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Item 7. Management’s Discussion and Analysis

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand Fortress Transportation and Infrastructure Investors LLC. Our MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes, and with Part I, Item 1A, “Risk Factors” and “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K. 
 A discussion of our results of operations and cash flows for 2020 compared to 2019 is included in our Annual Report on Form 10-K for the year ended December 31, 2020, under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. 
 Overview 
 We own and acquire high quality infrastructure and related equipment that is essential for the transportation of goods and people globally. We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation. We believe that there is a large number of acquisition opportunities in our markets, and that our Manager’s expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities. We are externally managed by the Manager, an affiliate of Fortress, which has a dedicated team of experienced professionals focused on the acquisition of transportation and infrastructure assets since 2002. As of December 31, 2021, we had total consolidated assets of $4.9 billion and total equity of $1.1 billion. 
 While our strategy permits us to acquire a broad array of transportation-related assets, we are currently active in four sectors where we believe there are meaningful opportunities to deploy capital to achieve attractive risk adjusted returns: aviation, rail, energy and ports and terminals. 
 • Commercial air travel and air freight activity have historically been long-term growth sectors and are tied to the underlying demand for passenger and freight movement. We continue to see long-term demand for aviation related assets. 
 • The railroad market consists of short line and regional railroads in North America that provide services including haulage, switching and transportation services. 
 • Offshore energy service equipment refers to vessels supporting the extraction, processing and transportation of oil and natural gas from deposits located beneath the sea floor, as well as the ongoing inspection, repair, maintenance and ultimate abandonment of subsea wells and associated infrastructure. 
 • Land-based infrastructure refers to facilities that enable the storage, unloading, loading and movement of crude oil and refined products and LPG from producers to end users, such as refineries. Customers of land-based infrastructure typically purchase capacity on a take-or-pay basis, and the economics of these assets directly relate to the volume of throughput. 
 
 
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 Impact of COVID-19 
 Due to the outbreak of COVID-19, we have taken measures to protect the health and safety of our employees, including having employees work remotely, where possible. Market conditions due to the COVID-19 pandemic resulted in asset impairment charges and a decline in our equipment leasing revenues during the year ended December 31, 2021. A number of our lessees continue to experience increased financial stress due to the significant decline in travel demand, particularly as various regions experience spikes in COVID-19 cases. A number of these lessees have been placed on non-accrual status as of December 31, 2021; however, we believe our overall portfolio exposure is limited by maintenance reserves and security deposits which are secured against lessee defaults. The value of these deposits was $145.5 million as of December 31, 2021. As COVID-19 continues to evolve, the extent to which COVID-19 impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to try and contain COVID-19 or treat its impact. We continue to monitor the pandemic and, the extent to which the continued spread of the virus adversely affects our customer base and therefore revenue. As the COVID-19 pandemic is complex and rapidly evolving, our plans as described herein may change. At this point, we cannot reasonably estimate the duration and severity of this pandemic, which could have a material adverse impact on our business, results of operations, financial position and cash flows. For additional detail, see Liquidity and Capital Resources and Item 1A. Risk Factors—“The COVID-19 pandemic has severely disrupted the global economy and may have, and the emergence of similar crises could have, material adverse effects on our business, results of operations or financial condition.” 
 Operating Segments 
 Our operations consist of two primary strategic business units – Infrastructure and Equipment Leasing. Our Infrastructure Business acquires long-lived assets that provide mission-critical services or functions to transportation networks and typically have high barriers to entry. We target or develop operating businesses with strong margins, stable cash flows and upside from earnings growth and asset appreciation driven by increased use and inflation. Our Equipment Leasing Business acquires assets that are designed to carry cargo or people or provide functionality to transportation infrastructure. Transportation equipment assets are typically long-lived, moveable and leased by us on either operating leases or finance leases to companies that provide transportation services. Our leases generally provide for long-term contractual cash flow with high cash-on-cash yields and include structural protections to mitigate credit risk. 
 Our reportable segments are comprised of interests in different types of infrastructure and equipment leasing assets. We currently conduct our business through the following four reportable segments: (i) Aviation Leasing, which is within the Equipment Leasing Business, and (ii) Jefferson Terminal, (iii) Ports and Terminals and (iv) Transtar, which together comprise our Infrastructure Business. The Aviation Leasing segment consists of aircraft and aircraft engines held for lease and are typically held long-term. The Jefferson Terminal segment consists of a multi-modal crude and refined products terminal and other related assets. The Ports and Terminals segment consists of Repauno, which is a 1,630 acre deep-water port located along the Delaware River with an underground storage cavern, a new multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities, and an equity method investment (“Long Ridge”), which is a 1,660 acre multi-modal port located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant in operation. 
 In July 2021, we acquired Transtar, and it operates as a separate reportable segment within our Infrastructure business. Transtar is comprised of five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities. See Note 4 for additional information. 
 In December 2019, we completed the sale of Central Maine & Quebec Railway (“CMQR”), which was formerly reported as our Railroad segment. Under ASC 205-20, this disposition met the criteria to be reported as discontinued operations and the assets, liabilities and results of operations have been presented as discontinued operations for all periods presented. Additionally, in accordance with ASC 280, we assessed our reportable segments and determined that our retained investment of the railroad business no longer met the requirement as a reportable segment. Accordingly, we have presented this operating segment, along with Corporate results, within Corporate and Other effective in 2019. 
 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 operating leases, (ii) an investment in an unconsolidated entity engaged in the leasing of shipping containers, (iii) railroad assets which consist of equipment that support a railcar cleaning business and (iv) various clean technology and sustainability investments . 
 Our reportable segments are comprised of investments in different types of transportation infrastructure and equipment. Each segment requires different investment strategies. The accounting policies of the segments are the same as those described in Note 2 to the consolidated financial statements; however, financial information presented by segment includes the impact of intercompany eliminations. 
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 In the fourth quarter of 2021, the Company announced that it intends to spin off its infrastructure business as a separate publicly traded entity. The infrastructure business is expected to be spun out in an entity taxed as a corporation for U.S. federal income tax purposes and will hold, among other things, the Jefferson, Repauno, Long Ridge and Transtar assets, and will retain all related project-level debt of those entities. The infrastructure entity intends to remit to FTAI approximately $800 million in cash as part of the separation. FTAI is expected to retain the aviation business and certain other assets and FTAI's outstanding corporate indebtedness, other than any indebtedness that may be paid off in connection with the transaction. The spin off transaction is expected to be completed during the second quarter of 2022. The spin off transaction remains subject to approval by FTAI's board of directors and may not be completed on the terms described above or at all. 
 Results of Operations 
 Adjusted EBITDA (non-GAAP) 
 The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance, as well as making resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance. 
 Adjusted EBITDA is defined as net income (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. 
 
 
 
 
 
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 The following table presents our consolidated results of operations: 
 
 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Revenues 
 Equipment leasing revenues 
 Lease income $ 172,116 $ 177,476 $ 207,101 $ (5,360) $ (29,625) 
 Maintenance revenue 128,819 101,462 134,914 27,357 (33,452) 
 Finance lease income 1,747 2,260 2,648 (513) (388) 
 Other revenue 32,901 16,736 4,659 16,165 12,077 
 Total equipment leasing revenues 335,583 297,934 349,322 37,649 (51,388) 
 Infrastructure revenues 
 Lease income 2,424 1,186 3,362 1,238 (2,176) 
 Rail revenues 56,803 — — 56,803 — 
 Terminal services revenues 45,038 50,887 42,965 (5,849) 7,922 
 Crude marketing revenues — 8,210 166,134 (8,210) (157,924) 
 Other revenue 15,954 8,279 16,991 7,675 (8,712) 
 Total infrastructure revenues 120,219 68,562 229,452 51,657 (160,890) 
 Total revenues 455,802 366,496 578,774 89,306 (212,278) 
 
 Expenses 
 Operating expenses 172,464 109,512 291,572 62,952 (182,060) 
 General and administrative 17,409 18,159 16,905 (750) 1,254 
 Acquisition and transaction expenses 21,941 9,868 17,623 12,073 (7,755) 
 Management fees and incentive allocation to affiliate 16,322 18,519 36,059 (2,197) (17,540) 
 Depreciation and amortization 201,756 172,400 169,023 29,356 3,377 
 Asset impairment 10,463 33,978 4,726 (23,515) 29,252 
 Interest expense 171,036 98,206 95,585 72,830 2,621 
 Total expenses 611,391 460,642 631,493 150,749 (170,851) 
 
 Other income (expense) 
 Equity in losses of unconsolidated entities (12,734) (5,039) (2,375) (7,695) (2,664) 
 Gain (loss) on sale of assets, net 49,031 (308) 203,250 49,339 (203,558) 
 Loss on extinguishment of debt (3,254) (11,667) — 8,413 (11,667) 
 Interest income 1,711 162 531 1,549 (369) 
 Other (expense) income (10,928) 70 3,445 (10,998) (3,375) 
 Total other income (expense) 23,826 (16,782) 204,851 40,608 (221,633) 
 (Loss) income from continuing operations before income taxes (131,763) (110,928) 152,132 (20,835) (263,060) 
 (Benefit from) provision for income taxes (1,057) (5,905) 17,810 4,848 (23,715) 
 Net (loss) income from continuing operations (130,706) (105,023) 134,322 (25,683) (239,345) 
 Net income from discontinued operations, net of income taxes — 1,331 73,462 (1,331) (72,131) 
 Net (loss) income (130,706) (103,692) 207,784 (27,014) (311,476) 
 Less: Net (loss) income attributable to non-controlling interest in consolidated subsidiaries: 
 Continuing operations (26,472) (16,522) (17,571) (9,950) 1,049 
 Discontinued operations — — 247 — (247) 
 Less: Dividends on preferred shares 24,758 17,869 1,838 6,889 16,031 
 Net (loss) income attributable to shareholders $ (128,992) $ (105,039) $ 223,270 $ (23,953) $ (328,309) 

 
 
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 The following table sets forth a reconciliation of net (loss) income attributable to shareholders from continuing operations to Adjusted EBITDA: 
 
 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Net (loss) income attributable to shareholders from continuing operations $ (128,992) $ (106,370) $ 150,055 $ (22,622) $ (256,425) 
 Add: (Benefit from) provision for income taxes (1,057) (5,905) 17,810 4,848 (23,715) 
 Add: Equity-based compensation expense 4,038 2,325 1,509 1,713 816 
 Add: Acquisition and transaction expenses 21,941 9,868 17,623 12,073 (7,755) 
 Add: Losses on the modification or extinguishment of debt and capital lease obligations 3,254 11,667 — (8,413) 11,667 
 Add: Changes in fair value of non-hedge derivative instruments (2,220) 181 4,555 (2,401) (4,374) 
 Add: Asset impairment charges 10,463 33,978 4,726 (23,515) 29,252 
 Add: Incentive allocations — — 21,231 — (21,231) 
 Add: Depreciation & amortization expense (1) 
 229,734 202,746 199,185 26,988 3,561 
 Add: Interest expense 171,036 98,206 95,585 72,830 2,621 
 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 
 27,892 1,208 (1,387) 26,684 2,595 
 Less: Equity in losses of unconsolidated entities 12,734 5,039 2,375 7,695 2,664 
 Less: Non-controlling share of Adjusted EBITDA (3) 
 (12,508) (9,637) (9,859) (2,871) 222 
 Adjusted EBITDA (non-GAAP) $ 336,315 $ 243,306 $ 503,408 $ 93,009 $ (260,102) 

 __________________________________________________ 
 
 
 (1) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) depreciation and amortization expense of $201,756, $172,400 and $169,023, (ii) lease intangible amortization of $4,993, $3,747 and $7,181 and (iii) amortization for lease incentives of $22,985, $26,599 and $22,981, respectively. 
 (2) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) net loss of $(13,242), $(5,435) and $(2,563), (ii) interest expense of $5,612, $1,138 and $131, (iii) depreciation and amortization expense of $12,643, $5,513 and $1,045, (iv) acquisition and transaction expense of $104, $581 and $0, (v) changes in fair value of non-hedge derivative instruments of $19,850, $(589) and $0, (vi) asset impairment of $2,146, $0 and $0 and (vii) equity-based compensation of $779, $0 and $0, respectively. 
 (3) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) equity-based compensation of $751, $374 and $230, (ii) provision for income taxes of $52, $59 and $60, (iii) interest expense of $3,370, $2,025 and $3,400, (iv) depreciation and amortization expense of $8,411, $6,149 and $4,833, (v) changes in fair value of non-hedge derivative instruments of $(76), $38 and $1,336 and (vi) loss on extinguishment of debt of $0, $992 and $0, respectively. 
 Comparison of the years ended December 31, 2021 and 2020 
 Revenues 
 Total revenues increased $89.3 million, primarily due to the acquisition of Transtar and higher revenues in the Aviation Leasing and Ports and Terminals segments, partially offset by lower revenues in the Jefferson Terminal segment. 
 Equipment Leasing 
 • Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered. 
 • Other revenue increased $16.2 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020. 
 • Lease income decreased $5.4 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year. 
 Infrastructure 
 • Rail revenues increased $56.8 million due to the acquisition of Transtar in July 2021. 
 • Other revenue increased $7.7 million which primarily reflects (i) higher butane sales at Repauno and (ii) a gain on butane forward purchase and sale contracts at Repauno. 
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 • Crude marketing revenues decreased $8.2 million. In 2019, Jefferson directly sourced crude from producers in Canada, arranging logistics to its terminal and then marketing crude to third parties to take advantage of favorable spreads. The resulting crude sales and corresponding costs of sale, including logistical costs, are reflected in Crude marketing revenues and Operating expenses, respectively. Jefferson exited this crude marketing strategy in the fourth quarter of 2019 as a result of unfavorable oil spreads and as certain logistical commitments expired. Revenues in 2020 include contracts executed in 2019 but delivered in 2020. 
 • Terminal services revenue decreased $5.8 million which primarily reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19. 
 Expenses 
 Total expenses increased $150.7 million primarily due to increases in (i) interest expense, (ii) operating expenses, (iii) depreciation and amortization and (iv) acquisition and transaction expenses, partially offset by a decrease in (v) asset impairment. 
 Interest expense increased $72.8 million primarily due to: 
 • an increase of $67.6 million in Corporate and Other primarily which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which was redeemed in full in May 2021; and 
 • an increase of $5.4 million at Jefferson Terminal due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement. See Note 10 to the consolidated financial statements for additional information. 
 Operating expenses increased $63.0 million primarily due to: 
 • an increase of $29.0 million due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expense; 
 • an increase in bad debt expense of $9.4 million in the Aviation Leasing segment; 
 • an increase in cost of sales and other associated costs of $6.8 million, which primarily reflects (i) an increase of $17.2 million in the Aviation Leasing segment due to costs associated with the sale of engine parts, partially offset by (ii) a decrease of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (iii) a decrease of $2.3 million at Repauno; and 
 • an increase in shipping and storage expense of $4.6 million primarily in the Aviation Leasing segment. 
 Depreciation and amortization increased $29.4 million which primarily reflects (i) an increase of $14.5 million due to additional assets placed into service at Repauno and Jefferson Terminal and (ii) an increase of $8.3 million due to the acquisition of Transtar. 
 Acquisition and transaction expenses increased $12.1 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives. 
 Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021, primarily related to early lease terminations, in the Aviation Leasing segment. 
 Other income 
 Total other income increased $40.6 million which primarily reflects: 
 • an increase of $49.3 million in gains on sale of assets, net due to asset sales in the Aviation Leasing segment; 
 • a decrease in loss on extinguishment of debt of $8.4 million; 
 • an increase in other expense of $11.0 million primarily due to a write-off of an earn-out receivable at Long Ridge and losses related to crude oil forward transactions at Jefferson Terminal; and 
 • an increase of $7.7 million in equity in losses of unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge. 
 Provision for income taxes 
 The benefit from income taxes decreased $4.8 million primarily due to the acquisition of Transtar and a higher provision in the Aviation Leasing segment. 
 Net (loss) income from continuing operations 
 Net loss from continuing operations increased $25.7 million primarily due to the changes noted above. 
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 Adjusted EBITDA (non-GAAP) 
 Adjusted EBITDA increased $93.0 million primarily due to the changes noted above. 
 
 Aviation Leasing 
 As of December 31, 2021, in our Aviation Leasing segment, we own and manage 315 aviation assets, consisting of 108 commercial aircraft and 207 engines. 
 As of December 31, 2021, 91 of our commercial aircraft and 140 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease. Our aviation equipment was approximately 78% utilized during the three months ended December 31, 2021, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes. Our aircraft currently have a weighted average remaining lease term of 44 months, and our engines currently on-lease have an average remaining lease term of 18 months. The table below provides additional information on the assets in our Aviation Leasing segment: 
 
 Aviation Assets Widebody Narrowbody Total 
 Aircraft 
 Assets at January 1, 2021 15 63 78 
 Purchases 1 51 52 
 Sales (4) — (4) 
 Transfers 1 (19) (18) 
 Assets at December 31, 2021 13 95 108 
 
 Engines 
 Assets at January 1, 2021 88 98 186 
 Purchases 11 49 60 
 Sales (29) (27) (56) 
 Transfers (2) 19 17 
 Assets at December 31, 2021 68 139 207 

 
 
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 The following table presents our results of operations for our Aviation Leasing segment: 
 
 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 
 Equipment leasing revenues 
 Lease income $ 161,985 $ 166,331 $ 197,305 $ (4,346) $ (30,974) 
 Maintenance revenue 128,819 101,462 134,914 27,357 (33,452) 
 Finance lease income 1,747 2,260 2,648 (513) (388) 
 Other revenue 28,871 11,158 1,808 17,713 9,350 
 Total revenues 321,422 281,211 336,675 40,211 (55,464) 
 
 Expenses 
 Operating expenses 56,072 20,667 17,668 35,405 2,999 
 
 Acquisition and transaction expenses 3,840 6,687 8,641 (2,847) (1,954) 
 
 Depreciation and amortization 139,972 133,904 128,990 6,068 4,914 
 Asset impairment 10,463 33,978 — (23,515) 33,978 
 
 Total expenses 210,347 195,236 155,299 15,111 39,937 
 
 Other (expense) income 
 Equity in losses of unconsolidated entities (1,403) (1,932) (1,829) 529 (103) 
 Gain (loss) on sale of assets, net 49,015 (300) 81,954 49,315 (82,254) 
 Interest income 1,153 94 104 1,059 (10) 
 Other expense (1,680) — — (1,680) — 
 Total other income (expense) 47,085 (2,138) 80,229 49,223 (82,367) 
 Income before income taxes 158,160 83,837 261,605 74,323 (177,768) 
 Provision for (benefit from) income taxes 935 (4,812) 2,826 5,747 (7,638) 
 Net income 157,225 88,649 258,779 68,576 (170,130) 
 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — 
 Net income attributable to shareholders $ 157,225 $ 88,649 $ 258,779 $ 68,576 $ (170,130) 

 
 
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 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: 
 
 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Net income attributable to shareholders $ 157,225 $ 88,649 $ 258,779 $ 68,576 $ (170,130) 
 Add: Provision for (benefit from) income taxes 935 (4,812) 2,826 5,747 (7,638) 
 Add: Equity-based compensation expense — — — — — 
 Add: Acquisition and transaction expenses 3,840 6,687 8,641 (2,847) (1,954) 
 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — 
 Add: Changes in fair value of non-hedge derivative instruments — — — — — 
 Add: Asset impairment charges 10,463 33,978 — (23,515) 33,978 
 Add: Incentive allocations — — — — — 
 Add: Depreciation and amortization expense (1) 
 167,950 164,250 159,152 3,700 5,098 
 Add: Interest expense — — — — — 
 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 
 (1,203) (1,932) (1,829) 729 (103) 
 Less: Equity in losses of unconsolidated entities 1,403 1,932 1,829 (529) 103 
 Less: Non-controlling share of Adjusted EBITDA — — — — — 
 Adjusted EBITDA (non-GAAP) $ 340,613 $ 288,752 $ 429,398 $ 51,861 $ (140,646) 

 __________________________________________________ 
 (1) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) depreciation expense of $139,972, $133,904 and $128,990, (ii) lease intangible amortization of $4,993, $3,747 and $7,181 and (iii) amortization for lease incentives of $22,985, $26,599 and $22,981, respectively. 
 (2) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) net loss of $(1,403), $(1,932) and $(1,829) and (ii) depreciation and amortization of $200, $0 and $0, respectively. 
 Comparison of the years ended December 31, 2021 and 2020 
 Revenues 
 Total revenues increased $40.2 million driven by higher maintenance revenue and other revenue partially offset by lower lease income. 
 • Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered. 
 • Other revenue increased $17.7 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020. 
 • Lease income decreased $4.3 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year. 
 
 
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 Expenses 
 Total expenses increased $15.1 million primarily due to an increase in operating expenses and depreciation and amortization expense, partially offset by a decrease in asset impairment and acquisition and transaction expense. 
 • Operating expenses increased $35.4 million primarily as a result of an increase in costs associated with the sale of engine parts, bad debt expense, shipping and storage fees and other operating expenses. 
 • Depreciation and amortization expense increased $6.1 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool. 
 • Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021 which are primarily related to early lease terminations. See Note 5 to the consolidated financial statements for additional information. 
 • Acquisition and transaction expense decreased $2.8 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment. 
 Other income 
 Total other income increased $49.2 million primarily due to an increase of $49.3 million in gain on the sale of leasing equipment in 2021, an increase of $1.1 million in interest income and a decrease of $0.5 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss, partially offset by an increase of $1.7 million in other expenses. 
 Adjusted EBITDA (non-GAAP) 
 Adjusted EBITDA increased $51.9 million primarily due to the changes noted above. 
 
 Jefferson Terminal 
 The following table presents our results of operations for our Jefferson Terminal segment: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Infrastructure revenues 
 Lease income $ 1,688 $ 1,186 $ 2,306 $ 502 $ (1,120) 
 
 Terminal services revenues 44,664 50,887 35,908 (6,223) 14,979 
 Crude marketing revenues — 8,210 166,134 (8,210) (157,924) 
 
 
 Total revenues 46,352 60,283 204,348 (13,931) (144,065) 
 
 Expenses 
 Operating expenses 48,255 53,072 231,506 (4,817) (178,434) 
 
 
 
 Depreciation and amortization 36,013 29,034 22,873 6,979 6,161 
 Interest expense 14,812 9,426 16,189 5,386 (6,763) 
 Total expenses 99,080 91,532 270,568 7,548 (179,036) 
 
 Other (expense) income 
 Equity in losses of unconsolidated entities — — (292) — 292 
 (Loss) gain on sale of assets, net — (8) 4,636 8 (4,644) 
 Loss on extinguishment of debt — (4,724) — 4,724 (4,724) 
 Interest income — 22 118 (22) (96) 
 Other (expense) income (4,726) 70 634 (4,796) (564) 
 Total other (expense) income (4,726) (4,640) 5,096 (86) (9,736) 
 Loss before income taxes (57,454) (35,889) (61,124) (21,565) 25,235 
 Provision for income taxes 230 278 284 (48) (6) 
 Net loss (57,684) (36,167) (61,408) (21,517) 25,241 
 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (26,250) (16,483) (17,356) (9,767) 873 
 Net loss attributable to shareholders $ (31,434) $ (19,684) $ (44,052) $ (11,750) $ 24,368 

 
 
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 The following table sets forth a reconciliation of net loss attributable to shareholders to Adjusted EBITDA: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Net loss attributable to shareholders $ (31,434) $ (19,684) $ (44,052) $ (11,750) $ 24,368 
 Add: Provision for income taxes 230 278 284 (48) (6) 
 Add: Equity-based compensation expense 3,215 1,676 1,054 1,539 622 
 Add: Acquisition and transaction expenses — — — — — 
 Add: Losses on the modification or extinguishment of debt and capital lease obligations — 4,724 — (4,724) 4,724 
 Add: Changes in fair value of non-hedge derivative instruments — 181 6,364 (181) (6,183) 
 Add: Asset impairment charges — — — — — 
 Add: Incentive allocations — — — — — 
 Add: Depreciation and amortization expense 36,013 29,034 22,873 6,979 6,161 
 Add: Interest expense 14,812 9,426 16,189 5,386 (6,763) 
 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 
 — — 656 — (656) 
 Less: Equity in losses of unconsolidated entities — — 292 — (292) 
 Less: Non-controlling share of Adjusted EBITDA (2) 
 (12,205) (9,517) (9,820) (2,688) 303 
 Adjusted EBITDA (non-GAAP) $ 10,631 $ 16,118 $ (6,160) $ (5,487) $ 22,278 

 __________________________________________________ 
 
 
 (1) Includes the following items for the year ended December 31, 2019: (i) net loss of $(349) and (ii) depreciation and amortization expense of $1,005. 
 (2) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) equity-based compensation of $723, $352 and $221, (ii) provision for income taxes of $52, $59 and $60, (iii) interest expense of $3,331, $1,979 and $3,400, (iv) changes in fair value of non-hedge derivative instruments of $0, $38 and $1,336, (v) depreciation and amortization expense of $8,099, $6,097 and $4,803 and (vi) loss on extinguishment of debt of $0, $992 and $0, respectively. 
 Comparison of the years ended December 31, 2021 and 2020 
 Revenues 
 Total revenues decreased $13.9 million which primarily reflects (i) a decrease in crude marketing revenue of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) a decrease in terminal services revenues of $6.2 million which reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19. 
 Expenses 
 Total expenses increased $7.5 million which reflects: 
 • an increase in depreciation and amortization of $7.0 million due to additional assets placed into service; 
 • an increase in interest expense of $5.4 million due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement; and 
 • a decrease in operating expenses of $4.8 million which primarily reflects (i) a decrease in cost of sales due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019, a portion of which was recognized in 2020, partially offset by (ii) higher insurance and other facility operating expenses. 
 Other (expense) income 
 Other expense increased $4.8 million due to losses related to crude oil forward transactions. 
 Loss on extinguishment of debt decreased $4.7 million due to a debt refinancing in 2020. See Note 10 to the consolidated financial statements for additional information. 
 Adjusted EBITDA (non-GAAP) 
 Adjusted EBITDA decreased $5.5 million primarily due to the changes noted above. 
 
 
 
 51 

 
 

 Ports and Terminals 
 The following table presents our results of operations for our Ports and Terminals segment: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 
 Infrastructure revenues 
 Lease income $ — $ — $ 1,056 $ — $ (1,056) 
 
 Terminal services revenues 374 — 7,057 374 (7,057) 
 Other revenue 11,243 3,855 14,074 7,388 (10,219) 
 
 Total revenues 11,617 3,855 22,187 7,762 (18,332) 
 
 Expenses 
 Operating expenses 14,403 10,327 24,854 4,076 (14,527) 
 
 Acquisition and transaction expenses — 907 5,008 (907) (4,101) 
 
 Depreciation and amortization 9,052 1,497 9,849 7,555 (8,352) 
 Asset impairment — — 4,726 — (4,726) 
 Interest expense 1,147 1,335 1,712 (188) (377) 
 Total expenses 24,602 14,066 46,149 10,536 (32,083) 
 
 Other (expense) income 
 Equity in losses of unconsolidated entities (11,429) (3,222) (192) (8,207) (3,030) 
 Gain on sale of assets, net 16 — 116,660 16 (116,660) 
 Interest income 318 — 289 318 (289) 
 Other (expense) income (4,100) — 1,809 (4,100) (1,809) 
 Total other (expense) income (15,195) (3,222) 118,566 (11,973) (121,788) 
 (Loss) income before income taxes (28,180) (13,433) 94,604 (14,747) (108,037) 
 (Benefit from) provision for income taxes (3,749) (1,791) 14,700 (1,958) (16,491) 
 Net (loss) income (24,431) (11,642) 79,904 (12,789) (91,546) 
 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (222) (39) (215) (183) 176 
 Net (loss) income attributable to shareholders $ (24,209) $ (11,603) $ 80,119 $ (12,606) $ (91,722) 

 
 
 52 

 
 

 The following table sets forth a reconciliation of net (loss) income attributable to shareholders to Adjusted EBITDA: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Net (loss) income attributable to shareholders $ (24,209) $ (11,603) $ 80,119 $ (12,606) $ (91,722) 
 Add: (Benefit from) provision for income taxes (3,749) (1,791) 14,700 (1,958) (16,491) 
 Add: Equity-based compensation expense 823 649 455 174 194 
 Add: Acquisition and transaction expenses — 907 5,008 (907) (4,101) 
 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — 
 Add: Changes in fair value of non-hedge derivative instruments (2,220) — (1,809) (2,220) 1,809 
 Add: Asset impairment charges — — 4,726 — (4,726) 
 Add: Incentive allocations — — — — — 
 Add: Depreciation and amortization expense 9,052 1,497 9,849 7,555 (8,352) 
 Add: Interest expense 1,147 1,335 1,712 (188) (377) 
 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 
 29,405 3,304 (153) 26,101 3,457 
 Less: Equity in losses of unconsolidated entities 11,429 3,222 192 8,207 3,030 
 Less: Non-controlling share of Adjusted EBITDA (2) 
 (303) (120) (39) (183) (81) 
 Adjusted EBITDA (non-GAAP) $ 21,375 $ (2,600) $ 114,760 $ 23,975 $ (117,360) 

 __________________________________________________ 
 
 
 (1) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) net loss of $(11,430), $(3,222) and $(193), (ii) depreciation expense of $12,443, $5,513 and $40, (iii) interest expense of $5,513, $1,021 and $0, (iv) acquisition and transaction expense of $104, $581 and $0, (v) changes in fair value of non-hedge derivative instruments of $19,850, $(589) and $0, (vi) asset impairment of $2,146, $0 and $0 and (vii) equity-based compensation of $779, $0 and $0, respectively. 
 (2) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) equity-based compensation of $28, $22 and $9, (ii) interest expense of $39, $46 and $0, (iii) depreciation expense of $312, $52 and $30 and (iv) changes in fair value of non-hedge derivative instruments of $(76), $0 and $0, respectively. 
 Comparison of the years ended December 31, 2021 and 2020 
 Revenues 
 Total revenues increased $7.8 million, primarily due to (i) an increase in butane sales of $5.2 million at Repauno, (ii) a gain of $2.2 million on butane forward purchase contracts at Repauno and (iii) an increase of $0.4 million due to the commencement of transloading at Repauno . 
 Expenses 
 Total expenses increased $10.5 million primarily due to: 
 • an increase in operating expenses of $4.1 million which primarily reflects increases in (i) property taxes due to new assets at Repauno, (ii) facility operating expenses due to higher butane volumes, (iii) compensation and benefits due to additional headcount at Repauno and (iv) professional fees; 
 • an increase in depreciation expense of $7.6 million due to assets being placed into service at Repauno; and 
 • a decrease in acquisition and transaction expense of $0.9 million due to no acquisition transactions in 2021. 
 Other expense 
 Total other expense increased $12.0 million primarily due to increases in (i) other expense due to the write-off of an earn-out receivable of $4.1 million at Long Ridge and (ii) equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge. 
 Benefit from income taxes 
 The benefit from income taxes increased $2.0 million which primarily reflects a deferred tax benefit due to higher pre-tax losses in 2021. 
 Adjusted EBITDA (non-GAAP) 
 Adjusted EBITDA increased $24.0 million primarily due to (i) an increase in the Pro-rata share of Adjusted EBITDA from unconsolidated entities and (ii) the changes noted above. 
 53 

 
 
 

 
 
 Transtar 
 On July 28, 2021, we completed the acquisition for 100% of the equity interests of Transtar from U.S. Steel (“USS”) for total cash consideration of $636.0 million. Transtar is comprised of five freight railroads and one switching company, of which two railroads are connected to USS's largest production facilities. See Note 4 to the consolidated financial statements for additional information. 
 The following table presents our results of operations for our Transtar segment: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 
 Infrastructure revenues 
 Lease income $ 736 $ — $ — $ 736 $ — 
 Rail revenues 56,803 — — 56,803 — 
 
 
 
 Total revenues 57,539 — — 57,539 — 
 
 Expenses 
 Operating expenses 28,987 — — 28,987 — 
 
 Acquisition and transaction expenses 2,841 — — 2,841 — 
 
 Depreciation and amortization 8,320 — — 8,320 — 
 
 Interest expense 53 — — 53 — 
 Total expenses 40,201 — — 40,201 — 
 
 Other expense 
 
 
 
 Other expense (423) — — (423) — 
 Total other expense (423) — — (423) — 
 Income before income taxes 16,915 — — 16,915 — 
 Provision for income taxes 1,602 — — 1,602 — 
 Net income 15,313 — — 15,313 — 
 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — 
 Net income attributable to shareholders $ 15,313 $ — $ — $ 15,313 $ — 

 
 
 54 

 
 

 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Net income attributable to shareholders $ 15,313 $ — $ — $ 15,313 $ — 
 Add: Provision for income taxes 1,602 — — 1,602 — 
 Add: Equity-based compensation expense — — — — — 
 Add: Acquisition and transaction expenses 2,841 — — 2,841 — 
 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — 
 Add: Changes in fair value of non-hedge derivative instruments — — — — — 
 Add: Asset impairment charges — — — — — 
 Add: Incentive allocations — — — — — 
 Add: Depreciation and amortization expense 8,320 — — 8,320 — 
 Add: Interest expense 53 — — 53 — 
 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — 
 Less: Equity in losses of unconsolidated entities — — — — — 
 Less: Non-controlling share of Adjusted EBITDA — — — — — 
 Adjusted EBITDA (non-GAAP) $ 28,129 $ — $ — $ 28,129 $ — 

 
 
 Financial results for the year ended December 31, 2021 
 Revenues 
 Total revenues were $57.5 million, which primarily consists of switching, interline, and ancillary rail services. 
 Expenses 
 Total expenses were $40.2 million, which primarily consists of (i) operating expenses of $29.0 million which primarily includes compensation and benefits of $19.0 million and facility operating expense of $7.0 million and (ii) depreciation and amortization of $8.3 million. 
 Adjusted EBITDA (non-GAAP) 
 Adjusted EBITDA was $28.1 million primarily due to the activity noted above. 
 55 

 
 
 

 Corporate and Other 
 The following table presents our results of operations: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Revenues 
 Equipment leasing revenues 
 Lease income $ 10,131 $ 11,145 $ 9,796 $ (1,014) $ 1,349 
 
 Other revenue 4,030 5,578 2,851 (1,548) 2,727 
 Total equipment leasing revenues 14,161 16,723 12,647 (2,562) 4,076 
 Infrastructure revenues 
 Other revenue 4,711 4,424 2,917 287 1,507 
 Total infrastructure revenues 4,711 4,424 2,917 287 1,507 
 Total revenues 18,872 21,147 15,564 (2,275) 5,583 
 
 Expenses 
 Operating expenses 24,747 25,446 17,544 (699) 7,902 
 General and administrative 17,409 18,159 16,905 (750) 1,254 
 Acquisition and transaction expenses 15,260 2,274 3,974 12,986 (1,700) 
 Management fees and incentive allocation to affiliate 16,322 18,519 36,059 (2,197) (17,540) 
 Depreciation and amortization 8,399 7,965 7,311 434 654 
 Interest expense 155,024 87,445 77,684 67,579 9,761 
 Total expenses 237,161 159,808 159,477 77,353 331 
 
 Other (expense) income 
 Equity in earnings (losses) of unconsolidated entities 98 115 (62) (17) 177 
 
 Loss on extinguishment of debt (3,254) (6,943) — 3,689 (6,943) 
 Interest income 240 46 20 194 26 
 Other income 1 — 1,002 1 (1,002) 
 Total other (expense) income (2,915) (6,782) 960 3,867 (7,742) 
 Loss before income taxes (221,204) (145,443) (142,953) (75,761) (2,490) 
 (Benefit from) provision for income taxes (75) 420 — (495) 420 
 Net loss (221,129) (145,863) (142,953) (75,266) (2,910) 
 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — 
 Less: Dividends on preferred shares 24,758 17,869 1,838 6,889 16,031 
 Net loss attributable to shareholders $ (245,887) $ (163,732) $ (144,791) $ (82,155) $ (18,941) 

 
 
 56 

 
 

 The following table sets forth a reconciliation of net loss attributable to shareholders to Adjusted EBITDA: 
 
 Year Ended December 31, Change 
 (in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19 
 Net loss attributable to shareholders $ (245,887) $ (163,732) $ (144,791) $ (82,155) $ (18,941) 
 Add: (Benefit from) provision for income taxes (75) 420 — (495) 420 
 Add: Equity-based compensation expense — — — — — 
 Add: Acquisition and transaction expenses 15,260 2,274 3,974 12,986 (1,700) 
 Add: Losses on the modification or extinguishment of debt and capital lease obligations 3,254 6,943 — (3,689) 6,943 
 Add: Changes in fair value of non-hedge derivative instruments — — — — — 
 Add: Asset impairment charges — — — — — 
 Add: Incentive allocations — — 21,231 — (21,231) 
 Add: Depreciation and amortization expense 8,399 7,965 7,311 434 654 
 Add: Interest expense 155,024 87,445 77,684 67,579 9,761 
 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 
 (310) (164) (61) (146) (103) 
 Less: Equity in (earnings) losses of unconsolidated entities (98) (115) 62 17 (177) 
 Less: Non-controlling share of Adjusted EBITDA — — — — — 
 Adjusted EBITDA (non-GAAP) $ (64,433) $ (58,964) $ (34,590) $ (5,469) $ (24,374) 

 __________________________________________________ 
 (1) Includes the following items for the years ended December 31, 2021, 2020 and 2019: (i) net loss of $(409), $(281) and $(192) and (ii) interest expense of $99, $117 and $131, respectively. 
 Comparison of the years ended December 31, 2021 and 2020 
 Revenues 
 Equipment leasing revenues decreased $2.6 million in our offshore business as one of our vessels was on hire longer in 2020 compared to 2021. 
 Expenses 
 Total expenses increased $77.4 million due to higher (i) interest expense and (ii) acquisition and transaction expenses, partially offset by lower (iii) management fees and incentive allocation to affiliate. 
 Interest expense increased $67.6 million which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which was redeemed in full in May 2021. 
 Acquisition and transaction expenses increased $13.0 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives. 
 Management fees and incentive allocation to affiliate decreased $2.2 million which reflects a decrease in the base management fee as our average total equity was lower in 2021 compared to 2020. 
 Other (expense) income 
 Other expense decreased $3.9 million primarily due to a lower loss on extinguishment of debt of $3.7 million. 
 Adjusted EBITDA (non-GAAP) 
 Adjusted EBITDA decreased $5.5 million primarily due to the changes noted above. 
 57 

 
 
 

 Transactions with Affiliates and Affiliated Entities 
 We are managed by the Manager, an affiliate of Fortress, pursuant to the Management Agreement which provides for us to bear obligations for management fees and expense reimbursements payable to the Manager. Our Management Agreement requires our Manager to manage our business affairs in conformity with a broad asset acquisition strategy adopted and monitored by our board of directors. From time to time, we may engage (subject to our strategy) in material transactions with our Manager or another entity managed by our Manager or one of its affiliates or other affiliates of Fortress, which may include, but are not limited to, certain financing arrangements, acquisition of assets, acquisition of debt obligations, debt, co-investments, and other assets that present an actual, potential or perceived conflict of interest. Please see Note 18 to our consolidated financial statements included elsewhere in this filing for more information. 
 Geographic Information 
 Please refer to Note 19 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers, for the years ended December 31, 2021, 2020 and 2019, as well as a report, by geographic area for each segment, of our total property, plant and equipment and equipment held for lease as of December 31, 2021 and 2020. 
 
 
 
 
 Liquidity and Capital Resources 
 In April 2021, we issued $500 million aggregate principal amount of senior unsecured notes due 2028 (see Note 10 to the consolidated financial statements). On May 7, 2021, we used a portion of the net proceeds to redeem in full the Senior Notes due 2022, which totaled $400 million aggregate principal plus accrued and unpaid interest. 
 In July 2021, we entered into a senior unsecured bridge term loan facility (the “Bridge Loans”) in an aggregate principal amount of $650 million in order to finance the acquisition of Transtar, which closed on July 28, 2021. We issued new equity and debt in September 2021, as described below, and repaid in full the Bridge Loans. 
 In August 2021, Jefferson issued $425 million aggregate principal amount of Series 2021 Bonds (see Note 10 to the consolidated financial statements). Jefferson used a portion of the net proceeds from the Series 2021 Bonds to repay certain indebtedness, and intends to use a portion of the net proceeds to pay for or reimburse the cost of development, construction and acquisition of certain facilities. 
 In September 2021, we issued 12,000,000 common shares and received net proceeds of approximately $291.7 million after deducting underwriting discounts and offering expenses (see Note 20 to the consolidated financial statements). The proceeds were used to repay a portion of the Bridge Loans. Additionally, in October 2021, the underwriters exercised an option to purchase an additional 1,283,863 common shares and we received net proceeds of approximately $31 million. 
 In September 2021, we issued an additional $500 million aggregate principal amount of the Senior Notes due 2028 (see Note 10 to the consolidated financial statements). We used a portion of the net proceeds to repay in full the Bridge Loans. 
 In December 2021, we entered into an agreement for senior secured bridge term loans (“2021 Bridge Loans”) in an aggregate principal amount of $350 million, which we used to finance or refinance certain assets. 
 We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times. This includes limiting discretionary spending across the organization and re-prioritizing our capital projects amid the COVID-19 pandemic. 
 Our principal uses of liquidity have been and continue to be (i) acquisitions or expansion of transportation infrastructure and equipment, (ii) distributions to our shareholders, (iii) expenses associated with our operating activities and (iv) debt service obligations associated with our investments. 
 • Cash used for the purpose of making investments was $1.5 billion, $597.5 million and $942.5 million during the years ended December 31, 2021, 2020, and 2019, respectively. 
 • Distributions to shareholders, including cash dividends, were $142.8 million, $131.4 million and $115.4 million during the years ended December 31, 2021, 2020 and 2019, respectively. 
 • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities. Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities. 
 Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our transportation infrastructure and equipment assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales. 
 • Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $16.9 million, $110.3 million and $229.7 million during the years ended December 31, 2021, 2020, and 2019, respectively. 
 • During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1.0 billion, (ii) Revolving Credit Facility of $690.0 million, (iii) Bridge Loan Agreement of $650.0 million, (iv) 
 58 

 
 

 Series 2021 Bonds of $425.0 million, (v) 2021 Bridge Loans of $100.5 million and (vi) EB-5 Loan Agreement of $26.1 million. We made principal payments of $1.6 billion related to the Bridge Loan Agreement, Revolving Credit Facility and Senior Notes due 2022. 
 During the year ended December 31, 2020, additional borrowings were obtained in connection with the (i) Senior Notes due 2025 of $407.0 million, (ii) Senior Notes due 2027 of $400.0 million, (iii) Revolving Credit Facility of $270.0 million and (iv) Series 2020 Bonds of $264.0 million. We made principal payments of $852.2 million related to the Senior Notes due 2022, Revolving Credit Facility, Series 2016 Bonds, Jefferson Revolver, Series 2012 Bonds and FTAI Pride Credit Agreement. 
 During the year ended December 31, 2019, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $250.0 million, (ii) LREG Credit Agreement of $173.5 million, (iii) Senior Notes due 2025 of $148.7 million, (iv) Senior Notes due 2022 of $147.8 million, (v) DRP Revolver of $25.0 million, (vi) Jefferson Revolver of $23.2 million and (vii) CMQR Credit Agreement of $20.9 million. We made principal payments of $405.1 million primarily related to the Revolving Credit Facility, Jefferson Revolver and CMQR Credit Agreement. 
 • Proceeds from the sale of subsidiaries and assets were $163.4 million, $72.2 million and $432.3 million during the years ended December 31, 2021, 2020, and 2019, respectively. 
 • Proceeds from the issuance of common shares, net of issuance costs were $323.1 million during the year ended December 31, 2021. There were no issuances of common shares in 2020 or 2019. 
 • Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $101.2 million, $19.7 million and $194.0 million during the years ended December 31, 2021, 2020 and 2019, respectively. 
 Our net cash provided by operating activities has been less than the amount of distributions to our shareholders. Our board of directors takes this and other factors into account as part of any decision to pay a dividend, and the timing and amount of any future dividend is subject to change at the discretion of our board of directors. 
 We are currently evaluating several potential Infrastructure and Equipment Leasing transactions, which could occur within the next 12 months. However, as of the date of this filing, none of these transactions or negotiations are definitive or included within our planned liquidity needs. We cannot assure if or when any such transaction will be consummated or the terms of any such transaction. 
 Historical Cash Flow 
 The following table presents our historical cash flow: 
 Year Ended December 31, 
 (in thousands) 2021 2020 2019 
 Cash flow data: 
 Net cash (used in) provided by operating activities $ (22,044) $ 63,106 $ 151,043 
 Net cash used in investing activities (1,286,958) (509,123) (495,236) 
 Net cash provided by financing activities 1,587,645 364,918 465,873 

 Comparison of the years ended December 31, 2021 and 2020 
 Net cash used in operating activities increased $85.2 million, which primarily reflects (i) an increase in net loss of $27.0 million, primarily due to higher interest expense and operating expenses, partially offset by higher revenue and (ii) certain adjustments to reconcile net loss to cash used in operating activities including, gain on sale of assets, net of $49.3 million, security deposits and maintenance claims included in earnings of $32.7 million, depreciation and amortization of $29.4 million and asset impairment of $23.5 million. 
 Net cash used in investing activities increased $777.8 million primarily due to (i) the acquisition of Transtar, net of cash acquired of $627.1 million, (ii) an increase in acquisitions of leasing equipment of $251.0 million and (iii) an increase in investment in unconsolidated entities of $50.0 million, partially offset by (iv) a decrease in acquisitions of property, plant and equipment of $107.5 million and (v) an increase in proceeds from the sale of leasing equipment of $86.8 million. 
 Net cash provided by financing activities increased $1.2 billion primarily due to (i) an increase in proceeds from debt of $1.6 billion, (ii) an increase in proceeds from the issuance of common shares, net of $323.1 million and (iii) an increase in proceeds from the issuance of preferred shares, net of $81.5 million, partially offset by (iv) an increase in repayments of debt of $701.0 million. 
 Funds Available for Distribution (non-GAAP) 
 We use Funds Available for Distribution (“FAD”) in evaluating our ability to meet our stated dividend policy. We believe FAD is a useful metric for investors and analysts for similar purposes. FAD is not a financial measure in accordance with U.S. GAAP. The U.S. GAAP measure most directly comparable to FAD is net cash provided by operating activities. 
 59 

 
 

 We define FAD as: net cash provided by operating activities plus principal collections on finance leases, proceeds from sale of assets, and return of capital distributions from unconsolidated entities, less required payments on debt obligations and capital distributions to non-controlling interest, and excluding changes in working capital. The following table sets forth a reconciliation of net cash provided by operating activities to FAD: 
 
 Year Ended December 31, 
 (in thousands) 2021 2020 2019 
 Net cash (used in) provided by operating activities 
 $ (22,044) $ 63,106 $ 151,043 
 Add: Principal collections on finance leases 
 7,387 13,823 13,398 
 Add: Proceeds from sale of assets 
 163,421 72,175 432,273 
 Add: Return of capital distributions from unconsolidated entities 
 — — 1,555 
 Less: Required payments on debt obligations (1) 
 — — (36,559) 
 Less: Capital distributions to non-controlling interest 
 — — — 
 Exclude: Changes in working capital 
 93,422 88,314 4,726 
 Funds Available for Distribution (FAD) 
 $ 242,186 $ 237,418 $ 566,436 

 _____________________________________________________ 
 
 
 (1) Required payments on debt obligations for the year ended December 31, 2021 exclude repayments of $650,000 for the Bridge Loan Agreement, $500,527 for the Revolving Credit Facility and $402,704 for the Senior Notes due 2022, and for the year ended December 31, 2020 exclude repayments of $306,206 for the Senior Notes due 2022, $270,000 for the Revolving Credit Facility, $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement, and for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit Facility and $18,572 for the CMQR Credit Agreement, all of which were voluntary refinancings as repayments of these amounts were not required at such time. 
 Limitations 
 FAD is subject to a number of limitations and assumptions and there can be no assurance that we will generate FAD sufficient to meet our intended dividends. FAD has material limitations as a liquidity measure because such measure excludes items that are required elements of our net cash provided by operating activities as described below. FAD should not be considered in isolation nor as a substitute for analysis of our results of operations under U.S. GAAP, and it is not the only metric that should be considered in evaluating our ability to meet our stated dividend policy. Specifically: 
 • FAD does not include equity capital called from our existing limited partners, proceeds from any debt issuance or future equity offering, historical cash and cash equivalents and expected investments in our operations. 
 • FAD does not give pro forma effect to prior acquisitions, certain of which cannot be quantified. 
 • While FAD reflects the cash inflows from sale of certain assets, FAD does not reflect the cash outflows to acquire assets as we rely on alternative sources of liquidity to fund such purchases. 
 • FAD does not reflect expenditures related to capital expenditures, acquisitions and other investments as we have multiple sources of liquidity and intend to fund these expenditures with future incurrences of indebtedness, additional capital contributions and/or future issuances of equity. 
 • FAD does not reflect any maintenance capital expenditures necessary to maintain the same level of cash generation from our capital investments. 
 • FAD does not reflect changes in working capital balances as management believes that changes in working capital are primarily driven by short term timing differences, which are not meaningful to our distribution decisions. 
 • Management has significant discretion to make distributions, and we are not bound by any contractual provision that requires us to use cash for distributions. 
 If such factors were included in FAD, there can be no assurance that the results would be consistent with our presentation of FAD. 
 
 Contractual Obligations and Cash Requirements 
 Our material cash requirements include the following contractual and other obligations: 
 Debt Obligations — As of December 31, 2021, we had outstanding principal and interest payment obligations of $3.3 billion and $1.2 billion, respectively, of which, $100.5 million and $185.4 million, respectively, are due in the next twelve months. See Note 10 to the consolidated financial statements for additional information about our debt obligations. 
 Lease Obligations — As of December 31, 2021, we had outstanding operating and finance lease obligations of $182.2 million, of which, $10.7 million is due in the next twelve months. 
 Other Obligations — As of December 31, 2021, in connection with a pipeline capacity agreement at Jefferson Terminal, we had an obligation to pay a minimum of $10.2 million in marketing fees in the next twelve months. 
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 Other Cash Requirements — In addition to our contractual obligations, we pay quarterly cash dividends on our common shares and preferred shares, which are subject to change at the discretion of our Board of Directors. During 2021, we declared cash dividends of $118.0 million and $24.8 million on our common shares and preferred shares, respectively. 
 We expect to meet our future short-term liquidity requirements through cash on hand and net cash provided by our current operations. We expect that our operating subsidiaries will generate sufficient cash flow to cover operating expenses and the payment of principal and interest on our indebtedness as they become due. We may elect to meet certain long-term liquidity requirements or to continue to pursue strategic opportunities through utilizing cash on hand, cash generated from our current operations and the issuance of securities in the future. Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required. 
 
 Critical Accounting Estimates and Policies 
 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Note 2 to the consolidated financial statements describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. 
 Operating Leases — We lease equipment pursuant to net operating leases. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received. 
 Generally, under our aircraft lease and engine agreements, the lessee is required to make periodic maintenance payments calculated based on the lessee’s utilization of the leased asset or at the end of the lease. Typically, under our aircraft lease agreements, the lessee is responsible for maintenance, repairs and other operating expenses throughout the term of the lease. These periodic maintenance payments accumulate over the term of the lease to fund major maintenance events, and we are contractually obligated to return maintenance payments to the lessee up to the 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. 
 Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance Deposits in our Consolidated Balance Sheets. All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenues. Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions. Significant changes to these estimates could have a material effect on the amount of revenue recognized in the period. 
 For purchase and lease back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the fair value of the aircraft and lease. The fair value of the lease may include a lease premium or discount. 
 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. The lease payments are segregated into principal and interest components similar to a loan. Unearned income is recognized on an effective interest method over the lease term and is recorded as finance lease income. The principal component of the lease payment is reflected as a reduction to the net investment in finance leases. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received. 
 Variable Interest Entities —The assessment of whether an entity is a VIE and the determination of whether to consolidate a VIE requires judgment. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. 
 Maintenance Payments —Typically, under an operating lease of aircraft, the lessee is responsible for performing all maintenance and is generally required to make maintenance payments to us for heavy maintenance, overhaul or replacement of certain high-value components of the aircraft or engine. These maintenance payments are based on hours or cycles of utilization or on calendar time, depending on the component, and are generally required to be made monthly in arrears. If a lessee is making monthly maintenance payments, we would typically be obligated to reimburse the lessee for costs they incur for heavy maintenance, overhaul or replacement of certain high-value components to the extent of maintenance payments received in respect of the specific maintenance event, usually shortly following the completion of the relevant work. 
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 We record the portion of maintenance payments paid by the lessee that are expected to be reimbursed as maintenance deposit liabilities in the Consolidated Balance Sheets. Reimbursements made to the lessee upon the receipt of evidence of qualifying maintenance work are recorded against the maintenance deposit liability. 
 In certain acquired leases, we or the lessee may be obligated to make a payment to the other party at lease termination based on redelivery conditions stipulated at the inception of the lease. When the lessee is required to return the aircraft in an improved maintenance condition, we record a maintenance right asset, as a component of other assets, for the estimated value of the end-of-life maintenance payment at acquisition. We recognize payments received as end-of-lease compensation adjustments, within lease revenue or as a reduction to the maintenance right asset, when payment is received or collectability is assured. In the event we are required to make payments at the end of the lease for redelivery conditions, amounts are accrued as additional maintenance liability and expensed when we are obligated and can reasonably estimate such payment. 
 Property, Plant and Equipment, Leasing Equipment and Depreciation —Property, plant and equipment and leasing equipment are stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over estimated useful lives, to estimated residual values which are summarized as follows: 
 
 Asset Range of Estimated Useful Lives Residual Value Estimates 
 Aircraft 25 years from date of manufacture 
 Generally not to exceed 15% of manufacturer’s list price when new 
 Aircraft engines 2 - 6 years, based on maintenance adjusted service life 
 Sum of engine core salvage value plus the estimated fair value of life limited parts 
 Offshore energy vessels 25 years from date of manufacture 
 10% of new build cost 
 Railcars and locomotives 1 - 50 years from date of manufacture 
 Scrap value at end of useful life 
 Track and track related assets 1 - 50 years from date of manufacture 
 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 
 Scrap value at end of useful life 
 Railroad equipment 2 - 15 years from date of manufacture 
 Scrap value at end of useful life 
 Terminal machinery and equipment 15 - 25 years from date of manufacture 
 Scrap value at end of useful life 
 Vehicles 2 - 7 years from date of manufacture 
 Scrap value at end of useful life 
 Furniture and fixtures 3 - 6 years from date of purchase 
 None 
 Computer hardware and software 2 - 5 years from date of purchase 
 None 
 Construction in progress N/A N/A 

 
 
 Impairment of Long-Lived Assets —We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination; significant traffic decline; or the introduction of newer technology aircraft, vessels, engines or railcars. When performing a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its net book value. The undiscounted cash flows consist of cash flows from currently contracted leases and terminal services contracts, future projected leases, terminal service and freight rail rates, transition costs, estimated down time and estimated residual or scrap values. In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge. 
 Management develops the assumptions used in the recoverability analysis based on its knowledge of active contracts, current and future expectations of the global demand for a particular asset and historical experience in the leasing markets, as well as information received from third party industry sources. The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in contracted lease rates, terminal service, and freight rail rates, residual values, economic conditions, technology, demand for a particular asset type and other factors. With respect to our offshore energy business, although we expect current market conditions to improve, if such conditions persist for an extended period of time, this could result in the impairment of some of our offshore vessels. 
 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 to the consolidated financial statements for additional information. 
 We review the carrying values of goodwill at least annually to assess impairment since these assets are not amortized. An annual impairment review is conducted as of October 1st of each year. Additionally, we review the carrying value of goodwill whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The determination of fair value involves significant management judgment. 
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 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 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 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 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. 
 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 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. Gulf Coast. 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 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. 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. 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. 
 Income Taxes —A portion of our income earned by our corporate subsidiaries is subject to U.S. federal and state income taxation, and is taxed at the currently enacted rates. The remainder of our income is allocated directly to our partners and is not subject to a corporate level of taxation. Certain subsidiaries of ours are subject to income tax in the foreign countries in which they conduct business. 
 We account for these taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. 
 Recent Accounting Pronouncements 
 Please see Note 2 to our consolidated financial statements included elsewhere in this filing for recent accounting pronouncements.
FTAI Aviation Ltd. 10-K

Item 7. Management’s Discussion and Analysis
