“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

Basis of Accounting —The accompanying consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) and include both our accounts and those of our subsidiaries.

generally accepted accounting principles (“U.S.

GAAP”) and include both our accounts and those of our subsidiaries.

Principles of Consolidation — We consolidate all entities in which we have a controlling financial interest and control over significant operating decisions, as well as variable interest entities (“VIEs”) in which we are the primary beneficiary.

All significant intercompany transactions and balances have been eliminated.

All intercompany transactions and balances have been eliminated.

The ownership interest of other investors in consolidated subsidiaries is recorded as non-controlling interest.

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Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities as well as the proportionate interest in adjustments to other comprehensive income (loss).

Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Use of Estimates — 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.

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We concluded that we are the primary beneficiary and, accordingly, DRP has been presented on a consolidated basis in the accompanying financial statements.

Cash and Cash Equivalents — We consider all highly liquid short-term investments with a maturity of 90 days or less when purchased to be cash equivalents.

Restricted Cash —Restricted cash consists of prepaid interest and principal pursuant to the requirements of certain of our debt agreements (see Note 9) and other qualifying constructions projects at Jefferson Terminal.

Total VIE assets of DRP were $ 316.5 million and $ 273.6 million, and total VIE liabilities of DRP were $ 32.6 million and $ 32.2 million as of December 31, 2021 and 2020, respectively.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

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 constructions projects at Jefferson Terminal.

Inventory —We hold aircraft engine modules, spare parts and used material inventory for trading and to support operations within our Aviation Leasing segment.

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10% of new build cost

Railcars 40 - 50 years from date of manufacture

Railcars and locomotives 1 - 50 years from date of manufacture

Scrap value at end of useful life

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Scrap value at end of useful life

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

Bridges and tunnels 15 - 55 years

Scrap value at end of useful life

Buildings and site improvements 3 - 30 years

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Computer hardware and software 2 - 5 years from date of purchase

Construction in progress N/A N/A

Major improvements and modifications incurred in connection with the acquisition of property, plant and equipment and leasing equipment that are required to get the asset ready for initial service are capitalized and depreciated over the remaining life of the asset.

Project costs of major additions and betterments, including pre-construction costs and other costs directly related to the development or construction of project, are capitalized and depreciation commences once it is placed into service.

Project costs of major additions and betterments, including capitalizable engineering costs and other costs directly related to the development or construction of project, are capitalized and depreciation commences once it is placed into service.

Interest costs directly related to and incurred during the construction period of property, plant and equipment are capitalized.

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In making these estimates, we rely upon observable market data for the same or similar types of equipment and, in the case of aviation equipment, our own estimates with respect to a lessee’s anticipated utilization of the aircraft or engine.

During the fourth quarter of 2020, we changed the estimated useful lives and residual values of certain aircraft engines based on observable market data.

This change in estimate resulted in additional depreciation expense of $ 3.8 million during the quarter and will increase annual depreciation expense by approximately $ 1.6 million.

When we acquire leasing equipment subject to an in-place lease, determining the fair value of the in-place lease requires us to make assumptions regarding the current fair values of leases for identical or similar equipment, in order to determine if the in-place lease is within a fair value range of current lease rates.

If a lease is below or above the range of current lease rates, the resulting lease discount or premium is recognized as a lease intangible and amortized into lease income over the remaining term of the lease.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

We, through our equity method investment in Long Ridge, have a working interest in various natural gas reserves located in southeastern Ohio.

Our interest in this natural gas joint venture is consolidated on a proportionate basis in accordance with Accounting Standards Codification (“ASC”) Topic 932 Extractive Activities – Oil and Gas .

Our interest in this natural gas joint venture is consolidated on a proportionate basis by Long Ridge in accordance with Accounting Standards Codification (“ASC”) Topic 932 Extractive Activities – Oil and Gas .

We follow the successful efforts method of accounting for costs incurred in oil and gas producing activities.

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significant traffic decline;

a significant change in market conditions;

or the introduction of newer technology aircraft, vessels, engines or railcars.

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Lease Incentives and Amortization —Lease incentives, which include lease acquisition costs related to reconfiguration of the aircraft cabin, other lessee specific modifications and other direct costs, are capitalized and amortized as a reduction of lease income over the primary term of the lease, assuming no lease renewals.

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

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

The carrying amount of goodwill was approximately $ 257.1 million and $ 122.7 million as of December 31, 2021 and 2020, respectively.

The goodwill amounts as of December 31, 2020 related to the Jefferson reporting unit.

The increase in 2021 reflects our acquisition of Transtar.

See Note 4 for additional information.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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The determination of fair value involves significant management judgment.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

For an annual goodwill impairment assessment, an optional qualitative analysis may be performed.

If the option is not elected or if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a two-step goodwill impairment test is performed to identify potential goodwill impairment and measure an impairment loss.

If the option is not elected or if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a goodwill impairment test is performed to identify potential goodwill impairment and measure an impairment loss.

A qualitative analysis was not elected for the years ended December 31, 2021 or 2020.

Beginning in 2020, we adopted new guidance regarding the testing and recognition of a goodwill impairment, which prior to 2020 required two steps.

A goodwill impairment assessment compares the fair value of a respective reporting unit with its carrying amount, including goodwill.

A goodwill impairment assessment compares the fair value of the respective reporting unit with its carrying amount, including goodwill.

The estimate of fair value of the respective reporting unit is based on the best information available as of the date of assessment, which primarily incorporates certain factors including our assumptions about operating results, business plans, income projections, anticipated future cash flows and market data.

If the estimated fair value of the reporting unit is less than the carrying amount, a goodwill impairment is recorded to the extent of any goodwill recorded in the reporting unit.

We estimate the fair value of the reporting units using an income approach, specifically a discounted cash flow analysis.

This analysis requires us to make significant assumptions and estimates about the extent and timing of future cash flows (including forecasted revenue growth rates and EBITDA margins), capital expenditures and discount rates.

If the estimated fair value of the reporting unit is less than the carrying amount, a goodwill impairment is recorded to the extent that the carrying value of the reporting unit exceeds its fair value.

We estimate the fair value of the Jefferson and Transtar reporting units using an income approach, specifically a discounted cash flow analysis.

This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, capital expenditures, the timing of future cash flows, and discount rates.

The estimates and assumptions used consider historical performance if indicative of future performance and are consistent with the assumptions used in determining future profit plans for the reporting units.

Although we believe the estimates of fair value are reasonable, the determination of certain valuation inputs is subject to management’s judgment.

In connection with our impairment analysis, although we believe the estimates of fair value are reasonable, the determination of certain valuation inputs is subject to management's judgment.

Changes in these inputs, including as a result of events beyond our control, could materially affect the results of the impairment review.

If the forecasted cash flows of the Jefferson Terminal reporting unit or other key inputs are negatively revised in the future, the estimated fair value of the Jefferson Terminal reporting unit could be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results.

The Jefferson Terminal segment forecasted revenue is dependent on the ramp up of volumes under current and expected future contracts for storage of heavy and light crude and refined products during 2021 and beyond subject to obtaining rail capacity for crude, expansion of refined product distribution to Mexico and movements in future oil spreads.

Jefferson Terminal was designed to reach a storage capacity of 21.7 million barrels, and 4.4 million of storage, or approximately 20.3 % of capacity, is currently operational.

If the Company strategy changes from planned capacity downward due to an inability to source contracts or expand volumes, the fair value of the reporting units would be negatively affected, which could lead to an impairment.

If the forecasted cash flows or other key inputs are negatively revised in the future, the estimated fair value of the reporting unit could be adversely impacted, potentially leading to an impairment in the future that could materially affect our operating results.

Due to the acquisition of Transtar in the current year, the estimated fair value of that reporting unit approximates the book value.

The Jefferson reporting unit had an estimated fair value that exceeded its carrying value by less than 20%.

The Jefferson Terminal segment forecasted revenue is dependent on the ramp up of volumes under current and expected future contracts for storage and throughput of heavy and light crude and refined products and is subject to obtaining rail capacity for crude, expansion of refined product distribution to Mexico and movements in future oil spreads.

At October 31, 2021, approximately 4.3 million barrels of storage was currently operational with 1.9 million barrels currently under construction for new contracts which will complete our storage development for our main terminal.

Our discount rate for our 2021 goodwill impairment analysis was 9.0 % and our assumed terminal growth rate was 2.0 %.

If our strategy changes from planned capacity downward due to an inability to source contracts or expand volumes, the fair value of the reporting unit would be negatively affected, which could lead to an impairment.

The expansion of refineries in the Beaumont/Port Arthur area, as well as growing crude oil production in the U.S.

and Canada, are expected to result in increased demand for storage on the U.S.

Although we do not have significant direct exposure to volatility of crude oil prices, changes in crude oil pricing that effect long term refining planned output could impact Jefferson Terminal operations.

Other assumptions utilized in our annual impairment analysis that are significant in determination of the fair value of the reporting unit include the discount rate utilized in our discounted cash flow analysis of 13.5 % and our terminal growth rate of 2 %.

Furthermore, both inbound and outbound pipelines projects are becoming fully operational early in 2021 to and from the Jefferson Terminal and will affect our forecasted growth and therefore our estimated fair value.

We expect the Jefferson Terminal segment to continue to generate positive Adjusted EBITDA during 2021.

Although we do not have significant direct exposure to volatility of crude oil prices, changes in crude oil pricing that affect long term refining planned output could impact Jefferson Terminal operations.

We expect the Jefferson Terminal segment to continue to generate positive Adjusted EBITDA in future years.

Although certain of our anticipated contracts or expected volumes from existing contracts for Jefferson Terminal have been delayed, we continue to believe our projected revenues are achievable.

Further delays in executing these contracts or achieving our projections could adversely affect the fair value of the reporting unit.

The impact of the COVID-19 global pandemic during 2020 certainly negatively affected refining volumes and therefore Jefferson Terminal crude throughput but we anticipate the impact to normalize over 2021 and ramp back to normal by 2022.

Furthermore, we anticipate strengthening macroeconomic demand for storage and the increasing spread between Western Canadian Crude and Western Texas Intermediate as Canadian crude pipeline apportionment increases and our pipeline connections become fully operational during 2021, we remain positive for the outlook of Jefferson Terminal’s earnings potential.

The impact of the COVID-19 global pandemic during 2020 and 2021 negatively affected refining volumes and therefore Jefferson Terminal crude throughput but we have seen the activity starting to normalize and are expected to ramp back to normal during 2022.

Also, as our pipeline connections became fully operational during 2021, we remain positive for the outlook of Jefferson Terminal's earnings potential.

There were no impairments of goodwill for the years ended December 31, 2021, 2020, and 2019.

Intangibles and amortization — Intangibles include the value of acquired favorable and unfavorable leases and existing customer relationships acquired in connection with the acquisition of Jefferson Terminal.

In accounting for acquired leasing equipment, we make estimates about the fair value of the acquired leases.

In determining the fair value of these leases, we make assumptions regarding the current fair values of leases for identical or similar equipment in order to determine if the acquired lease is within a fair value range of current lease rates.

If a lease is below or above the range of current lease rates, the resulting lease discount or premium is recognized as a lease intangible and amortized into rental income over the remaining term of the lease.

Acquired lease intangibles are amortized on a straight-line basis over the remaining lease terms, which collectively had a weighted-average remaining amortization period of approximately 61 months as of December 31, 2021, and are recorded as a component of equipment leasing revenues in the accompanying Consolidated Statements of Operations.

Customer relationship intangible assets are amortized on a straight-line basis over their useful lives as the pattern in which the asset’s economic benefits are consumed cannot reliably be determined.

Customer relationship intangible assets have useful lives ranging from 5 to 10 years, no estimated residual value, and amortization is recorded as a component of Depreciation and amortization in the Consolidated Statements of Operations.

The weighted-average remaining amortization period was approximately 43 months as of December 31, 2020.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

Customer relationship intangible assets have useful lives ranging from 5 to 15 years, no estimated residual value, and amortization is recorded as a component of Depreciation and amortization in the Consolidated Statements of Operations.

The weighted-average remaining amortization period was approximately 154 months as of December 31, 2021.

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.

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Equipment Leasing Revenues

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

Operating Leases — We lease equipment pursuant to operating leases.

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

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

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

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

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

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

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

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

The fair value of the lease may include a lease premium or discount which is recorded as a favorable or unfavorable lease intangible.

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.

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Finance Leases —From time to time we enter into finance lease arrangements that include a lessee obligation to purchase the leased equipment at the end of the lease term, a bargain purchase option, or provides for minimum lease payments with a present value that equals or exceeds substantially all of the fair value of the leased equipment at the date of lease inception.

Net investment in finance lease represents the minimum lease payments due from lessee, net of unearned income.

Net investment in finance leases represents the minimum lease payments due from lessee, net of unearned income.

The lease payments are segregated into principal and interest components similar to a loan.

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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

(Dollars in tables in thousands, unless otherwise noted)

Infrastructure Revenues

Terminal Services Revenues —Terminal services are provided to customers for the receipt and redelivery of various commodities.

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

These revenues relate to performance obligations that are recognized over time using the right to invoice practical expedient, i.e., invoiced as the services are rendered and the customer simultaneously receives and consumes the benefit over the contract term.

The Company’s performance of service and right to invoice corresponds with the value delivered to our customers.

Revenues are typically invoiced and paid on a monthly basis.

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 generally 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.

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Crude Marketing Revenues —Crude marketing revenues consist of marketing revenue related to Canadian crude oil.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Contracts to sell crude products to customers contain performance obligations to deliver the product over the term of the contract.

The revenues are recognized when the control of the product is transferred to the customer, based on the volume delivered and the price within the contract.

Revenues are typically invoiced and paid on a monthly basis.

Other Revenue —Other revenue primarily consists of revenue related to the handling, storage and sale of raw materials.

Other revenue consists of two performance obligations:

handling and storage of raw materials.

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

Revenues for the handling and storage of raw materials relate to performance obligations that are recognized over time using the right to invoice practical expedient, i.e., invoiced as the services are rendered and the customer simultaneously receives and consumes the benefit over the contract term.

Our performance of service and right to invoice corresponds with the value delivered to our customers.

Revenues for the sale of raw materials relate to contracts that contain performance obligations to deliver the product over the term of the contract.

The revenues are recognized when the control of the product is transferred to the customer, based on the volume delivered and the price within the contract.

Other revenues are typically invoiced and paid on a monthly basis.

Additionally, other revenue consists of revenue related to derivative trading activities.

See Commodity Derivatives below for additional information.

Payment terms for Infrastructure Revenues are generally short term in nature.

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ROU assets, for both operating and finance leases, are initially measured based on the lease liability, adjusted for prepaid rent and lease incentives.

ROU assets are subsequently measured at the carrying amount of the lease liability adjusted for prepaid or accrued lease payments and lease incentives.

Operating lease ROU assets are subsequently measured at the carrying amount of the lease liability adjusted for prepaid or accrued lease payments and lease incentives.

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

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

With respect to finance leases, amortization of the ROU asset is presented separately from interest expense related to the finance lease liability.

With respect to finance leases, amortization of the ROU asset is presented separately from interest expense related to the finance lease liability and is recorded in Operating expenses in the Consolidated Statements of Operations.

Variable lease payments, which are primarily based on usage, are recognized when the associated activity occurs.

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Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets, and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred.

Concentration of Credit Risk — We are subject to concentrations of credit risk with respect to amounts due from customers on our finance leases and operating leases.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Concentration of Credit Risk — We are subject to concentrations of credit risk with respect to amounts due from customers.

We attempt to limit our credit risk by performing ongoing credit evaluations.

We earned approximately 11 % of our revenue from one customer in the Aviation Leasing segment during the year ended December 31, 2020, and 19 % and 16 % of our revenue from one customer in the Jefferson Terminal segment during the years ended December 31, 2019, and 2018, respectively.

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

As of December 31, 2019, accounts receivable from one customer in the Jefferson Terminal segment represented 16 % of total accounts receivable, net.

We earned approximately 11 % and 12 % of our revenue from one customer in the Aviation segment and one customer in the Transtar segment during the year ended December 31, 2021.

We earned 11 % and 19 % of our revenue from one customer in the Aviation Leasing segment and one customer in the Jefferson Terminal segment during the years ended December 31, 2020, and 2019, respectively.

As of December 31, 2021, there were two customers in the Aviation Leasing segment that represented 36 % and 13 % of total accounts receivable, net.

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

We maintain cash and restricted cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions.

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Expense Recognition —Expenses are recognized on an accrual basis as incurred.

Acquisition and Transaction expenses —Acquisition and transaction expense is comprised of costs related to completed business combinations, dispositions and terminated deal costs related to abandoned pursuits, including advisory, legal, accounting, valuation and other professional or consulting fees.

Acquisition and Transaction Expenses —Acquisition and transaction expense is comprised of costs related to business combinations, dispositions and terminated deal costs related to asset acquisitions, including advisory, legal, accounting, valuation and other professional or consulting fees.

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

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

Our comprehensive income (loss) represents net income (loss), as presented in the Consolidated Statements of Operations, adjusted for fair value changes recorded in other comprehensive income related to cash flow hedges of our equity method investees and pension and other postretirement benefits.

Derivative Financial Instruments

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We primarily use swap derivative contracts, which are agreements to buy or sell a quantity of electricity at a predetermined future date and at a predetermined price.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Cash Flow Hedges

Certain of these derivative instruments are designated and qualify as cash flow hedges.

Our share of the derivative's gain or loss is reported as Other comprehensive income related to equity method investees in our Consolidated Statements of Comprehensive (Loss) Income and recorded in Accumulated other comprehensive (loss) income in our Consolidated Balance Sheets.

Our share of the derivative's gain or loss is reported as Other comprehensive income (loss) related to equity method investees in our Consolidated Statements of Comprehensive (Loss) Income and recorded in Accumulated other comprehensive (loss) income in our Consolidated Balance Sheets.

The change in our equity method investment balance related to derivative gains or losses on cash flow hedges is disclosed as a Non-cash change in equity method investment in our Consolidated Statements of Cash Flows.

Derivatives Not Designated as Hedging Instruments

Certain of these derivative instruments are not designated as hedging instruments for accounting purposes.

The change in fair value of these contracts is recognized in Equity in earnings (losses) in unconsolidated entities in the Consolidated Statements of Operations.

Our share of change in fair value of these contracts is recognized in Equity in earnings (losses) in unconsolidated entities in the Consolidated Statements of Operations.

The cash flow impact of derivative contracts that are not designated as hedging instruments is recognized in Equity in earnings (losses) in unconsolidated entities in our Consolidated Statements of Cash Flows.

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Gains and losses related to our crude sales and purchase derivatives are recorded on a gross basis and are included in Crude marketing revenues and Operating expenses, respectively, in our Consolidated Statements of Operations.

See Note 11 for additional details.

The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows.

To the extent that we have outstanding derivatives, they are not used for speculative purposes.

We record all derivative assets and liabilities on a gross basis at fair value and are included in Other assets and Other liabilities, respectively, in our Consolidated Balance Sheets.

Additionally, depending on market conditions, we enter into short-term forward purchase and sales contracts for butane.

Gains and losses related to our butane derivatives are recorded on a net basis and are included in Other revenue in our Consolidated Statements of Operations, as these contracts are considered part of central operating activities.

The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows.

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

Foreign Currency — Our functional and reporting currency is the U.S.

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dollar equivalent actually received or paid are reported as a component of operating expenses within the Consolidated Statement of Operations.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Income Taxes — A portion of our income earned by our corporate subsidiaries is subject to U.S.

federal and state income taxation, taxed at prevailing rates.

federal and state income taxation and is taxed at currently enacted rates.

The remainder of our income is allocated directly to our partners and is not subject to a corporate level of taxation.

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Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in the Consolidated Statements of Operations.

Other Assets — Other assets is primarily comprised of commodities inventory of $ 0.1 million and $ 5.6 million, purchase deposits for acquisitions of $ 6.1 million and $ 1.2 million, lease incentives of $ 55.1 million and $ 45.3 million, prepaid expenses of $ 10.1 million and $ 4.1 million, maintenance right assets of $ 6.4 million and $ 24.5 million and spare parts of $ 58.2 million and $ 9.6 million as of December 31, 2020 and 2019, respectively.

Other Assets — Other assets is primarily comprised of commodities inventory of $ 6.8 million and $ 0.1 million, purchase deposits for acquisitions of $ 13.7 million and $ 6.1 million, lease incentives of $ 46.9 million and $ 55.1 million, prepaid expenses of $ 21.4 million and $ 10.1 million, notes receivable of $ 40.4 million and $ 0.7 million, maintenance right assets of $ 5.1 million and $ 6.4 million and aircraft engine modules, spare parts and used material inventory of $ 100.3 million and $ 58.2 million as of December 31, 2021 and 2020, respectively.

Accounts Payable and Accrued Liabilities —Accounts payable and accrued liabilities primarily include payables relating to construction projects, interline payables to other railroads, aviation leasing equipment maintenance and aircraft engine modules, spare parts, used material inventory , accrued compensation and interest.

Pension and Other Postretirement Benefits — We have obligations for a pension and a postretirement benefit plan in connection with the acquisition of Transtar for certain eligible Transtar employees.

The pension and other postretirement obligations and the related net periodic costs are based on, among other things, assumptions regarding the discount rate, salary increases, the projected mortality of participants and the current level and future escalation of health care costs.

Actuarial gains and losses occur when actual experience differs from any of the many assumptions used to value the benefit plans, or when assumptions change.

We will recognize into income on an annual basis a portion of unrecognized actuarial net gains or losses that exceed 10 percent of the projected benefit obligations (the corridor).

These unrecognized amounts in excess of the corridor are amortized over the plan participants' average life expectancy or average future service, depending on the demographics of the plan.

Refer to Note 16 for additional discussion on the pension and postretirement plans.

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

In both the quarters ended December 31, 2020 and 2019, the Board of Directors declared a cash dividend of $ 0.33 per common share, for a total of $ 1.32 per common share for each of the years ended December 31, 2020 and 2019.

Additionally, in the quarter ended December 31, 2020, the Board of Directors declared a cash dividend on the Series A Preferred Shares and Series B Preferred Shares of $ 0.52 and $ 0.50 per share, respectively, for a total of $ 2.06 and $ 2.10 per share, respectively, for the year ended December 31, 2020.

In the quarter and year ended December 31, 2019, the Board of Directors declared a cash dividend on the Series A Preferred Shares of $ 0.53 per share.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Recent Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) .

For assets held at amortized cost basis, ASU 2016-13 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this ASU requires that credit losses be presented as an allowance rather than as a write-down.

This ASU affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income.

The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

We adopted this ASU in the first quarter of 2020 and adoption did not have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment (“ASU 2017-04”).

ASU 2017-04 addresses concerns over the cost and complexity of the two-step goodwill impairment test by removing the second step of the test.

An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

The new guidance does not amend the optional qualitative assessment of goodwill impairment.

We adopted this ASU in the first quarter of 2020 and adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement .

This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project.

We adopted this ASU in the first quarter of 2020 and adoption did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which temporarily simplifies the accounting for contract modifications, including hedging relationships, due to the transition from LIBOR and other interbank offered rates to alternative reference interest rates.

The Board of Directors declared cash dividends of $ 1.32 per common share during each of the years ended December 31, 2021, 2020 and 2019.

Additionally, the Board of Directors declared cash dividends on the Series A Preferred Shares of $ 2.06 , $ 2.06 and $ 0.53 per share for the years ended December 31, 2021, 2020 and 2019, respectively, the Series B Preferred Shares of $ 2.00 and $ 2.10 per share for the years ended December 31, 2021 and 2020, respectively, and the Series C Preferred Shares of $ 1.49 for the year ended December 31, 2021.

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

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU 2021-01, Reference Rate Reform:

Scope, respectively.

Together, the 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.

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

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

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

This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

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The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 and early adoption is permitted.

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

DISCONTINUED OPERATIONS

In December 2019, we completed the sale of substantially all of our railroad business (“CMQR”), which was previously reported as our Railroad segment.

Under ASC 205-20, this disposition met the criteria to be reported as discontinued operations.

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

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

Lessors—Certain Leases with Variable Lease Payments .

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

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

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

DISCONTINUED OPERATIONS

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

Under ASC 205-20, this disposition met the criteria to be reported as discontinued operations.

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

The following table presents the significant components of net income from discontinued operations:

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Gain on sale of assets, net — 1,331 77,468

Other expense — — ( 42 )

Other income (expense) 1,331 77,468 ( 42 )

Other income — 1,331 77,468

Income before income taxes — 1,331 74,538

Provision for (benefit from) income taxes — 1,076 ( 1,077 )

Provision for income taxes — — 1,076

Net income — 1,331 73,462

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Purchases of property, plant and equipment $ — $ — $ ( 6,949 )

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 cash consideration of $ 636 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 $ 9.8 million of acquisition and transaction expense during the year ended December 31, 2021.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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.

In accordance with ASC 805, the following fair values were assigned to assets acquired and liabilities assumed based on management’s estimates and assumptions and are preliminary.

The significant assumptions used to estimate the value of the customer relationship intangible assets included discount rate and future revenues and operating expenses.

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 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, 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 $ 8,918

Accounts receivable 18,625

Operating lease right-of-use assets 12,231

Property, plant and equipment 490,561

Intangible assets 60,000

Other assets 15,008

Total assets 605,343

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 8,487

Total liabilities 103,738

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 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

Customer relationships 15

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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 87,450

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 - 5

Total $ 490,561

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 year ended December 31, 2021 and allocation of substantially all acquisition-related costs to the year ended December 31, 2020;

• Associated tax-related impacts of adjustments.

The following unaudited 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.

Year Ended December 31,

Total revenue $ 536,805 $ 481,678

Net loss attributable to shareholders ( 104,611 ) ( 125,989 )

LEASING EQUIPMENT, NET

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(Dollars in tables in thousands, unless otherwise noted)

During the year ended December 31, 2020, we evaluated our leasing equipment portfolio and identified certain assets with indicators of impairment including, but not limited to, early lease terminations and a decline in market values due to the ongoing COVID-19 pandemic for leasing equipment we have decided to sell.

During the year ended December 31, 2021, we evaluated our leasing equipment portfolio and identified certain assets with indicators of impairment including, but not limited to, early lease terminations and a decline in market values due to the ongoing COVID-19 pandemic for leasing equipment.

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.

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Finance leases, net $ 7,583 $ 6,927

During the third quarter of 2020, we entered into a 15 month sales-type lease arrangement for three engines.

During the fourth quarter of 2020, the lessee exercised its option to purchase the three engines for an amount equal to the remaining principal balance plus unpaid accrued interest per the terms of the arrangement.

During the year ended December 31, 2021, we entered into 52-month sales-type lease arrangements for five airframes.

During the fourth quarter of 2021, one of our lessees exercised its option to purchase the aircraft for an amount equal to the remaining principal balance plus unpaid accrued interest per the terms of the agreement.

Additionally, during 2019, we received insurance proceeds for a vessel which was on nonaccrual status due to a casualty event.

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Construction in progress 154,859 425,261

Bridges and Tunnels 174,889 —

Buildings and improvements 19,164 4,491

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Railroad equipment 8,331 5,560

Railcars and locomotives 111,574 —

Computer hardware and software 5,335 5,101

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Property, plant and equipment, net $ 1,555,857 $ 964,363

We added property, plant and equipment of $ 258.9 million and $ 85.4 million during the years ended December 31, 2020 and 2019, respectively, which primarily consists of terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

We added property, plant and equipment of $ 639.4 million and $ 258.9 million during the years ended December 31, 2021 and 2020, respectively, 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:

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Advanced Engine Repair JV Equity method 25 % $ 21,317 $ 22,721

Intermodal Finance I, Ltd.

Falcon MSN 177 LLC

Equity method 50 % 1,600 —

Long Ridge Terminal LLC Equity method 50 % 122,539 155,397

Long Ridge Terminal LLC (1)

Equity method 50 % — 122,539

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

GM-FTAI Holdco LLC Equity method See below 52,295 —

Clean Planet Energy USA LLC Equity method 50 % 858 —

$ 77,325 $ 146,515

________________________________________________________

(1) The carrying value of $ 17.5 million as of December 31, 2021 is included in Other liabilities in the Consolidated Balance Sheets.

We did not recognize any other-than-temporary impairments for the year ended December 31, 2021.

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Long Ridge Terminal LLC ( 11,429 ) ( 3,222 ) ( 192 )

GM-FTAI Holdco LLC ( 205 ) — —

Clean Planet Energy USA LLC ( 167 ) — —

Total $ ( 12,734 ) $ ( 5,039 ) $ ( 2,375 )

Equity Method Investments

Clean Planet Energy USA LLC

In November 2021, we acquired 50 % of the Class A shares of Clean Planet Energy USA LLC (“CPE”) with an initial investment of $ 1.0 million.

CPE intends on building waste plastic-to-fuel plants in the United States.

The plants will convert various grades of non-recyclable waste plastic to renewable diesel in the form of jet fuel, diesel, naphtha, and low sulfur fuel oil.

We account for our investment in CPE as an equity method investment as we have significant influence through our ownership of Class A shares.

Falcon MSN 177 LLC

In November 2021, we invested $ 1.6 million for a 50 % interest in Falcon MSN 177 LLC, an entity that consists of one Dassault Falcon 2000 aircraft.

Falcon MSN 177 LLC leases the aircraft to charter operators on aircraft, crew maintenance, and insurance contracts.

We account for our investment in Falcon as an equity method investment as we have significant influence through our held interest.

GM-FTAI Holdco LLC

In September 2021, we acquired 1 % of the Class A shares and 50 % of the Class B shares of GM-FTAI Holdco LLC for $ 52.5 million.

GM-FTAI Holdco LLC owns 100 % interest in Gladieux Metals Recycling (“GMR”) and Aleon Renewable Metals LLC (“Aleon”).

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

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.

Aleon and GMR are governed by separate boards of directors.

Our ownership of Class A and B shares in GM-FTAI Holdco LLC provides us with 1 % and 50 % economic interest in GMR and Aleon, respectively.

We account for our investment in GM-FTAI Holdco LLC as an equity method investment as we have significant influence through our ownership of Class A and Class B shares of GM-FTAI Holdco LLC.

Long Ridge Terminal LLC

In December 2019, Ohio River Shareholder LLC (“ORP”) contributed its equity interests in Long Ridge into Long Ridge Terminal LLC and sold a 49.9 % interest (the “Long Ridge Transaction”) for $ 150 million in cash, plus an earn out.

In December 2019, Ohio River Shareholder LLC (“ORP”), a wholly-owned subsidiary, contributed its equity interests in Long Ridge into Long Ridge Terminal LLC and sold a 49.9 % interest (the “Long Ridge Transaction”) for $ 150 million in cash, plus an earn out, which was written off during the year ended December 31, 2021.

We recognized a gain of $ 116.7 million in relation to the Long Ridge Transaction.

We no longer have a controlling interest in Long Ridge but still maintain significant influence through our retained interest and, therefore, now account for this investment in accordance with the equity method.

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In August 2019, we expanded the scope of our joint venture and invested an additional $ 13.5 million and maintained a 25 % interest.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

JGP Energy Partners LLC

4 unchanged sentences

In December 2019, we purchased the remaining 50 % interest in JGP from the joint venture partner for a purchase price of approximately $ 30 million, consolidated JGP and no longer account for this as an equity method investment.

As a result of this transaction, we recorded additional goodwill of $ 6.6 million and a gain of $ 4.6 million during the year ended December 31, 2019.

Intermodal Finance I, Ltd.

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In July 2020, we invested $ 1.3 million for a 14 % interest in an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.

FYX Trust Holdco LLC (“FYX”) has developed a mobile and web-based application that connects fleet managers, owner-operators, and drivers with repair vendors to efficiently and reliably quote, dispatch, monitor, and bill roadside repair services.

FYX has developed a mobile and web-based application that connects fleet managers, owner-operators, and drivers with repair vendors to efficiently and reliably quote, dispatch, monitor, and bill roadside repair services.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

The tables below present summarized financial information for our equity method investments:

The tables below present summarized financial information for Long Ridge Terminal LLC:

Balance Sheet 2021 2020

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Accounts receivable, net 17,896 5,711

Leasing equipment, net 1,078 2,546

Property, plant, and equipment, net 764,607 612,234

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Income Statement 2021 2020

Revenue $ 25,079 $ 8,887 $ 9,435

Total revenue 85,638 24,917

Research and development cost 6,663 6,323 2,134

Operating expenses 28,310 16,339

General and administrative 1,191 1,550 1,437

Management fees and incentive allocation to affiliate 11,004 142 400

Depreciation and amortization 24,836 11,004

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Total expenses 64,151 29,380

Other (expense) income ( 1,585 ) 734 2,070

Loss before income taxes ( 14,710 ) ( 8,699 ) ( 3,996 )

Provision for income taxes — — —

Other expense ( 44,302 ) ( 1,967 )

Net loss $ ( 22,815 ) $ ( 6,430 )

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December 31, 2021

Aviation Leasing Jefferson Terminal Total

Aviation Leasing Jefferson Terminal Transtar Total

Intangible assets

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December 31, 2020

Aviation Leasing Jefferson Terminal Total

Aviation Leasing Jefferson Terminal Transtar Total

Intangible assets

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Acquired unfavorable lease intangibles, net $ 2,547 $ — $ — $ 2,547

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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Total $ 10,285 $ 7,300 $ 10,749

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

2022 $ 17,242

Thereafter 37,484

Total $ 89,972

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

As of December 31, 2020, estimated net annual amortization of intangibles is as follows:

Total $ 16,239

Our debt, net is summarized as follows:

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Loans payable

FTAI Pride Credit

$ — N/A N/A $ 36,009

Jefferson Revolver — N/A N/A 50,000

DRP Revolver (1)

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189,473 (i) Base Rate + 2.00 %;

(ii) Adjusted Eurodollar Rate + 3.00 %

(ii) Adjusted Term SOFR Rate + 3.00 %

EB-5 Loan Agreement 26,100 5.75 % 1/25/26 —

2021 Bridge Loans 100,527 (i) Base Rate + 1.75 %;

(ii) Adjusted Term SOFR Rate + 2.75 %

Total loans payable 341,100 25,000

Bonds payable

Series 2012 Bonds (3)

Series 2020 Bonds 263,980 (i) Tax Exempt Series 2020A Bonds:

(ii) Tax Exempt Series 2020A Bonds:

(iii) Taxable Series 2020B Bonds:

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 2022 (3)

— N/A N/A 399,331

Series 2016 Bonds — N/A N/A 144,200

Series 2020 Bonds 263,980 See below See below —

Senior Notes due 2025 (4)

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Senior Notes due 2027 400,000 9.75 % 8/1/27 400,000

845,697 6.50 % 10/1/2025 444,957

Senior Notes due 2028 (5)

1,002,416 5.50 % 5/1/28 —

Total bonds payable 2,943,594 1,915,984

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(2) Requires a quarterly commitment fee at a rate of 0.50 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(3) Includes unamortized premium of $ 1,509 as of December 31, 2019.

(4) Includes unamortized discount of $ 2,230 and $ 5,429 , respectively, and an unamortized premium of $ 8,537 and $ 3,243 , respectively, as of December 31, 2020 and 2019.

(5) Includes unamortized discount of $ 4,303 and $ 5,043 as of December 31, 2020 and 2019, respectively.

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

(4) Includes unamortized discount of $ 3,509 and $ 4,303 at December 31, 2021 and 2020, respectively, and an unamortized premium of $ 5,707 and $ 6,976 at December 31, 2021 and 2020, respectively.

(5) Includes an unamortized premium of $ 2,416 at December 31, 2021.

2021 Activity

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

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

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

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

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

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

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

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).

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.

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.

DRP Revolver — On November 5, 2021, we entered into an amendment to the DRP Revolver, which extends the maturity date under the DRP Revolver to November 5, 2024.

In connection with this extension, the obligations of FTAI to contribute capital in the event of an event of default under the DRP Revolver were terminated.

Revolving Credit Facility — On December 2, 2021, we entered into an amendment to the Revolving Credit Facility, which extends the maturity date under the Revolving Credit Facility to December 2, 2024.

2021 Bridge Loans — On December 2, 2021, we entered into an agreement for senior secured bridge term loans (“2021 Bridge Loans”) in an aggregate principal amount of $ 350.0 million, which we used to finance or refinance certain assets.

The 2021 Bridge Loans mature on December 15, 2022.

2020 Activity

Series 2020 Bonds — On February 11, 2020, our subsidiary (“Jefferson”) issued Series 2020 Bonds in an aggregate principal amount of $ 264.0 million (“Jefferson Refinancing”).

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Jefferson recognized a loss on extinguishment of debt of $ 4.7 million as a result of this transaction.

FTAI Pride Credit Agreement — During March 2020, we repaid the FTAI Pride Credit Agreement in full.

Revolving Credit Facility — On May 11, 2020, we entered into an amendment to the Revolving Credit Facility which, among other things, (i) permits the incurrence of additional secured indebtedness to finance the potential acquisition of certain aviation assets, subject to certain limitations, (ii) provides that, to the extent borrowings under the existing agreement exceed $ 150 million, we will pledge certain aviation assets as additional collateral and (iii) incorporates certain other updates, including procedures by which the parties will select a replacement benchmark interest rate in the event that LIBOR is no longer available or appropriate as a reference rate upon which to determine the interest rate under the existing agreement.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Senior Notes due 2027 — On July 28, 2020, we issued $ 400 million aggregate principal amount of senior unsecured notes due 2027 (the “2027 Notes”).

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Revolving Credit Facility — — 189,473 — — — 189,473

EB-5 Loan Agreement — — — — 26,100 — 26,100

2021 Bridge Loans 100,527 — — — — — 100,527

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

Series 2021 Bonds — — — — 9,025 415,975 425,000

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

2 unchanged sentences

Total principal payments on loans and bonds payable $ 100,527 $ — $ 214,473 $ 929,060 $ 35,125 $ 2,000,895 $ 3,280,080

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

FAIR VALUE MEASUREMENTS

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• Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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Restricted cash 251,983 251,983 — — Market

Derivative assets 2,220 — 2,220 — Income

Total assets $ 442,281 $ 440,061 $ 2,220 $ —

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Restricted cash 39,715 39,715 — — Market

Derivative assets 181 — — 181 Income

Total assets $ 161,418 $ 161,418 $ — $ —

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These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy.

The fair value of our commodity derivative assets and liabilities classified as Level 3 measurements are estimated by applying the income approach, which is based on discounted projected future cash flows.

The valuation of our electricity derivatives within our equity method investment in Long Ridge is based on management’s best estimate of certain key assumptions, which include extrapolated power forward curves for periods with unobservable market pricing, credit valuation adjustments utilizing estimated cash flows, estimated price volatility and probability of default, and the discount rate.

The valuation of our commodity derivatives is based on management’s best estimate of certain key assumptions, which include an estimated differential factor for varying quality of commodity and the discount rate.

Except as discussed below, our financial instruments other than cash and cash equivalents, 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 value approximates their carrying value 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

(Dollars in tables in thousands, unless otherwise noted)

The fair value as of December 31, 2021 of our commodity derivative assets classified as Level 2 measurements are estimated by applying the income and market approaches, based on quotes of observable market transactions, and adjusted for estimated differential factors based on quality and delivery locations.

Except as discussed below, our financial instruments other than cash, 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 value approximates their carrying value based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles.

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

Series 2012 Bonds (1)

Series 2016 Bonds (1)

Series 2020 A Bonds (1)

$ 189,773 $ 186,306

Series 2020 B Bonds (1)

81,637 79,723

Series 2021 A Bonds (1)

Series 2021 B Bonds (1)

Senior Notes due 2022 — 403,536

1 unchanged sentence

Senior Notes due 2027 448,848 460,340

Senior Notes due 2028 1,019,470 —

______________________________________________________________________________________

(1) These bonds were defeased as part of the Jefferson Refinancing.

See Note 9 for additional details.

(1) Fair value is based upon market prices for similar municipal securities.

Due to the COVID-19 pandemic, the fair values of our notes and bonds fluctuated significantly during 2020 and may continue to fluctuate based on market conditions and other factors.

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

We measure the fair value of certain assets and liabilities on a non-recurring basis when GAAP requires the application of fair value, including events or changes in circumstances that indicate that the carrying amounts of assets may not be recoverable.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

We measure the fair value of certain assets and liabilities on a non-recurring basis when U.S.

GAAP requires the application of fair value, including events or changes in circumstances that indicate that the carrying amounts of assets may not be recoverable.

Assets subject to these measurements include goodwill, intangible assets, property, plant and equipment and leasing equipment.

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Commodity Derivatives

Depending on market conditions, we source crude oil from producers in Canada, arranging logistics to Jefferson Terminal and marketing crude oil to third parties.

Depending on market conditions, we sourced crude oil from producers in Canada, arranging logistics to Jefferson Terminal and marketing crude oil to third parties.

We exited this strategy in the fourth quarter of 2019.

These crude oil forward purchase and sales contracts are not designated in hedging relationships.

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

Depending on market conditions, Repauno enters into forward purchase and sales contracts for butane.

These derivatives are short-term in nature, are used for trading purposes and classified as Level 2 derivatives.

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

Notional Amount (BBL in thousands)

Fair Value of Assets (1)

Term 1 to 3 months

________________________________________________________

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

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

Year Ended December 31,

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Beginning Balance $ — $ 181 $ 6,545

Net (losses) gains recognized in earnings ( 181 ) ( 6,364 ) 5,523

Net losses recognized in earnings — ( 181 ) ( 6,364 )

Purchases — — 314

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

We disaggregate our revenue from contracts with customers by products and services provided for each of our segments, as we believe it best depicts the nature, amount, timing and uncertainty of our revenue.

Revenues attributed to our Equipment Leasing business unit are within the scope of ASC 842, while revenues attributed to our Infrastructure business unit are within the scope of ASC 606, unless otherwise noted.

We have elected to exclude sales and other similar taxes from revenues.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

Revenues attributed to our Equipment Leasing business unit are within the scope of ASC 840 prior to January 1, 2019 and ASC 842 after January 1, 2019, while revenues attributed to our Infrastructure business unit are within the scope of ASC 606, unless otherwise noted.

Under the provisions of ASC 842, we have elected to exclude sales and other similar taxes from lease payments in arrangements where we are a lessor.

Year Ended December 31, 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

10 unchanged sentences

— 1,688 — 736 — 2,424

Rail revenues

— — — 56,803 — 56,803

Terminal services revenues — 44,664 374 — — 45,038

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

Other revenue — — 11,243 — 4,711 15,954

5 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

Equipment leasing revenues

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Total equipment leasing revenues

$ 281,211 $ — $ — $ — $ 16,723 $ 297,934

Infrastructure revenues

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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

4 unchanged sentences

Total equipment leasing revenues

$ 336,675 $ — $ — $ — $ 12,647 $ 349,322

Infrastructure revenues

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

Our leases have remaining lease terms ranging from approximately 4 months to 42 years.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following table presents lease related costs:

Year Ended December 31,

2021 2020 2019

Finance leases

Amortization of right-of-use assets $ 380 $ — $ —

Interest on lease liabilities 27 — —

Finance lease expense 407 — —

Operating lease expense 6,564 4,719 5,857

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Total lease expense $ 9,556 $ 6,876 $ 15,702

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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Continuing operations $ 6,114

Discontinued operations $ —

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

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Total lease liabilities $ 73,594

During the year ended December 31, 2020, we amended a lease agreement for real estate in connection with the Jefferson Refinancing.

The amended lease had a ROU asset value of $ 59.8 million and a lease term of approximately 43 years at commencement.

In July 2021, in connection with our acquisition of Transtar, we assumed ROU assets of approximately $ 12.2 million with a weighted average remaining term of 5.5 years.

Additionally, during the year ended December 31, 2021, we entered into a new lease for real estate, which had a ROU asset value of $ 2.7 million and a lease term of approximately five years at commencement.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

EQUITY-BASED COMPENSATION

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The following table presents our stock-based compensation expense:

Year Ended December 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met

Year Ended December 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met as of December 31, 2021

2021 2020 2019

Stock options $ — $ — $ 9 $ —

Restricted shares $ 3,215 $ 1,676 $ 1,054 $ 3,731

2 unchanged sentences

Common units - discontinued operations $ — $ — $ 3,114

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following tables present information for our stock options, restricted shares and common units:

The following tables present information for our stock options, restricted shares of our subsidiary and common units of our subsidiary:

Stock Options Restricted Shares Common Units

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Stock Options

In connection with our equity offerings in 2020, 2019 and 2018 (see Note 18 for details), we granted options to the Manager related to common shares.

In connection with our equity offerings (see Note 20 for details), we granted options to the Manager related to common shares.

The fair value of these options was recorded as an increase in equity with an offsetting reduction of capital proceeds received.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following table presents information related to the options related to our shares:

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10 years 10 years 10 years

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Restricted Shares

We issued 545,806 and 113,121 restricted shares of our subsidiary during the years ended December 31, 2020 and 2019, respectively, that had grant date fair values of $ 4.0 million and $ 1.5 million, respectively, and generally vest over three years .

We issued 662,423 , 545,806 and 113,121 restricted shares of our subsidiary during the years ended December 31, 2021, 2020 and 2019, respectively, that had grant date fair values of $ 5.6 million, $ 4.0 million and $ 1.5 million, respectively, and generally 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 established a defined benefit pension plan as well as a postretirement benefit plan to assume 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.

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 plan costs for the year ended December 31, 2021 and estimated benefit obligation as of December 31, 2021.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Pension Benefits Postretirement Benefits

Benefit obligation as of January 1, 2021 $ — $ —

Transtar acquisition 9,055 28,488

Service costs 712 864

Interest costs 108 337

Actuarial losses (gains) ( 20 ) 344

Benefits paid ( 50 ) —

Benefit obligation as of December 31, 2021 $ 9,805 $ 30,033

The pension and postretirement benefits are unfunded and recorded in Other liabilities on the Consolidated Balance Sheets.

Weighted-average assumptions used to determine the estimated benefit obligation and period costs as of and for the year ended December 31, 2021 are as follows:

Pension Benefits Postretirement Benefits

Weighted-average assumptions used to determine pension and postretirement benefit obligations:

Discount rate 3.02 % 3.00 %

Rate of compensation increase 3.50 % N/A

Average future working lifetime (years) N/A 11.34

Initial healthcare cost trend rate - Pre-Medicare N/A 10.00 %

Initial healthcare cost trend rate - Medicare eligible N/A 3.00 %

Ultimate healthcare cost trend rate N/A 3.94 %

Year ultimate healthcare cost trend rate is reached N/A 2075

Weighted-average assumptions used to determine net periodic pension and postretirement costs:

Discount rate 2.88 % 2.86 %

Rate of compensation increases 3.50 % N/A

Average future working lifetime (years) 10.93 11.34

Initial healthcare cost trend rate N/A 6.00 %

Ultimate healthcare cost trend rate N/A 3.80 %

Year ultimate healthcare cost trend rate is reached N/A 2075

The following benefit payments, which reflect expected future service and compensation increases, as appropriate, are expected to be made from the Transtar defined benefit plans:

Pension Benefits Postretirement Benefits

2022 $ 51 $ 102

Years 2027-2031 4,501 3,252

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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We are taxed as a flow-through entity for U.S.

income tax purposes and our taxable income or loss generated is the responsibility of our owners.

income tax purposes and our taxable income or loss generated is the responsibility of our owners, except as related to certain wholly owned corporate subsidiaries for which only distributions therefrom flow through to our shareholders.

Taxable income or loss generated by our corporate subsidiaries is subject to U.S.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The difference between our reported total provision for income taxes and the U.S.

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Branch profit tax ( 0.1 ) % — % — %

Change in tax rates — % — % — %

Other ( 3.7 ) % 0.1 % ( 0.6 ) %

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Provision for income taxes 0.8 % 5.4 % 8.3 %

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Significant components of our deferred tax assets and liabilities are as follows:

4 unchanged sentences

Operating lease liabilities 23,504 10,119

Investment in Partnerships 17,043 —

Other 1,124 2,895

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Net deferred tax liabilities $ ( 1,491 ) $ ( 6,163 )

Current and deferred tax assets and liabilities are reported net in Other assets or Other liabilities in the Consolidated Balance Sheets.

Deferred tax assets and liabilities are reported net in Other assets or Other liabilities in the Consolidated Balance Sheets.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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Valuation allowance at end of period $ 142,541 $ 98,091

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

As of December 31, 2021, certain of our corporate subsidiaries had U.S.

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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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

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The Manager is entitled to a management fee, incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below) and reimbursement of certain expenses.

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

The management fee is determined by taking the average value of total equity (excluding non-controlling interests) determined on a consolidated basis in accordance with U.S.

GAAP at the end of the two most recently completed months multiplied by an annual rate of 1.50 %, and is payable monthly in arrears in cash.

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

For this purpose, pre-incentive allocation net income means, with respect to a calendar quarter, net income attributable to shareholders during such quarter calculated in accordance with GAAP excluding our pro rata share of (1) realized or unrealized gains and losses, and (2) certain non-cash or one-time items, and (3) any other adjustments as may be approved by our independent directors.

For this purpose, pre-incentive allocation net income means, with respect to a calendar quarter, net income attributable to shareholders during such quarter calculated in accordance with U.S.

GAAP excluding our pro rata share of (1) realized or unrealized gains and losses, and (2) certain non-cash or one-time items, and (3) any other adjustments as may be approved by our independent directors.

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

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Total $ 16,322 $ 18,519 $ 36,059

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

The expenses required to be paid by us include, but are not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of our assets, legal and auditing fees and expenses, the compensation and expenses of our independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of ours (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of ours, costs and expenses incurred in contracting with third parties (including affiliates of the Manager), the costs of printing and mailing proxies and reports to our shareholders, costs incurred by the Manager or its affiliates for travel on our behalf, costs associated with any computer software or hardware that is used by us, costs to obtain liability insurance to indemnify our directors and officers and the compensation and expenses of our transfer agent.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(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.

We will pay or reimburse the Manager and its affiliates for performing certain legal, accounting, due diligence tasks and other services that outside professionals or outside consultants otherwise would perform, provided that such costs and reimbursements are no greater than those which would be paid to outside professionals or consultants.

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Total $ 10,914 $ 11,633 $ 14,416

________________________________________________________

(1) Due to the Aviation Restructuring (as defined in Note 17), during the years ended December 31, 2019 and 2018, $ 11,659 and $ 5,551 , respectively, was restated from the Corporate and Other segment to the Aviation Leasing segment, of which $ 3,536 and $ 1,836 , respectively, was reclassified from General and administrative to Operating expenses and $ 8,123 and $ 3,715 , respectively, remained in Acquisition and transaction expenses.

See Note 17 for additional details.

If we terminate the Management Agreement, we will generally be required to pay the Manager a termination fee.

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Other payables 2,326 1,317

________________________________________________________

(1) Includes $ 21.2 million related to incentive fees, as of December 31, 2019, which we paid in 2020.

As of December 31, 2021 and 2020, no amounts were recorded as a receivable from the Manager.

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The carrying amount of this non-controlling interest at December 31, 2021 and 2020 was $ 9.1 million and $ 17.2 million, respectively.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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

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Non-controlling interest share of net loss $ ( 26,250 ) $ ( 16,483 ) $ ( 17,357 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

On June 21, 2018, we, through a wholly owned subsidiary, completed a private offering with several third parties (the “Holders”) to tender their approximately 20 % stake in Jefferson Terminal.

We increased our majority interest in Jefferson Terminal in exchange for Class B Units of another wholly owned subsidiary, which provide the right to convert such Class B Units to a fixed amount of our shares, equivalent to approximately 1.9 million shares, at a Holder’s request.

We have the option to satisfy any exchange request by delivering either common shares or cash.

The Holders are entitled to receive distributions equivalent to the distributions paid to our shareholders.

This transaction resulted in a purchase of non-controlling interest shares.

See Note 20 for details related to conversions during the period.

In July 2020, we purchased a 14 % interest in FYX from an affiliate of our Manager, which retained a non-controlling interest in FYX subsequent to the transaction.

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The Fee and Support Agreement provides that the affiliate of the Manager is compensated for its guarantee of a portion of the obligations under the Standby Bond Purchase Agreement.

This affiliate of the Manager received fees of $ 1.7 million, which will be amortized as interest expense to the earlier of the redemption date or February 13, 2020.

This affiliate of the Manager received fees of $ 1.7 million, which was amortized as interest expense to the earlier of the redemption date or February 13, 2020.

In connection with the amendment to the Jefferson Revolver, on December 20, 2018, our subsidiary and an affiliate of our Manager entered into an amended and restated Fee and Support Agreement, and our subsidiary issued a $ 0.3 million promissory note to the affiliate of our Manager, as consideration for the fee payable pursuant to the amended and restated Fee and Support Agreement.

In February 2020, the Fee and Support Agreement was terminated in connection with the Jefferson Refinancing.

On June 21, 2018, we, through a wholly owned subsidiary, completed a private offering with several third parties (the “Holders”) to tender their approximately 20 % stake in Jefferson Terminal.

We have the option to satisfy any exchange request by delivering either common shares or cash.

The Holders are entitled to receive distributions equivalent to the distributions paid to our shareholders.

This transaction resulted in a purchase of non-controlling interest shares.

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

In the second quarter of 2018, we purchased all shares held by the non-controlling interest holder in our Aviation Leasing segment for a purchase price of $ 3.7 million.

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.

The Jefferson Terminal segment consists of a multi-modal crude oil and refined products terminal and other related assets.

The Ports and Terminals segment consists of Repauno, which is a 1,630 acre deep-water port located along the Delaware River with an underground storage cavern and multiple industrial development opportunities, and an equity method investment in Long Ridge, which is a 1,660 acre multi-modal port located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant under construction.

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 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 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 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.

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 (see Note 16).

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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The following table presents our adjustments for the year ended December 31, 2019:

As Previously Reported Adjustments As Reported

Aviation Leasing Corporate and Other Aviation Leasing Corporate and Other Aviation Leasing Corporate and Other

Operating expenses $ 14,132 $ 17,544 $ 3,536 $ — $ 17,668 $ 17,544

General and administrative — 20,441 — ( 3,536 ) — 16,905

Acquisition and transaction expenses 518 12,097 8,123 ( 8,123 ) 8,641 3,974

The following table presents our adjustments for the year ended December 31, 2018:

As Previously Reported Adjustments As Reported

Aviation Leasing Corporate and Other Aviation Leasing Corporate and Other Aviation Leasing Corporate and Other

Operating expenses $ 9,149 $ 14,487 $ 1,836 $ — $ 10,985 $ 14,487

General and administrative — 17,126 — ( 1,836 ) — 15,290

Acquisition and transaction expenses 315 6,653 3,715 ( 3,715 ) 4,030 2,938

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 (see Note 8 for additional information) .

The accounting policies of the segments are the same as those described in the summary of significant accounting policies;

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

We evaluate investment performance for each reportable segment primarily based on net income attributable to shareholders and Adjusted EBITDA.

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

We believe that net income (loss) attributable to shareholders, as defined by GAAP, is the most appropriate earnings measurement with which to reconcile Adjusted EBITDA.

Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to shareholders as determined in accordance with GAAP.

The chief operating decision maker evaluates investment performance for each reportable segment primarily based on Adjusted EBITDA.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

We believe that net income (loss) attributable to shareholders, as defined by U.S.

GAAP, is the most appropriate earnings measurement with which to reconcile Adjusted EBITDA.

Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to shareholders as determined in accordance with U.S.

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

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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 $ 321,422 $ — $ — $ — $ 14,161 $ 335,583

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Total expenses 210,347 99,080 24,602 40,201 237,161 611,391

Other (expense) income

Other income (expense)

Equity in (losses) earnings of unconsolidated entities ( 1,403 ) — ( 11,429 ) — 98 ( 12,734 )

Loss on sale of assets, net ( 300 ) ( 8 ) — — ( 308 )

Gain on sale of assets, net 49,015 — 16 — — 49,031

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

Interest income 1,153 — 318 — 240 1,711

Other income — 70 — — 70

Total other (expense) income ( 2,138 ) ( 4,640 ) ( 3,222 ) ( 6,782 ) ( 16,782 )

Other (expense) income ( 1,680 ) ( 4,726 ) ( 4,100 ) ( 423 ) 1 ( 10,928 )

Total other income (expense) 47,085 ( 4,726 ) ( 15,195 ) ( 423 ) ( 2,915 ) 23,826

Income (loss) from continuing operations before income taxes 158,160 ( 57,454 ) ( 28,180 ) 16,915 ( 221,204 ) ( 131,763 )

(Benefit from) provision for income taxes ( 4,812 ) 278 ( 1,791 ) 420 ( 5,905 )

Provision for (benefit from) income taxes 935 230 ( 3,749 ) 1,602 ( 75 ) ( 1,057 )

Net income (loss) from continuing operations 157,225 ( 57,684 ) ( 24,431 ) 15,313 ( 221,129 ) ( 130,706 )

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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 $ 340,613 $ 10,631 $ 21,375 $ 28,129 $ ( 64,433 ) $ 336,315

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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

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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 $ 281,211 $ — $ — $ — $ 16,723 $ 297,934

9 unchanged sentences

Total expenses 195,236 91,532 14,066 — 159,808 460,642

Other income (expense)

Equity in losses of unconsolidated entities ( 1,829 ) ( 292 ) ( 192 ) ( 62 ) ( 2,375 )

Gain on sale of assets, net 81,954 4,636 116,660 — 203,250

Other (expense) income

Equity in (losses) earnings of unconsolidated entities ( 1,932 ) — ( 3,222 ) — 115 ( 5,039 )

Loss on sale of assets, net ( 300 ) ( 8 ) — — — ( 308 )

Loss on extinguishment of debt — ( 4,724 ) — — ( 6,943 ) ( 11,667 )

Interest income 94 22 — — 46 162

Other income — 70 — — — 70

Total other income 80,229 5,096 118,566 960 204,851

Total other expense ( 2,138 ) ( 4,640 ) ( 3,222 ) — ( 6,782 ) ( 16,782 )

Income (loss) from continuing operations before income taxes 83,837 ( 35,889 ) ( 13,433 ) — ( 145,443 ) ( 110,928 )

Provision for income taxes 2,826 284 14,700 — 17,810

(Benefit from) provision for income taxes ( 4,812 ) 278 ( 1,791 ) — 420 ( 5,905 )

Net income (loss) from continuing operations 88,649 ( 36,167 ) ( 11,642 ) — ( 145,863 ) ( 105,023 )

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(Dollars in tables in thousands, unless otherwise noted)

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

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

Year Ended December 31, 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 $ 288,752 $ 16,118 $ ( 2,600 ) $ — $ ( 58,964 ) $ 243,306

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Equity-based compensation expense ( 2,325 )

Provision for income taxes ( 17,810 )

Net income attributable to shareholders from continuing operations $ 150,055

Benefit from income taxes 5,905

Net loss attributable to shareholders from continuing operations $ ( 106,370 )

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

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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 $ 10,259 $ — $ — $ — $ — $ 10,259

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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 $ 336,675 $ — $ — $ — $ 12,647 $ 349,322

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Depreciation and amortization 128,990 22,873 9,849 — 7,311 169,023

Asset impairment — — 4,726 — — 4,726

Interest expense — 16,189 1,712 — 77,684 95,585

1 unchanged sentence

Other income (expense)

Equity in (losses) earnings of unconsolidated entities ( 743 ) ( 574 ) — 309 ( 1,008 )

Equity in losses of unconsolidated entities ( 1,829 ) ( 292 ) ( 192 ) — ( 62 ) ( 2,375 )

Gain on sale of assets, net 81,954 4,636 116,660 — — 203,250

Loss on extinguishment of debt — — — — — —

Interest income 104 118 289 — 20 531

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Income (loss) from continuing operations before income taxes 261,605 ( 61,124 ) 94,604 — ( 142,953 ) 152,132

Provision for (benefit from) income taxes 2,280 261 1 ( 93 ) 2,449

Provision for income taxes 2,826 284 14,700 — — 17,810

Net income (loss) from continuing operations 258,779 ( 61,408 ) 79,904 — ( 142,953 ) 134,322

Net loss from continuing operations attributable to non-controlling interests in consolidated subsidiaries — ( 17,356 ) ( 215 ) — — ( 17,571 )

Dividends on preferred shares — — — — 1,838 1,838

Net income (loss) attributable to shareholders from continuing operations $ 258,779 $ ( 44,052 ) $ 80,119 $ — $ ( 144,791 ) $ 150,055

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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 $ 429,398 $ ( 6,160 ) $ 114,760 $ — $ ( 34,590 ) $ 503,408

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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 $ 14,542 $ — $ — $ — $ — $ 14,542

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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 $ 2,098,979 $ 1,284,432 $ 316,899 $ 762,294 $ 401,250 $ 4,863,854

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

Property, plant and equipment and leasing equipment, net

Africa $ — $ — $ — $ — $ —

Asia $ 368,298 $ — $ — $ — $ 175,313 $ 543,611

3 unchanged sentences

Total property, plant and equipment and leasing equipment, net $ 1,718,588 $ 786,566 $ 280,210 $ 481,826 $ 180,316 $ 3,447,506

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

December 31, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

December 31, 2020

Equipment Leasing Infrastructure

Aviation Leasing Jefferson Terminal Ports and Terminals Corporate and Other Total

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

Property, plant and equipment and leasing equipment, net

Africa $ 43,348 $ — $ — $ — $ 43,348

Asia $ 445,566 $ — $ — $ — $ 56,702 $ 502,268

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Potentially dilutive securities are calculated using the treasury stock method.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

The calculation of basic and diluted EPS is presented below.

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Certain holders of Class B Units (see Note 18) converted 279,678 , 911,448 and 1,134,806 Class B Units, respectively, in exchange for 207,129 , 675,015 and 840,434 common shares, respectively, during the years ended December 31, 2021, 2020 and 2019.

We issued 24,683 common shares to certain directors as compensation during the year December 31, 2020.

At the Market Program

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 (the “ATM Program”).

We sold 1,070,000 ATM Shares at a weighted average price of $ 19.54 per share for net proceeds of $ 20.6 million during the year December 31, 2020.

In connection with the shares sold under the ATM Program, we granted options to the Manager relating to 129,988 common shares, which had a grant date fair value of $ 0.7 million.

We issued 17,155 common shares to certain directors as compensation during the year ended December 31, 2021.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

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).

In October 2021, the underwriters 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.

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

Preferred Shares

In September 2019, in a public offering, we issued 3,450,000 shares of 8.25 % Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”), par value $ 0.01 per share, with a liquidation preference of $ 25.00 per share for net proceeds of approximately $ 82.9 million.

In November 2019, in a public offering, we issued 4,600,000 shares of 8.00 % Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”), par value $ 0.01 per share, with a liquidation preference of $ 25.00 per share for net proceeds of approximately $ 111.1 million.

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

On June 30, 2020, we entered into an At Market Issuance Sales Agreement with a third party to sell shares of our Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”) and Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“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 (the “ATM Program”).

We sold 1,070,000 ATM Shares at a weighted average price of $ 19.54 per share for net proceeds of $ 20.6 million during the year ended December 31, 2020.

In connection with the shares sold under the ATM Program, we granted options to the Manager relating to 129,988 common shares, which had a grant date fair value of $ 0.7 million.

In September 2019, in a public offering, we issued 3,450,000 shares of 8.25 % Series A Preferred Shares, par value $ 0.01 per share, with a liquidation preference of $ 25.00 per share for net proceeds of approximately $ 82.9 million.

In November 2019, in a public offering, we issued 4,600,000 shares of 8.00 % Series B Preferred Shares, par value $ 0.01 per share, with a liquidation preference of $ 25.00 per share for net proceeds of approximately $ 111.1 million.

See Note 15 for information related to options issued to the Manager in connection with these offerings.

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We believe the risk of loss in connection with such arrangements is remote.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

We have also entered into an arrangement with our non-controlling interest holder of Repauno, whereby the non-controlling interest holder may receive additional payments contingent upon the achievement of certain service conditions, not to exceed $ 15.0 million.

W e recorded $ 1.0 million of related expense during the year ended December 31, 2020.

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table presents unaudited summary information for our quarterly operations:

Quarter Ended Year Ended December 31

(in thousands except share and per share data) March 31 June 30 September 30 December 31

Total revenues $ 112,840 $ 94,309 $ 83,709 $ 75,638 $ 366,496

Total expenses 111,125 111,367 107,847 130,303 460,642

Total other expense ( 6,204 ) ( 2,420 ) ( 3,557 ) ( 4,601 ) ( 16,782 )

Loss from continuing operations before income taxes ( 4,489 ) ( 19,478 ) ( 27,695 ) ( 59,266 ) ( 110,928 )

(Benefit from) provision for income taxes ( 98 ) ( 3,750 ) ( 2,486 ) 429 ( 5,905 )

Net loss from continuing operations ( 4,391 ) ( 15,728 ) ( 25,209 ) ( 59,695 ) ( 105,023 )

Net income from discontinued operations, net of income taxes 1,331 — — — 1,331

Net loss ( 3,060 ) ( 15,728 ) ( 25,209 ) ( 59,695 ) ( 103,692 )

Net loss attributable to non-controlling interests in consolidated subsidiaries:

Continuing operations ( 4,736 ) ( 4,112 ) ( 3,876 ) ( 3,798 ) ( 16,522 )

Discontinued operations — — — — —

Dividends on preferred shares 4,539 4,079 4,625 4,626 17,869

Net loss attributable to shareholders $ ( 2,863 ) $ ( 15,695 ) $ ( 25,958 ) $ ( 60,523 ) $ ( 105,039 )

(Loss) earnings per share:

Continuing operations $ ( 0.05 ) $ ( 0.18 ) $ ( 0.30 ) $ ( 0.70 ) $ ( 1.24 )

Discontinued operations $ 0.02 $ 0.00 $ 0.00 $ 0.00 $ 0.02

Continuing operations $ ( 0.05 ) $ ( 0.18 ) $ ( 0.30 ) $ ( 0.70 ) $ ( 1.24 )

Discontinued operations $ 0.02 $ 0.00 $ 0.00 $ 0.00 $ 0.02

Weighted Average Shares Outstanding:

Basic 86,008,099 86,009,959 86,022,302 86,022,302 86,015,702

Diluted 86,008,099 86,009,959 86,022,302 86,022,302 86,015,702

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in tables in thousands, unless otherwise noted)

Quarter Ended Year Ended December 31

(in thousands except share and per share data) March 31 June 30 September 30 December 31

Total revenues $ 114,894 $ 149,848 $ 152,700 $ 161,332 $ 578,774

Total expenses 123,403 164,798 169,430 173,862 631,493

Total other (expense) income ( 1,178 ) 27,630 37,338 141,061 204,851

(Loss) income from continuing operations before income taxes ( 9,687 ) 12,680 20,608 128,531 152,132

Provision for (benefit from) income taxes 267 ( 2,328 ) 872 18,999 17,810

Net (loss) income from continuing operations ( 9,954 ) 15,008 19,736 109,532 134,322

Net income from discontinued operations, net of income taxes 158 785 940 71,579 73,462

Net (loss) income ( 9,796 ) 15,793 20,676 181,111 207,784

Net (loss) income attributable to non-controlling interests in consolidated subsidiaries:

Continuing operations ( 3,360 ) ( 4,580 ) ( 5,111 ) ( 4,520 ) ( 17,571 )

Discontinued operations ( 56 ) 41 116 146 247

Dividends on preferred shares — — — 1,838 1,838

Net (loss) income attributable to shareholders $ ( 6,380 ) $ 20,332 $ 25,671 $ 183,647 $ 223,270

(Loss) earnings per share:

Continuing operations $ ( 0.07 ) $ 0.23 $ 0.29 $ 1.30 $ 1.74

Discontinued operations $ 0.00 $ 0.01 $ 0.01 $ 0.83 $ 0.85

Continuing operations $ ( 0.07 ) $ 0.23 $ 0.29 $ 1.30 $ 1.74

Discontinued operations $ 0.00 $ 0.01 $ 0.01 $ 0.83 $ 0.85

Weighted Average Shares Outstanding:

Basic 85,986,453 85,987,769 85,996,067 85,997,619 85,992,019

Diluted 85,986,453 85,989,029 86,005,604 86,090,207 86,029,363

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 year ended December 31, 2021.

The $ 5.0 million payment was included in the cost of the asset acquisition.

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

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

SUBSEQUENT EVENTS

1 unchanged sentence

On February 24, 2022, 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 December 31, 2021, payable on March 23, 2022 to the holders of record on March 11, 2022.

Additionally, on February 25, 2021, our Board of Directors declared cash dividends on the Series A Preferred Shares and Series B Preferred Shares of $ 0.52 and $ 0.50 per share, respectively, for the quarter ended December 31, 2020, payable on March 15, 2021 to the holders of record on March 8, 2021.

Additionally, on February 24, 2022, our 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, for the quarter ended December 31, 2021, payable on March 15, 2022 to the holders of record on March 7, 2022.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data