FTAI Aviation Ltd. 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements: Consolidated Financial Statements of Fortress Transportation and Infrastructure Investors LLC: Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 66 Consolidated Balance Sheets as of December 31, 2021 and 2020 69 Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 70 Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2021, 2020 and 2019 71 Consolidated Statement of Changes in Equity for the years ended December 31, 2021, 2020 and 2019 72 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 73 Notes to Consolidated Financial Statements 75 65 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Fortress Transportation and Infrastructure Investors LLC 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, 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. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2022 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 66 Valuation of Goodwill-Jefferson Terminal Reporting Unit Description of the Matter At December 31, 2021, the Company’s goodwill was $122.7 million for the Jefferson Terminal reporting unit. As discussed in Note 2 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level. 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 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. To test the estimated fair value of the Company’s Jefferson Terminal reporting unit for use in the goodwill impairment assessment, we performed audit procedures that included, among others, assessing the valuation methodology used and testing the significant assumptions described above and the completeness and accuracy of the underlying data used by the Company in its impairment test. For example, we compared the significant assumptions used by management to current industry, market and economic trends; to the historical results of the reporting unit and other guideline companies within the same industry; and evaluated whether changes to the Company’s business model, customer base or product mix and other relevant factors would affect the significant assumptions. We also assessed the historical accuracy of management’s estimates and performed sensitivity analyses over significant assumptions to evaluate the changes in the fair value of the Jefferson Terminal reporting unit that would result from changes in the significant assumptions. We also involved our valuation specialists to assist in our evaluation of the Company's valuation methodology and certain significant assumptions. Recognition of Maintenance Revenue for Aircraft Leases Description of the Matter As described in Note 2 to the consolidated financial statements, the Company recognizes maintenance revenue for aircraft leases related to the portion of maintenance payments received from lessees that are not expected to be reimbursed for maintenance events. Revenue related to maintenance on leased aircraft is recorded as a component of maintenance revenue which totaled $128.8 million for the year ended December 31, 2021, as disclosed in Note 13. Auditing maintenance revenue related to aircraft leases was complex and highly judgmental due to the significant estimation involved in projecting the timing of future major maintenance events. 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 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. To test maintenance revenue for aircraft leases, we performed audit procedures that included, among others, assessing the Company’s revenue recognition methodology and testing the significant assumptions described above and the completeness and accuracy of the underlying data used by the Company in its analyses. For example, we compared the significant assumptions used by management to the underlying customer lease agreements, historical utilization and third- party estimates for MTBR, when available. We tested management’s retrospective review of timing of estimated maintenance events to actual results to assess the historical accuracy of significant assumptions and contrary evidence, if any. 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. 67 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 We have served as the Company’s auditor since 2016. New York, New York February 25, 2022 68 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) Notes December 31, 2021 2020 Assets Cash and cash equivalents 2 $ 188,078 $ 121,703 Restricted cash 2 251,983 39,715 Accounts receivable, net 175,225 91,691 Leasing equipment, net 5 1,891,649 1,635,259 Operating lease right-of-use assets, net 14 75,344 62,355 Finance leases, net 6 7,583 6,927 Property, plant, and equipment, net 7 1,555,857 964,363 Investments 8 77,325 146,515 Intangible assets, net 9 98,699 18,786 Goodwill 257,137 122,735 Other assets 2 284,974 177,928 Total assets $ 4,863,854 $ 3,387,977 Liabilities Accounts payable and accrued liabilities $ 202,669 $ 113,185 Debt, net 10 3,220,211 1,904,762 Maintenance deposits 2 106,836 148,293 Security deposits 2 40,149 37,064 Operating lease liabilities 14 73,594 62,001 Other liabilities 96,295 23,351 Total liabilities $ 3,739,754 $ 2,288,656 Commitments and contingencies 21 Equity Common shares ($ 0.01 par value per share; 2,000,000,000 shares authorized; 99,180,385 and 85,617,146 shares issued and outstanding as of December 31, 2021 and 2020, respectively) $ 992 $ 856 Preferred shares ($ 0.01 par value per share; 200,000,000 shares authorized; 13,320,000 and 9,120,000 shares issued and outstanding as of December 31, 2021 and 2020, respectively) 133 91 Additional paid in capital 1,411,940 1,130,106 Accumulated deficit ( 132,392 ) ( 28,158 ) Accumulated other comprehensive loss ( 156,381 ) ( 26,237 ) Shareholders' equity 1,124,292 1,076,658 Non-controlling interest in equity of consolidated subsidiaries ( 192 ) 22,663 Total equity $ 1,124,100 $ 1,099,321 Total liabilities and equity $ 4,863,854 $ 3,387,977 See accompanying notes to consolidated financial statements. 69 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share data) Year Ended December 31, Notes 2021 2020 2019 Revenues Equipment leasing revenues $ 335,583 $ 297,934 $ 349,322 Infrastructure revenues 120,219 68,562 229,452 Total revenues 13 455,802 366,496 578,774 Expenses Operating expenses 172,464 109,512 291,572 General and administrative 17,409 18,159 16,905 Acquisition and transaction expenses 21,941 9,868 17,623 Management fees and incentive allocation to affiliate 18 16,322 18,519 36,059 Depreciation and amortization 5, 7, 9 201,756 172,400 169,023 Asset impairment 10,463 33,978 4,726 Interest expense 171,036 98,206 95,585 Total expenses 611,391 460,642 631,493 Other (expense) income Equity in losses of unconsolidated entities 8 ( 12,734 ) ( 5,039 ) ( 2,375 ) 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 (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 (Benefit from) provision for income taxes 17 ( 1,057 ) ( 5,905 ) 17,810 Net (loss) income from continuing operations ( 130,706 ) ( 105,023 ) 134,322 Net income from discontinued operations, net of income taxes 3 — 1,331 73,462 Net (loss) income ( 130,706 ) ( 103,692 ) 207,784 Less: Net (loss) income attributable to non-controlling interests in consolidated subsidiaries: Continuing operations ( 26,472 ) ( 16,522 ) ( 17,571 ) Discontinued operations 3 — — 247 Less: Dividends on preferred shares 24,758 17,869 1,838 Net (loss) income attributable to shareholders $ ( 128,992 ) $ ( 105,039 ) $ 223,270 (Loss) earnings per share: Basic 20 Continuing operations $ ( 1.43 ) $ ( 1.24 ) $ 1.74 Discontinued operations $ — $ 0.02 $ 0.85 Diluted 20 Continuing operations $ ( 1.43 ) $ ( 1.24 ) $ 1.74 Discontinued operations $ — $ 0.02 $ 0.85 Weighted average shares outstanding: Basic 89,922,088 86,015,702 85,992,019 Diluted 89,922,088 86,015,702 86,029,363 See accompanying notes to consolidated financial statements. 70 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Dollars in thousands) Year Ended December 31, 2021 2020 2019 Net (loss) income $ ( 130,706 ) $ ( 103,692 ) $ 207,784 Other comprehensive (loss) income: Other comprehensive (loss) income related to equity method investees, net (1) ( 129,820 ) ( 26,609 ) 372 Changes in pension and other employee benefit accounts ( 324 ) — — Comprehensive (loss) income ( 260,850 ) ( 130,301 ) 208,156 Comprehensive (loss) income attributable to non-controlling interest: Continuing operations ( 26,472 ) ( 16,522 ) ( 17,571 ) Discontinued operations — — 247 Comprehensive (loss) income attributable to shareholders $ ( 234,378 ) $ ( 113,779 ) $ 225,480 __________________________________________________ (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. 71 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Dollars in thousands) Common Shares Preferred Shares Additional Paid In Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity Equity - December 31, 2018 $ 840 $ — $ 1,029,376 $ ( 32,817 ) $ — $ 56,383 $ 1,053,782 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 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 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 ) Issuance of common shares 7 304 311 Conversion of participating securities ( 7 ) ( 7 ) Dividends declared - common shares ( 113,572 ) ( 113,572 ) Issuance of preferred shares 10 19,687 19,697 Dividends declared - preferred shares ( 17,869 ) ( 17,869 ) Equity-based compensation 2,325 2,325 Equity - December 31, 2020 $ 856 $ 91 $ 1,130,106 $ ( 28,158 ) $ ( 26,237 ) $ 22,663 $ 1,099,321 Net loss ( 104,234 ) ( 26,472 ) ( 130,706 ) Other comprehensive loss — ( 130,144 ) — ( 130,144 ) Total comprehensive loss ( 104,234 ) ( 130,144 ) ( 26,472 ) ( 260,850 ) Settlement of equity based compensation ( 421 ) ( 421 ) Issuance of common shares 136 323,443 323,579 Dividends declared - common shares ( 118,009 ) ( 118,009 ) Issuance of preferred shares 42 101,158 101,200 Dividends declared - preferred shares ( 24,758 ) ( 24,758 ) Equity-based compensation 4,038 4,038 Equity - December 31, 2021 $ 992 $ 133 $ 1,411,940 $ ( 132,392 ) $ ( 156,381 ) $ ( 192 ) $ 1,124,100 See accompanying notes to consolidated financial statements. 72 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year Ended December 31, 2021 2020 2019 Cash flows from operating activities: Net (loss) income $ ( 130,706 ) $ ( 103,692 ) $ 207,784 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 ) (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 ) Loss on extinguishment of debt 3,254 11,667 — Equity-based compensation 4,038 2,325 8,404 Depreciation and amortization 201,756 172,400 171,225 Asset impairment 10,463 33,978 4,726 Change in deferred income taxes ( 2,057 ) ( 5,851 ) 14,495 Change in fair value of non-hedge derivatives ( 2,220 ) 181 4,555 Amortization of lease intangibles and incentives 27,978 30,346 30,162 Amortization of deferred financing costs 21,723 7,315 8,333 Bad debt expense 12,953 3,595 3,986 Other ( 440 ) 1,502 827 Change in: Accounts receivable ( 88,872 ) ( 59,734 ) ( 22,622 ) Other assets ( 30,789 ) 3,660 ( 17,890 ) Accounts payable and accrued liabilities 25,079 ( 5,258 ) 31,543 Management fees payable to affiliate 1,042 ( 20,622 ) 19,080 Other liabilities 118 ( 6,360 ) ( 14,837 ) Net cash (used in) provided by operating activities ( 22,044 ) 63,106 151,043 Cash flows from investing activities: 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 ) Acquisition of property, plant and equipment ( 157,332 ) ( 264,829 ) ( 331,171 ) 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 ) Purchase deposit for aircraft and aircraft engines ( 13,658 ) ( 8,343 ) ( 1,000 ) Proceeds from sale of subsidiaries — — 183,819 Proceeds from sale of leasing equipment 158,927 72,175 248,454 Proceeds from sale of property, plant and equipment 4,494 — — 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 Net cash used in investing activities $ ( 1,286,958 ) $ ( 509,123 ) $ ( 495,236 ) See accompanying notes to consolidated financial statements. 73 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year Ended December 31, 2021 2020 2019 Cash flows from financing activities: Proceeds from debt $ 2,894,127 $ 1,340,981 $ 788,829 Repayment of debt ( 1,553,231 ) ( 852,197 ) ( 405,131 ) Payment of deferred financing costs ( 52,739 ) ( 28,243 ) ( 34,218 ) Receipt of security deposits 8,770 3,242 7,887 Return of security deposits ( 1,201 ) ( 4,655 ) ( 368 ) Receipt of maintenance deposits 31,507 33,369 65,279 Release of maintenance deposits ( 20,724 ) ( 15,712 ) ( 26,940 ) Proceeds from issuance of common shares, net of underwriter's discount 323,124 — — 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 ) Cash dividends - common shares ( 118,009 ) ( 113,572 ) ( 113,541 ) Cash dividends - preferred shares ( 24,758 ) ( 17,869 ) ( 1,838 ) Net cash provided by financing activities 1,587,645 364,918 465,873 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 Cash and cash equivalents and restricted cash, end of period $ 440,061 $ 161,418 $ 242,517 Supplemental disclosure of cash flow information: Cash paid for interest, net of capitalized interest $ 142,200 $ 71,637 $ 83,164 Cash paid for taxes 402 — 1,072 Supplemental disclosure of non-cash investing and financing activities: Repayment and settlement of debt $ — $ — $ ( 24,250 ) Acquisition of leasing equipment 47,114 141,478 ( 24,530 ) Acquisition of property, plant and equipment ( 581 ) ( 13,237 ) ( 47,520 ) Investment in Long Ridge JV — — 155,589 Settled and assumed security deposits ( 4,041 ) ( 5,825 ) ( 239 ) Settlement of equity based compensation — — ( 2,405 ) Billed, assumed and settled maintenance deposits ( 21,710 ) ( 58,906 ) 15,117 Deferred financing costs — — ( 1,161 ) 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 ) — Issuance of common shares 455 304 385 See accompanying notes to consolidated financial statements. 74 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 1. ORGANIZATION Fortress Transportation and Infrastructure Investors LLC (“we”, “us”, “our” or the “Company”) is a Delaware limited liability company which, through its subsidiary, Fortress Worldwide Transportation and Infrastructure General Partnership (the “Partnership”), owns and leases aviation equipment and also owns and operates (i) a multi-modal crude oil and refined products terminal in Beaumont, Texas (“Jefferson Terminal”), (ii) a deep-water port located along the Delaware River with an underground storage cavern, 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 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). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting —The accompanying consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“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 intercompany transactions and balances have been eliminated. The ownership interest of other investors in consolidated subsidiaries is recorded as non-controlling interest. We use the equity method of accounting for investments in entities in which we exercise significant influence, but which do not meet the requirements for consolidation. Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities as well as the proportionate interest in adjustments to other comprehensive income (loss). Use of Estimates — The preparation of financial statements in conformity with 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. Risks and Uncertainties — In the normal course of business, we encounter several significant types of economic risk including credit, market, and capital market risks. Credit risk is the risk of the inability or unwillingness of a lessee, customer, or derivative counterparty to make contractually required payments or to fulfill its other contractual obligations. Market risk reflects the risk of a downturn or volatility in the underlying industry segments in which we operate, which could adversely impact the pricing of the services offered by us or a lessee’s or customer’s ability to make payments, increase the risk of unscheduled lease terminations and depress lease rates and the value of our leasing equipment or operating assets. Capital market risk is the risk that we are unable to obtain capital at reasonable rates to fund the growth of our business or to refinance existing debt facilities. We, through our subsidiaries, also conduct operations outside of the United States; such international operations are subject to the same risks as those associated with our United States operations as well as additional risks, including unexpected changes in regulatory requirements, heightened risk of political and economic instability, potentially adverse tax consequences and the burden of complying with foreign laws. We do not have significant exposure to foreign currency risk as all of our leasing arrangements and the majority of terminal services revenue are denominated in U.S. dollars. Variable Interest Entities — The assessment of whether an entity is a VIE and the determination of whether to consolidate a VIE requires judgment. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Delaware River Partners LLC During 2016, through Delaware River Partners LLC (“DRP”), a consolidated subsidiary, we purchased the assets of Repauno, which consisted primarily of land, a storage cavern, and riparian rights for the acquired land, site improvements and rights. Upon acquisition there were no operational processes that could be applied to these assets that would result in outputs without significant green field development. We currently hold an approximately 98 % economic interest, and a 100 % voting interest in DRP. DRP is solely reliant on us to finance its activities and therefore is a VIE. We concluded that we are the primary beneficiary and, accordingly, DRP has been presented on a consolidated basis in the accompanying financial statements. 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. 75 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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. Aviation inventory is carried at the lower of cost or net realizable value on our balance sheet. We had Aviation inventory of $ 100.3 million and $ 58.2 million as of December 31, 2021 and 2020, respectively, which is included in Other assets in the Consolidated Balance Sheets. Commodities inventory is carried at the lower of cost or net realizable value on our balance sheet. Commodities are removed from inventory based on the average cost at the time of sale. We had commodities inventory of $ 6.8 million and $ 0.1 million as of December 31, 2021 and 2020, respectively, which is included in Other assets in the Consolidated Balance Sheets. 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 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 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. Significant spare parts are depreciated in conjunction with the underlying property, plant and equipment asset when placed in service. We review our depreciation policies on a regular basis to determine whether changes have taken place that would suggest that a change in our depreciation policies, useful lives of our equipment or the assigned residual values is warranted. For planned major maintenance or component overhaul activities for aviation equipment off lease, the cost of such major maintenance or component overhaul event is capitalized and depreciated on a straight-line basis over the period until the next maintenance or component overhaul event is required. Our offshore energy vessels are required to be drydocked periodically for recertifications or major repairs and maintenance that cannot be performed while the vessels are operating. Normal repairs and maintenance are expensed as incurred. We capitalize the costs associated with the drydockings and amortize them on a straight-line basis over the period between drydockings, usually between 30 and 60 months. In accounting for leasing equipment, we make estimates about the expected useful lives, residual values and the fair value of acquired in-place leases and acquired maintenance liabilities (for aviation equipment). 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. 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 76 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 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. 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 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. Capitalized costs are amortized using the unit-of-production method based on total proved reserves. Capitalized Interest — The interest cost associated with major development, construction projects and tax exempt bonds is capitalized and included in the cost of the project. Interest capitalization ceases once a project is substantially complete or no longer undergoing construction activities to prepare it for its intended use. We capitalized interest of $ 10.1 million, $ 20.9 million and $ 11.9 million during the years ended December 31, 2021, 2020 and 2019, respectively. Repairs and Maintenance —Repair and maintenance costs that do not extend the lives of the assets are expensed as incurred. Our repairs and maintenance expense was $ 9.0 million, $ 4.1 million and $ 5.0 million during the years ended December 31, 2021, 2020 and 2019, respectively, and are included in Operating expenses in the Consolidated Statements of Operations. 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; a significant change in market conditions; 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. Security Deposits — Our operating leases generally require the lessee to pay a security deposit or provide a letter of credit. Security deposits are held until specified return dates stipulated in the lease or lease expiration. 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. 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. 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 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. 77 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. 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. 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. 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 and Transtar. 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 lease 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. 78 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 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 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. Unamortized deferred financing costs of $ 64.5 million and $ 36.2 million as of December 31, 2021 and 2020, respectively, are included in Debt, net in the Consolidated Balance Sheets. We also have unamortized deferred revolver fees related to our revolving debt of $ 2.9 million and $ 1.6 million as of December 31, 2021 and 2020, respectively, which are included in Other assets in the Consolidated Balance Sheets. Amortization expense was $ 21.7 million, $ 7.3 million and $ 8.1 million for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in Interest expense in the Consolidated Statements of Operations. Discontinued Operations — A disposal of an entity or component of an entity is reported in discontinued operations if the disposal represents a strategic shift that has or will have a material impact on our operations and financial results. See Note 3 for additional information related to our discontinued operations. Equipment Leasing Revenues Operating Leases — We lease equipment pursuant to operating leases. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received. Generally, under our aircraft lease and engine agreements, the lessee is required to make periodic maintenance payments calculated based on the lessee’s utilization of the leased asset or at the end of the lease. Typically, under our aircraft lease agreements, the lessee is responsible for maintenance, repairs and other operating expenses throughout the term of the lease. These periodic maintenance payments accumulate over the term of the lease to fund major maintenance events, and we are contractually obligated to return maintenance payments to the lessee up to the cost of maintenance events paid by the lessee. In the event the total cost of maintenance events over the term of a lease is less than the cumulative maintenance payments, we are not required to return any unused or excess maintenance payments to the lessee. Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance Deposits in our Consolidated Balance Sheets. All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenues. Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions. Significant changes to these estimates could have a material effect on the amount of revenue recognized in the period. For purchase and lease back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the relative fair value of the aircraft and lease. The fair value of the lease may include a lease premium or discount 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. The Q&A permits an entity to elect to forgo the evaluation of the enforceable rights and obligations of a lease contract required under ASC 842, Leases , as long as the total rent payments after the lease concessions are substantially the same, or less than, the total rent payments in the existing lease. The impact of the COVID-19 related lease concessions granted above did not have a material impact on our results of operations during the year ended December 31, 2021. Finance Leases —From time to time we enter into finance lease arrangements that include a lessee obligation to purchase the leased equipment at the end of the lease term, a bargain purchase option, or provides for minimum lease payments with a present value that equals or exceeds substantially all of the fair value of the leased equipment at the date of lease inception. Net investment in finance leases represents the minimum lease payments due from lessee, net of unearned income. The lease payments are segregated into principal and interest components similar to a loan. Unearned income is recognized on an effective interest method over the lease term and is recorded as finance lease income. The principal component of the lease payment is reflected as a reduction to the net investment in finance leases. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received. 79 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 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. Lease income is recognized on a straight-line basis over the terms of the relevant lease agreement. Crude Marketing Revenues —Crude marketing revenues consist of marketing revenue related to Canadian crude oil. 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. 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. Leasing Arrangements —At contract inception, we evaluate whether an arrangement is or contains a lease for which we are the lessee (that is, arrangements which provide us with the right to control a physical asset for a period of time). Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized in Operating lease right-of-use assets, net and Operating lease liabilities in our Consolidated Balance Sheets, respectively. Finance lease ROU assets are recognized in Property, plant and equipment, net and lease liabilities are recognized in Other liabilities in our Consolidated Balance Sheets. All lease liabilities are measured at the present value of the unpaid lease payments, discounted using our incremental borrowing rate based on the information available at commencement date of the lease. ROU assets, for both operating and finance leases, are initially measured based on the lease liability, adjusted for prepaid rent and lease incentives. 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 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. We have elected to combine lease and non-lease components for all lease contracts where we are the lessee. Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets, and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred. 80 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 % 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. We monitor the financial condition of these institutions and have not experienced any losses associated with these accounts. Allowance for Doubtful Accounts — We determine the allowance for doubtful accounts based on our assessment of the collectability of our receivables on a customer-by-customer basis. The allowance for doubtful accounts was $ 16.9 million and $ 4.6 million as of December 31, 2021 and 2020, respectively. Bad debt expense was $ 13.0 million, $ 3.6 million and $ 3.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. 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 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 recorded in other comprehensive income related to cash flow hedges of our equity method investees and pension and other postretirement benefits. Derivative Financial Instruments Electricity Derivatives — Through our equity method investment in Long Ridge, we enter into derivative contracts as part of a risk management program to mitigate price risk associated with certain electricity price exposures. We primarily use swap derivative contracts, which are agreements to buy or sell a quantity of electricity at a predetermined future date and at a predetermined price. Cash Flow Hedges Certain of these derivative instruments are designated and qualify as cash flow hedges. Our share of the derivative's gain or loss is reported as Other comprehensive income (loss) related to equity method investees in our Consolidated Statements of Comprehensive (Loss) Income and recorded in Accumulated other comprehensive (loss) income in our Consolidated Balance Sheets. 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. 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. Commodity Derivatives — We also enter into short-term and long-term crude forward contracts. Gains and losses related to our crude sales and purchase derivatives are recorded on a gross basis and are included in Crude marketing revenues and Operating expenses, respectively, in our Consolidated Statements of Operations. The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows. Additionally, depending on market conditions, we enter into short-term forward purchase and sales contracts for butane. Gains and losses related to our butane derivatives are recorded on a net basis and are included in Other revenue in our Consolidated Statements of Operations, as these contracts are considered part of central operating activities. The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows. See Note 12 for additional details related to our commodity derivatives. Foreign Currency — Our functional and reporting currency is the U.S. dollar. Purchases and sales of assets and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Net realized foreign currency gains or losses relating to the differences between these recorded amounts and the U.S. dollar equivalent actually received or paid are reported as a component of operating expenses within the Consolidated Statement of Operations. 81 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 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. 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. We file income tax returns in the U.S. federal jurisdiction, various state jurisdictions and in certain foreign jurisdictions. The income tax returns filed by us and our subsidiaries are subject to examination by the U.S. federal, state and foreign tax authorities. We recognize tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. 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 $ 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. 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. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Adoption did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) . This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020 and early adoption is permitted. We adopted this guidance in the first quarter of 2021, which did not have a material impact on our consolidated financial statements. 82 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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. 3. 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: Year Ended December 31, 2021 2020 2019 Revenues Total revenues $ — $ — $ 39,071 Expenses Operating expense — — 32,815 Acquisition and transaction expenses — — 5,526 Depreciation and amortization — — 2,202 Interest expense — — 1,458 Total expenses — — 42,001 Gain on sale of assets, net — 1,331 77,468 Other income — 1,331 77,468 Income before income taxes — 1,331 74,538 Provision for income taxes — — 1,076 Net income — 1,331 73,462 Less: Net income attributable to non-controlling interests in consolidated subsidiaries — — 247 Net income attributable to shareholders $ — $ 1,331 $ 73,215 The following table presents the significant non-cash items and capital expenditures from discontinued operations: Year Ended December 31, 2021 2020 2019 Operating activities: Depreciation and amortization $ — $ — $ 2,202 Amortization of deferred financing costs — — 256 Share-based compensation expense — — 3,114 Investing activities: Purchases of property, plant and equipment $ — $ — $ ( 6,949 ) 4. 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. 83 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 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. 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) 37,552 Other liabilities 8,487 Total liabilities 103,738 Goodwill (2) 134,402 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 $ 60,000 84 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 $ 112,981 Track and track related assets 1 - 40 90,904 Land, site improvements and rights N/A 87,450 Bridges and tunnels 15 - 55 174,889 Buildings and improvements 3 - 25 12,448 Railroad equipment 2 - 15 2,725 Terminal machinery and equipment 2 - 15 3,325 Vehicles 2 - 5 3,740 Construction in progress N/A 1,928 Computer hardware and software 2 - 5 171 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; and • 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, 2021 2020 Total revenue $ 536,805 $ 481,678 Net loss attributable to shareholders ( 104,611 ) ( 125,989 ) 5. LEASING EQUIPMENT, NET Leasing equipment, net is summarized as follows: December 31, 2021 2020 Leasing equipment $ 2,356,219 $ 2,042,404 Less: Accumulated depreciation ( 464,570 ) ( 407,145 ) Leasing equipment, net $ 1,891,649 $ 1,635,259 85 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 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. To determine fair value, we used both a market approach, using quoted market prices for the same or similar assets, and an income approach, using discounted cash flows and an estimated discount rate. As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 10.5 million, net of redelivery compensation. The following table presents information related to acquisitions and dispositions of aviation leasing equipment: Year Ended December 31, 2021 2020 2019 Acquisitions: Aircraft 52 20 31 Engines 60 37 31 Dispositions: Aircraft 4 — 5 Engines 56 25 58 Depreciation expense for leasing equipment is summarized as follows: Year Ended December 31, 2021 2020 2019 Depreciation expense for leasing equipment $ 148,549 $ 142,266 $ 137,004 6. FINANCE LEASES, NET Finance leases, net are summarized as follows: December 31, 2021 2020 Finance leases $ 8,358 $ 9,389 Unearned revenue ( 775 ) ( 2,462 ) Finance leases, net $ 7,583 $ 6,927 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. The insurance proceeds were in excess of the book value of the finance lease, which was written down to zero, and we recognized a gain of approximately $ 1.0 million which is included in Other income in the Consolidated Statements of Operations. 86 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 7. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net is summarized as follows: December 31, 2021 2020 Land, site improvements and rights $ 149,914 $ 52,047 Construction in progress 154,859 425,261 Bridges and Tunnels 174,889 — Buildings and improvements 19,164 4,491 Terminal machinery and equipment 962,552 557,788 Track and track related assets 100,014 2,349 Railroad equipment 8,331 5,560 Railcars and locomotives 111,574 — Computer hardware and software 5,335 5,101 Furniture and fixtures 3,119 2,449 Other 10,548 5,870 1,700,299 1,060,916 Less: Accumulated depreciation ( 144,442 ) ( 96,553 ) Property, plant and equipment, net $ 1,555,857 $ 964,363 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: Year Ended December 31, 2021 2020 2019 Depreciation expense for property, plant and equipment: Continuing operations $ 47,915 $ 26,581 $ 28,466 Discontinued operations — — 2,187 Total $ 47,915 $ 26,581 $ 30,653 8. INVESTMENTS The following table presents the ownership interests and carrying values of our investments: Carrying Value Investment Ownership Percentage December 31, 2021 December 31, 2020 Advanced Engine Repair JV Equity method 25 % $ 21,317 $ 22,721 Falcon MSN 177 LLC Equity method 50 % 1,600 — 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. 87 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) The following table presents our proportionate share of equity in (losses) earnings: Year Ended December 31, 2021 2020 2019 Advanced Engine Repair JV $ ( 1,403 ) $ ( 1,931 ) $ ( 1,829 ) JGP Energy Partners LLC — — ( 292 ) Intermodal Finance I, Ltd. 470 114 ( 62 ) 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”), 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. Following the sale, we deconsolidated ORP, which held the assets of Long Ridge. Advanced Engine Repair JV In 2016, we invested $ 15 million for a 25 % interest in an advanced engine repair joint venture. We focus on developing new costs savings programs for engine repairs. We exercise significant influence over this investment and account for this investment as an equity method investment. In August 2019, we expanded the scope of our joint venture and invested an additional $ 13.5 million and maintained a 25 % interest. 88 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) JGP Energy Partners LLC In 2016, we initiated activities in a 50 % non-controlling interest in JGP, a joint venture. JGP was governed by a designated operating committee selected by the members in proportion to their equity interests. JGP was solely reliant on its members to finance its activities and therefore was a VIE. Initially, we concluded that we were not the primary beneficiary of JGP as the members shared equally in the risks and rewards and decision making authority of the entity and, therefore, we did not consolidate JGP and instead accounted for this investment in accordance with the equity method. 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. In 2012, we acquired a 51 % non-controlling interest in Intermodal Finance I, Ltd. (“Intermodal”), a joint venture. Intermodal is governed by a board of directors, and its shareholders have voting rights through their equity interests. As such, Intermodal is not within the scope of ASC 810-20 and should be evaluated for consolidation under the voting interest model. Due to the existence of substantive participating rights of the 49 % equity investor, including the joint approval of material operating and capital decisions, such as material contracts and capital expenditures consistent with ASC 810-10-25-11, we do not have unilateral rights over this investment and, therefore, we do not consolidate Intermodal but account for this investment in accordance with the equity method. We do not have a variable interest in this investment as none of the criteria of ASC 810-10-15-14 were met. As of December 31, 2021, Intermodal owns a portfolio of approximately 500 sh ipping containers subject to multiple operating leases. Equity Investments FYX Trust Holdco LLC In July 2020, we invested $ 1.3 million for a 14 % interest in an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries. FYX 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. 89 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) The tables below present summarized financial information for Long Ridge Terminal LLC: December 31, Balance Sheet 2021 2020 Assets Cash and cash equivalents $ 2,932 $ 3,057 Restricted cash 32,469 26,920 Accounts receivable, net 17,896 5,711 Property, plant, and equipment, net 764,607 612,234 Intangible assets, net 4,940 5,320 Goodwill 89,390 89,390 Other assets 14,441 9,384 Total assets $ 926,675 $ 752,016 Liabilities Accounts payable and accrued liabilities $ 16,121 $ 25,173 Debt, net 604,261 445,733 Other liabilities 341,279 36,515 Total liabilities 961,661 507,421 Equity Shareholders’ equity ( 1,035 ) 251,403 Accumulated deficit ( 33,951 ) ( 6,808 ) Total equity ( 34,986 ) 244,595 Total liabilities and equity $ 926,675 $ 752,016 Year Ended December 31, Income Statement 2021 2020 Total revenue 85,638 24,917 Expenses Operating expenses 28,310 16,339 Depreciation and amortization 24,836 11,004 Interest expense 11,005 2,037 Total expenses 64,151 29,380 Other expense ( 44,302 ) ( 1,967 ) Net loss $ ( 22,815 ) $ ( 6,430 ) 90 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 9. INTANGIBLE ASSETS AND LIABILITIES, NET Our intangible assets and liabilities, net are summarized as follows: December 31, 2021 Aviation Leasing Jefferson Terminal Transtar Total Intangible assets Acquired favorable lease intangibles $ 67,013 $ — $ — $ 67,013 Less: Accumulated amortization ( 36,051 ) — — ( 36,051 ) Acquired favorable lease intangibles, net 30,962 — — 30,962 Customer relationships — 35,513 60,000 95,513 Less: Accumulated amortization — ( 26,038 ) ( 1,738 ) ( 27,776 ) Acquired customer relationships, net — 9,475 58,262 67,737 Total intangible assets, net $ 30,962 $ 9,475 $ 58,262 $ 98,699 Intangible liabilities Acquired unfavorable lease intangibles $ 14,795 $ — $ — $ 14,795 Less: Accumulated amortization ( 6,068 ) — — ( 6,068 ) Acquired unfavorable lease intangibles, net $ 8,727 $ — $ — $ 8,727 December 31, 2020 Aviation Leasing Jefferson Terminal Transtar Total Intangible assets Acquired favorable lease intangibles $ 35,349 $ — $ — $ 35,349 Less: Accumulated amortization ( 29,591 ) — — ( 29,591 ) Acquired favorable lease intangibles, net 5,758 — — 5,758 Customer relationships — 35,513 — 35,513 Less: Accumulated amortization — ( 22,485 ) — ( 22,485 ) Acquired customer relationships, net — 13,028 — 13,028 Total intangible assets, net $ 5,758 $ 13,028 $ — $ 18,786 Intangible liabilities Acquired unfavorable lease intangibles $ 7,151 $ — $ — $ 7,151 Less: Accumulated amortization ( 4,604 ) — — ( 4,604 ) Acquired unfavorable lease intangibles, net $ 2,547 $ — $ — $ 2,547 91 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. Amortization of intangible assets and liabilities is recorded as follows: Classification in Consolidated Statements of Operations Year Ended December 31, 2021 2020 2019 Lease intangibles Equipment leasing revenues $ 4,993 $ 3,747 $ 7,181 Customer relationships: Depreciation and amortization Continuing operations 5,292 3,553 3,553 Discontinued operations — — 15 Total $ 10,285 $ 7,300 $ 10,749 As of December 31, 2021, estimated net annual amortization of intangibles is as follows: 2022 $ 17,242 2023 14,585 2024 10,490 2025 5,782 2026 4,389 Thereafter 37,484 Total $ 89,972 92 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 10. DEBT, NET Our debt, net is summarized as follows: December 31, 2021 December 31, 2020 Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings Loans payable DRP Revolver (1) $ 25,000 (i) Base Rate + 2.75 %; or (ii) Base Rate + 3.75 % (Eurodollar) 11/5/24 $ 25,000 Revolving Credit Facility (2) 189,473 (i) Base Rate + 2.00 %; or (ii) Adjusted Term SOFR Rate + 3.00 % 12/2/24 — EB-5 Loan Agreement 26,100 5.75 % 1/25/26 — 2021 Bridge Loans 100,527 (i) Base Rate + 1.75 %; or (ii) Adjusted Term SOFR Rate + 2.75 % 12/15/22 — Total loans payable 341,100 25,000 Bonds payable Series 2020 Bonds 263,980 (i) Tax Exempt Series 2020A Bonds: 3.625 % (ii) Tax Exempt Series 2020A Bonds: 4.00 % (iii) Taxable Series 2020B Bonds: 6.00 % (i) 1/1/35 (ii) 1/1/50 (iii) 1/1/25 263,980 Series 2021 Bonds 425,000 (i) Series 2021A Bonds: 1.875 % to 3.000 % (ii) Series 2021B Bonds: 4.100 % (i) 1/1/26 to 1/1/50 (ii) 1/1/28 — Senior Notes due 2022 (3) — N/A N/A 399,331 Senior Notes due 2025 (4) 852,198 6.50 % 10/1/25 852,673 Senior Notes due 2027 400,000 9.75 % 8/1/27 400,000 Senior Notes due 2028 (5) 1,002,416 5.50 % 5/1/28 — Total bonds payable 2,943,594 1,915,984 Debt 3,284,694 1,940,984 Less: Debt issuance costs ( 64,483 ) ( 36,222 ) Total debt, net $ 3,220,211 $ 1,904,762 Total debt due within one year $ 100,527 $ 25,000 ______________________________________________________________________________________ (1) Requires a quarterly commitment fee at a rate of 0.875 % on the average daily unused portion, as well as customary letter of credit fees and agency fees. (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 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. 93 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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”). The Series 2020 Bonds are designated as $ 184.9 million of Series 2020A Dock and Wharf Facility Revenue Bonds (the “Tax Exempt Series 2020A Bonds”), and $ 79.1 million of Series 2020B Taxable Facility Revenue Bonds (the “Taxable Series 2020B Bonds”). The Tax Exempt Series 2020A Bonds maturing on January 1, 2035 ($ 53.5 million aggregate principal amount) bear interest at a fixed rate of 3.625 %. The Tax Exempt Series 2020A Bonds maturing on January 1, 2050 ($ 131.4 million aggregate principal amount) bear interest at a fixed rate of 4.00 %. The Taxable Series 2020B Bonds will mature on January 1, 2025 and bear interest at a fixed rate of 6.00 %. Jefferson used a portion of the net proceeds from this offering to refund, redeem and defease the Series 2012 Bonds, Series 2016 Bonds and Jefferson Revolver, 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, to fund certain reserve and funded interest accounts related to the Series 2020 Bonds, and to pay for or reimburse certain costs of issuance of the Series 2020 Bonds. Jefferson recognized a loss on extinguishment of debt of $ 4.7 million as a result of this transaction. 94 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 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 benchmark interest rate. Senior Notes due 2027 — On July 28, 2020, we issued $ 400 million aggregate principal amount of senior unsecured notes due 2027 (the “2027 Notes”). The 2027 Notes bear interest at a rate of 9.75 % per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2021. We used a portion of the proceeds to repay $ 220 million of outstanding borrowings under the Revolving Credit Facility, and intend to use the remaining proceeds for general corporate purposes, and the funding of future acquisitions and investments, including aviation investments. Senior Notes due 2025 — On December 23, 2020, we issued an additional $ 400 million of 2025 Notes at an offering price of 101.75 % of the principal amount plus accrued interest from and including October 1, 2020. We used a portion of the proceeds to repay $ 300 million of outstanding 2022 Notes through the Tender Offer (as defined below), and to repay $ 50 million of borrowings under the Revolving Credit Facility. Tender Offer for Senior Notes due 2022 — On December 9, 2020, we commenced a cash tender offer (the “Tender Offer”) for up to $ 300 million aggregate principal amount of the 2022 Notes. On December 23, 2020, we completed the Tender Offer for the entire $ 300 million aggregate principal amount of 2022 Notes validly tendered in connection with the Tender Offer. Holders whose notes were accepted for purchase received total consideration of $ 1,016.00 per $1,000 principal amount of 2022 Notes, including an early tender premium equal to $ 30.00 per $1,000 principal amount of 2022 Notes, plus accrued and unpaid interest on the 2022 Notes from September 15, 2020 (the most recent payment of semi-annual interest) to, but not including, December 23, 2020, subject to the terms and conditions of the Tender Offer. We recognized a loss on extinguishment of debt of $ 6.9 million in connection with this transaction. We were in compliance with all debt covenants as of December 31, 2021. As of December 31, 2021, scheduled principal repayments under our debt agreements for the next five years and thereafter are summarized as follows: 2022 2023 2024 2025 2026 Thereafter Total DRP Revolver $ — $ — $ 25,000 $ — $ — $ — $ 25,000 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 Senior Notes due 2027 — — — — — 400,000 400,000 Senior Notes due 2028 — — — — — 1,000,000 1,000,000 Total principal payments on loans and bonds payable $ 100,527 $ — $ 214,473 $ 929,060 $ 35,125 $ 2,000,895 $ 3,280,080 11. FAIR VALUE MEASUREMENTS Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows: • Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs. • Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the asset or liability. The valuation techniques that may be used to measure fair value are as follows: • Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. • Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts. 95 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). The following tables set forth our financial assets measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of December 31, 2021 December 31, 2021 Total Level 1 Level 2 Level 3 Valuation Technique Assets Cash and cash equivalents $ 188,078 $ 188,078 $ — $ — Market Restricted cash 251,983 251,983 — — Market Derivative assets 2,220 — 2,220 — Income Total assets $ 442,281 $ 440,061 $ 2,220 $ — Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of December 31, 2020 December 31, 2020 Total Level 1 Level 2 Level 3 Valuation Technique Assets Cash and cash equivalents $ 121,703 $ 121,703 $ — $ — Market Restricted cash 39,715 39,715 — — Market Total assets $ 161,418 $ 161,418 $ — $ — Our cash and cash equivalents and restricted cash consist largely of demand deposit accounts with maturities of 90 days or less when purchased that are considered to be highly liquid. These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy. 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: December 31, 2021 2020 Series 2020 A Bonds (1) $ 189,773 $ 186,306 Series 2020 B Bonds (1) 81,637 79,723 Series 2021 A Bonds (1) 222,023 — Series 2021 B Bonds (1) 194,278 — Senior Notes due 2022 — 403,536 Senior Notes due 2025 881,408 888,701 Senior Notes due 2027 448,848 460,340 Senior Notes due 2028 1,019,470 — ______________________________________________________________________________________ (1) Fair value is based upon market prices for similar municipal securities. The fair value of all other items reported as debt, net in the Consolidated Balance Sheet approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy. 96 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. We record such assets at fair value when it is determined the carrying value may not be recoverable. Fair value measurements for assets subject to impairment tests are based on an income approach which uses Level 3 inputs, which include our assumptions as to future cash flows from operation of the underlying businesses and the leasing and eventual sale of assets. 12. DERIVATIVE FINANCIAL INSTRUMENTS Commodity Derivatives Crude Oil 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. Butane 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: December 31, 2021 2020 Notional Amount (BBL in thousands) 244 N/A Fair Value of Assets (1) $ 2,220 $ — Term 1 to 3 months N/A ________________________________________________________ (1) Included in Other assets in the Consolidated Balance Sheets. The following table presents a summary of the changes in fair value for all Level 3 crude oil derivatives: Year Ended December 31, 2021 2020 2019 Beginning Balance $ — $ 181 $ 6,545 Net losses recognized in earnings — ( 181 ) ( 6,364 ) Purchases — — 314 Sales — — ( 674 ) Settlements — — 360 Ending Balance $ — $ — $ 181 There were no transfers into or out of Level 3 during the periods presented. 13. REVENUES We disaggregate our revenue from contracts with customers by products and services provided for each of our segments, as we believe it best depicts the nature, amount, timing and uncertainty of our revenue. Revenues attributed to our Equipment Leasing business unit are within the scope of ASC 842, while revenues attributed to our Infrastructure business unit are within the scope of ASC 606, unless otherwise noted. We have elected to exclude sales and other similar taxes from revenues. 97 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) Year Ended December 31, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Equipment leasing revenues Lease income $ 161,985 $ — $ — $ — $ 10,131 $ 172,116 Maintenance revenue 128,819 — — — — 128,819 Finance lease income 1,747 — — — — 1,747 Other revenue 28,871 — — — 4,030 32,901 Total equipment leasing revenues $ 321,422 $ — $ — $ — $ 14,161 $ 335,583 Infrastructure revenues Lease income — 1,688 — 736 — 2,424 Rail revenues — — — 56,803 — 56,803 Terminal services revenues — 44,664 374 — — 45,038 Other revenue — — 11,243 — 4,711 15,954 Total infrastructure revenues — 46,352 11,617 57,539 4,711 120,219 Total revenues $ 321,422 $ 46,352 $ 11,617 $ 57,539 $ 18,872 $ 455,802 Year Ended December 31, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Equipment leasing revenues Lease income $ 166,331 $ — $ — $ — $ 11,145 $ 177,476 Maintenance revenue 101,462 — — — — 101,462 Finance lease income 2,260 — — — — 2,260 Other revenue 11,158 — — — 5,578 16,736 Total equipment leasing revenues $ 281,211 $ — $ — $ — $ 16,723 $ 297,934 Infrastructure revenues Lease income — 1,186 — — — 1,186 Terminal services revenues — 50,887 — — — 50,887 Crude marketing revenues — 8,210 — — — 8,210 Other revenue — — 3,855 — 4,424 8,279 Total infrastructure revenues — 60,283 3,855 — 4,424 68,562 Total revenues $ 281,211 $ 60,283 $ 3,855 $ — $ 21,147 $ 366,496 98 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) Year Ended December 31, 2019 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Equipment leasing revenues Lease income $ 197,305 $ — $ — $ — $ 9,796 $ 207,101 Maintenance revenue 134,914 — — — — 134,914 Finance lease income 2,648 — — — — 2,648 Other revenue 1,808 — — — 2,851 4,659 Total equipment leasing revenues $ 336,675 $ — $ — $ — $ 12,647 $ 349,322 Infrastructure revenues Lease income — 2,306 1,056 — — 3,362 Terminal services revenues — 35,908 7,057 — — 42,965 Crude marketing revenues — 166,134 — — — 166,134 Other revenue — — 14,074 — 2,917 16,991 Total infrastructure revenues — 204,348 22,187 — 2,917 229,452 Total revenues $ 336,675 $ 204,348 $ 22,187 $ — $ 15,564 $ 578,774 Presented below are the contracted minimum future annual revenues to be received under existing operating and finance leases across several market sectors as of December 31, 2021: Operating leases Finance leases 2022 $ 180,243 $ 394 2023 131,397 258 2024 93,421 113 2025 65,849 10 2026 38,426 — Thereafter 43,355 — Total $ 552,691 $ 775 14. LEASES We have commitments as lessees under lease agreements primarily for real estate, equipment and vehicles. Our leases have remaining lease terms ranging from approximately two months to 41 years. 99 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 Short-term lease expense 995 778 3,605 Variable lease expense 1,590 1,379 3,263 Sublease income — — ( 1,032 ) Lease expense from continuing operations 9,556 6,876 11,693 Finance lease expense — — 304 Operating lease expense — — 3,705 Lease expense from discontinued operations — — 4,009 Total lease expense $ 9,556 $ 6,876 $ 15,702 The following table presents information related to our operating leases as of and for the year ended December 31, 2021: Right-of-use assets, net $ 75,344 Lease liabilities $ 73,594 Weighted average remaining lease term 33.5 years Weighted average incremental borrowing rate 5.6 % Cash paid for amounts included in the measurement of operating lease liabilities Continuing operations $ 6,114 The following table presents future minimum lease payments under non-cancellable operating leases as of December 31, 2021: 2022 $ 9,723 2023 8,009 2024 7,035 2025 6,719 2026 5,583 Thereafter 142,878 Total undiscounted lease payments 179,947 Less: Imputed interest 106,353 Total lease liabilities $ 73,594 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. 100 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 15. EQUITY-BASED COMPENSATION In 2015, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to award equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors. As of December 31, 2021, the Incentive Plan provides for the issuance of up to 29.8 million shares. We account for equity-based compensation expense in accordance with ASC 718 Compensation-Stock Compensation and is reported within operating expenses and general and administrative in the Consolidated Statements of Operations. The following table presents our stock-based compensation expense: Year Ended December 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met as of December 31, 2021 2021 2020 2019 Restricted shares $ 3,215 $ 1,676 $ 1,054 $ 3,731 Common units 823 649 455 1,048 Total - continuing operations $ 4,038 $ 2,325 $ 1,509 $ 4,779 Common units - discontinued operations $ — $ — $ 3,114 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 Options Weighted Average Exercise Price Shares Weighted Average Issuance Price Units Weighted Average Issuance Price Outstanding as of December 31, 2020 2,243,692 $ 16.81 578,802 $ 7.64 1,394,475 $ 1.14 Granted 1,684,318 26.35 662,423 8.48 1,052,632 1.14 Less: exercised / vested 165,268 18.22 367,804 8.90 1,223,265 1.13 Less: forfeited and canceled — — 254,180 8.08 263,013 1.14 Outstanding as of December 31, 2021 3,762,742 619,241 960,829 Stock Options Restricted Shares Common Units As of December 31, 2021: Weighted average exercise / issuance price (per share) $ 21.02 $ 8.02 $ 1.14 Aggregate intrinsic value (in thousands) $ 29,951 $ 5,569 $ 1,326 Weighted average remaining contractual term (in years) 8.3 1.0 1.1 During the year ended December 31, 2021, the Manager transferred 25,998 of its options to certain of the Manager’s employees. Stock Options 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. 101 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: Year Ended December 31, 2021 2020 2019 Number of options 1,684,318 129,988 1,262,362 Fair value ($ millions) $ 13.8 $ 0.7 $ 1.8 Ranges Expected volatility The expected stock volatility is based on an assessment of the volatility of our publicly traded common shares 44.78 % - 45.60 % 61.27 % - 62.12 % 21.45 % - 21.89 % Risk free interest rate The risk-free rate is determined using the implied yield currently available on U.S. government bonds with a term consistent with the expected term on the date of grant. 1.34 % - 1.70 % 0.51 % - 0.76 % 1.45 % - 1.67 % Expected dividend yield The expected dividend yield is based on management’s current expected dividend rate. 3.16 % - 3.64 % 6.23 % - 11.79 % 6.58 % - 8.02 % Expected term Expected term used represents the period of time the options granted are expected to be outstanding. 10 years 10 years 10 years Restricted Shares 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. The fair value of these awards was based on the fair value of the operating subsidiary on each grant date, which was estimated using a discounted cash flow analysis that requires the application of discount factors and terminal multiples to projected cash flows. Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date. Common Units We issued 1,052,632 , 831,140 and 1,110,000 common units of our subsidiary during the years ended December 31, 2021, 2020 and 2019, respectively, that had grant date fair values of $ 1.2 million, $ 0.9 million and $ 3.4 million, respectively, and vest over three years . These awards are subject to continued employment and compensation expense is recognized ratably over the vesting periods. The fair value was based on the fair value of the operating subsidiary on the grant date, which is estimated using a discounted cash flow analysis that requires the application of discount factors and terminal multiples to projected cash flows. Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date. 16. 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. 102 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 2023 143 173 2024 261 251 2025 390 354 2026 496 451 Years 2027-2031 4,501 3,252 103 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 17. INCOME TAXES The current and deferred components of the income tax (benefit) provision included in the Consolidated Statements of Operations are as follows: Year Ended December 31, 2021 2020 2019 Current: Federal $ 602 $ ( 110 ) $ 55 State and local 625 328 423 Foreign ( 11 ) 496 188 Total current provision 1,216 714 666 Deferred: Federal ( 2,831 ) ( 1,750 ) 12,937 State and local 260 13 ( 638 ) Foreign 298 ( 4,882 ) 4,845 Total deferred (benefit) provision ( 2,273 ) ( 6,619 ) 17,144 (Benefit from) provision for income taxes: Continuing operations ( 1,057 ) ( 5,905 ) 17,810 Discontinued operations — — 1,076 Total $ ( 1,057 ) $ ( 5,905 ) $ 18,886 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, 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. 104 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. federal statutory rate of 21 % is as follows: Year Ended December 31, 2021 2020 2019 U.S. federal tax at statutory rate 21.0 % 21.0 % 21.0 % Income not subject to tax at statutory rate ( 4.8 ) % ( 7.9 ) % ( 21.7 ) % State and local taxes ( 0.6 ) % ( 0.3 ) % ( 0.1 ) % Foreign taxes ( 0.2 ) % 4.0 % 2.7 % Branch profit tax ( 0.1 ) % — % — % Other ( 3.7 ) % 0.1 % ( 0.6 ) % Change in valuation allowance ( 10.8 ) % ( 11.5 ) % 7.0 % Provision for income taxes 0.8 % 5.4 % 8.3 % Significant components of our deferred tax assets and liabilities are as follows: December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 132,836 $ 105,184 Accrued expenses 2,274 468 Interest expense 25,013 26,531 Operating lease liabilities 23,504 10,119 Investment in Partnerships 17,043 — Other 1,124 2,895 Total deferred tax assets 201,794 145,197 Less valuation allowance ( 142,541 ) ( 98,091 ) Net deferred tax assets 59,253 47,106 Deferred tax liabilities: Investment in partnerships — ( 13,759 ) Fixed assets and goodwill ( 36,972 ) ( 29,448 ) Operating lease right-of-use assets ( 23,772 ) ( 10,062 ) Net deferred tax liabilities $ ( 1,491 ) $ ( 6,163 ) 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. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. We have analyzed our deferred tax assets and have determined, based on the weight of available evidence, that it is more likely than not that a significant portion will not be realized. Accordingly, valuation allowances have been recognized as of December 31, 2021 and 2020 of $ 142.5 million and $ 98.1 million, respectively, related to certain deductible temporary differences and net operating loss carryforwards. A summary of the changes in the valuation allowance is as follows: December 31, 2021 2020 Valuation allowance at beginning of period $ 98,091 $ 79,176 Change due to current year losses 44,458 18,915 Change due to current year releases ( 8 ) — Valuation allowance at end of period $ 142,541 $ 98,091 105 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. federal net operating loss carryforwards of approximately $ 459.3 million that are available to offset future taxable income. If not utilized, $ 169.0 million of these carryforwards will begin to expire in the year 2034, with $ 290.3 million of these carryforwards having no expiration date. As of December 31, 2021, we also had net operating loss carryforwards for Irish income tax purposes of $ 246.9 million, which can be carried forward indefinitely against future business income, and $ 1.9 million of net operating loss carryforwards for Malaysian income tax purposes, which will begin to expire in the year 2025. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the relevant corporate subsidiary's ability to generate sufficient taxable income prior to the expiration of the carryforward period, if any. In addition, the maximum annual use of net operating loss carryforwards may be limited after certain changes in stock ownership. As of and for the period ended December 31, 2021, we had not established a liability for uncertain tax positions as no such positions existed. In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S. federal, state, local and foreign income tax examinations by tax authorities. Generally, we are not subject to examination by taxing authorities for tax years prior to 2018. 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. 18. MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS The Manager is paid annual fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto. In addition, the Manager may be reimbursed for various expenses incurred by the Manager on our behalf, including the costs of legal, accounting and other administrative activities. In May 2015, in connection with our IPO, we entered into the Management Agreement. Additionally, we have entered into certain incentive allocation arrangements with Master GP, which owns approximately 0.05 % of the Partnership and is the general partner of the Partnership. The Manager is entitled to a management fee, incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below) and reimbursement of certain expenses. The management fee is determined by taking the average value of total equity (excluding non-controlling interests) determined on a consolidated basis in accordance with 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 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. One of our subsidiaries allocates and distributes to the Master GP an Income Incentive Allocation with respect to its pre-incentive allocation net income in each calendar quarter as follows: (1) no Income Incentive Allocation in any calendar quarter in which pre-incentive allocation net income, expressed as a rate of return on the average value of our net equity capital (excluding non-controlling interests) at the end of the two most recently completed calendar quarters, does not exceed 2 % for such quarter ( 8 % annualized); (2) 100 % of pre-incentive allocation net income with respect to that portion of such pre-incentive allocation net income, if any, that is equal to or exceeds 2 % but does not exceed 2.2223 % for such quarter; and (3) 10 % of the amount of pre-incentive allocation net income, if any, that exceeds 2.2223 % for such quarter. These calculations will be prorated for any period of less than three months. Capital Gains Incentive Allocation is calculated and distributable in arrears as of the end of each calendar year and is equal to 10 % of our pro rata share of cumulative realized gains from the date of the IPO through the end of the applicable calendar year, net of our pro rata share of cumulative realized or unrealized losses, the cumulative non-cash portion of equity-based compensation expenses and all realized gains upon which prior performance-based Capital Gains Incentive Allocation payments were made to the Master GP. The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation: Year Ended December 31, 2021 2020 2019 Management fees $ 16,322 $ 18,519 $ 14,828 Income incentive allocation — — — Capital gains incentive allocation — — 21,231 Total $ 16,322 $ 18,519 $ 36,059 106 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) We pay all of our operating expenses, except those specifically required to be borne by the Manager under the Management Agreement. The expenses required to be paid by us include, but are not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of our assets, legal and auditing fees and expenses, the compensation and expenses of our independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of ours (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of ours, costs and expenses incurred in contracting with third parties (including affiliates of the Manager), the costs of printing and mailing proxies and reports to our shareholders, costs incurred by the Manager or its affiliates for travel on our behalf, costs associated with any computer software or hardware that is used by us, costs to obtain liability insurance to indemnify our directors and officers and the compensation and expenses of our transfer agent. 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. The Manager is responsible for all of its other costs incident to the performance of its duties under the Management Agreement, including compensation of the Manager’s employees, rent for facilities and other “overhead” expenses; we will not reimburse the Manager for these expenses. The following table summarizes our reimbursements to the Manager: Year Ended December 31, 2021 2020 2019 Classification in the Consolidated Statements of Operations: General and administrative expenses $ 8,761 $ 9,552 $ 11,017 Acquisition and transaction expenses 2,153 2,081 3,399 Total $ 10,914 $ 11,633 $ 14,416 If we terminate the Management Agreement, we will generally be required to pay the Manager a termination fee. The termination fee is equal to the amount of the management fee during the 12 months immediately preceding the date of the termination. In addition, an Incentive Allocation Fair Value Amount will be distributable to the Master GP if the Master GP is removed due to the termination of the Management Agreement in certain specified circumstances. The Incentive Allocation Fair Value Amount is an amount equal to the Income Incentive Allocation and the Capital Gains Incentive Allocation that would be paid to the Master GP if our assets were sold for cash at their then current fair market value (as determined by an appraisal, taking into account, among other things, the expected future value of the underlying investments). Upon the successful completion of an offering of our common shares or other equity securities (including securities issued as consideration in an acquisition), we grant the Manager options to purchase common shares in an amount equal to 10 % of the number of common shares being sold in the offering (or if the issuance relates to equity securities other than our common shares, options to purchase a number of common shares equal to 10 % of the gross capital raised in the equity issuance divided by the fair market value of a common share as of the date of issuance), with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser or attributed to such securities in connection with an acquisition (or the fair market value of a common share as of the date of the equity issuance if it relates to equity securities other than our common shares). Any ultimate purchaser of common shares for which such options are granted may be an affiliate the Manager. The following table summarizes amounts due to the Manager, which are included within accounts payable and accrued liabilities in the Consolidated Balance Sheets: December 31, 2021 2020 Accrued management fees $ 1,495 $ 1,461 Other payables 2,326 1,317 As of December 31, 2021 and 2020, no amounts were recorded as a receivable from the Manager. Other Affiliate Transactions As of December 31, 2021 and 2020, an affiliate of our Manager owns an approximately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the accompanying consolidated financial statements. The carrying amount of this non-controlling interest at December 31, 2021 and 2020 was $ 9.1 million and $ 17.2 million, respectively. 107 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: Year Ended December 31, 2021 2020 2019 Non-controlling interest share of net loss $ ( 26,250 ) $ ( 16,483 ) $ ( 17,357 ) 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. Additionally, other investors in FYX are also affiliates of our Manager. See Note 8 for additional information related to FYX. During the year ended December 31, 2020, we granted options to the Manager in connection with preferred shares sold under the ATM Program (as defined in Note 20). See Note 20 for additional information. In connection with the Capital Call Agreement related to the Series 2016 Bonds, we entered into a Fee and Support Agreement with an affiliate of our Manager. 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 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. 19. SEGMENT INFORMATION Our reportable segments represent strategic business units comprised of investments in different types of transportation and infrastructure assets. 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, 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. Additionally, in accordance with ASC 280, we assessed our reportable segments. We 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 (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. The chief operating decision maker evaluates investment performance for each reportable segment primarily based on Adjusted EBITDA. 108 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) 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 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. GAAP. The following tables set forth certain information for each reportable segment: I. For the Year Ended December 31, 2021 Year Ended December 31, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Revenues Equipment leasing revenues $ 321,422 $ — $ — $ — $ 14,161 $ 335,583 Infrastructure revenues — 46,352 11,617 57,539 4,711 120,219 Total revenues 321,422 46,352 11,617 57,539 18,872 455,802 Expenses Operating expenses 56,072 48,255 14,403 28,987 24,747 172,464 General and administrative — — — — 17,409 17,409 Acquisition and transaction expenses 3,840 — — 2,841 15,260 21,941 Management fees and incentive allocation to affiliate — — — — 16,322 16,322 Depreciation and amortization 139,972 36,013 9,052 8,320 8,399 201,756 Asset impairment 10,463 — — — — 10,463 Interest expense — 14,812 1,147 53 155,024 171,036 Total expenses 210,347 99,080 24,602 40,201 237,161 611,391 Other income (expense) Equity in (losses) earnings of unconsolidated entities ( 1,403 ) — ( 11,429 ) — 98 ( 12,734 ) 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 (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 ) 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 ) Less: Net loss from continuing operations attributable to non-controlling interests in consolidated subsidiaries — ( 26,250 ) ( 222 ) — — ( 26,472 ) Less: Dividends on preferred shares — — — — 24,758 24,758 Net income (loss) attributable to shareholders from continuing operations $ 157,225 $ ( 31,434 ) $ ( 24,209 ) $ 15,313 $ ( 245,887 ) $ ( 128,992 ) 109 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations: Year Ended December 31, 2021 Equipment Leasing Infrastructure 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 Add: Non-controlling share of Adjusted EBITDA 12,508 Add: Equity in losses of unconsolidated entities ( 12,734 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 27,892 ) Less: Interest expense ( 171,036 ) Less: Depreciation and amortization expense ( 229,734 ) Less: Incentive allocations — Less: Asset impairment charges ( 10,463 ) Less: Changes in fair value of non-hedge derivative instruments 2,220 Less: Losses on the modification or extinguishment of debt and capital lease obligations ( 3,254 ) Less: Acquisition and transaction expenses ( 21,941 ) Less: Equity-based compensation expense ( 4,038 ) Less: Benefit from income taxes 1,057 Net loss attributable to shareholders from continuing operations $ ( 128,992 ) Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows: Year Ended December 31, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Revenues Africa $ 235 $ — $ — $ — $ — $ 235 Asia 114,389 — — — 14,161 128,550 Europe 133,537 — — — — 133,537 North America 62,121 46,352 11,617 57,539 4,711 182,340 South America 11,140 — — — — 11,140 Total revenues $ 321,422 $ 46,352 $ 11,617 $ 57,539 $ 18,872 $ 455,802 110 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) II. For the Year Ended December 31, 2020 Year Ended December 31, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Revenues Equipment leasing revenues $ 281,211 $ — $ — $ — $ 16,723 $ 297,934 Infrastructure revenues — 60,283 3,855 — 4,424 68,562 Total revenues 281,211 60,283 3,855 — 21,147 366,496 Expenses Operating expenses 20,667 53,072 10,327 — 25,446 109,512 General and administrative — — — — 18,159 18,159 Acquisition and transaction expenses 6,687 — 907 — 2,274 9,868 Management fees and incentive allocation to affiliate — — — — 18,519 18,519 Depreciation and amortization 133,904 29,034 1,497 — 7,965 172,400 Asset impairment 33,978 — — — — 33,978 Interest expense — 9,426 1,335 — 87,445 98,206 Total expenses 195,236 91,532 14,066 — 159,808 460,642 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 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 ) (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 ) Less: Net loss from continuing operations attributable to non-controlling interests in consolidated subsidiaries — ( 16,483 ) ( 39 ) — — ( 16,522 ) Less: Dividends on preferred shares — — — — 17,869 17,869 Net income (loss) attributable to shareholders from continuing operations $ 88,649 $ ( 19,684 ) $ ( 11,603 ) $ — $ ( 163,732 ) $ ( 106,370 ) 111 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations: Year Ended December 31, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Adjusted EBITDA $ 288,752 $ 16,118 $ ( 2,600 ) $ — $ ( 58,964 ) $ 243,306 Add: Non-controlling share of Adjusted EBITDA 9,637 Add: Equity in losses of unconsolidated entities ( 5,039 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 1,208 ) Less: Interest expense ( 98,206 ) Less: Depreciation and amortization expense ( 202,746 ) Less: Incentive allocations — Less: Asset impairment charges ( 33,978 ) Less: Changes in fair value of non-hedge derivative instruments ( 181 ) Less: Losses on the modification or extinguishment of debt and capital lease obligations ( 11,667 ) Less: Acquisition and transaction expenses ( 9,868 ) Less: Equity-based compensation expense ( 2,325 ) Less: 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: Year Ended December 31, 2020 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Revenues Africa $ 10,259 $ — $ — $ — $ — $ 10,259 Asia 110,057 — — — 16,637 126,694 Europe 124,670 — — — — 124,670 North America 32,961 60,283 3,855 — 4,510 101,609 South America 3,264 — — — — 3,264 Total revenues $ 281,211 $ 60,283 $ 3,855 $ — $ 21,147 $ 366,496 112 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) III. For the Year Ended December 31, 2019 Year Ended December 31, 2019 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Revenues Equipment leasing revenues $ 336,675 $ — $ — $ — $ 12,647 $ 349,322 Infrastructure revenues — 204,348 22,187 — 2,917 229,452 Total revenues 336,675 204,348 22,187 — 15,564 578,774 Expenses Operating expenses 17,668 231,506 24,854 — 17,544 291,572 General and administrative — — — — 16,905 16,905 Acquisition and transaction expenses 8,641 — 5,008 — 3,974 17,623 Management fees and incentive allocation to affiliate — — — — 36,059 36,059 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 Total expenses 155,299 270,568 46,149 — 159,477 631,493 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 Loss on extinguishment of debt — — — — — — Interest income 104 118 289 — 20 531 Other income — 634 1,809 — 1,002 3,445 Total other income 80,229 5,096 118,566 — 960 204,851 Income (loss) from continuing operations before income taxes 261,605 ( 61,124 ) 94,604 — ( 142,953 ) 152,132 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 Less: Net loss from continuing operations attributable to non-controlling interests in consolidated subsidiaries — ( 17,356 ) ( 215 ) — — ( 17,571 ) Less: 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 ) $ 150,055 113 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (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: Year Ended December 31, 2019 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Adjusted EBITDA $ 429,398 $ ( 6,160 ) $ 114,760 $ — $ ( 34,590 ) $ 503,408 Add: Non-controlling share of Adjusted EBITDA 9,859 Add: Equity in losses of unconsolidated entities ( 2,375 ) Less: Pro-rata share of Adjusted EBITDA from unconsolidated entities 1,387 Less: Interest expense ( 95,585 ) Less: Depreciation and amortization expense ( 199,185 ) Less: Incentive allocations ( 21,231 ) Less: Asset impairment charges ( 4,726 ) Less: Changes in fair value of non-hedge derivative instruments ( 4,555 ) Less: Losses on the modification or extinguishment of debt and capital lease obligations — Less: Acquisition and transaction expenses ( 17,623 ) Less: Equity-based compensation expense ( 1,509 ) Less: Provision for income taxes ( 17,810 ) Net income attributable to shareholders from continuing operations $ 150,055 Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows: Year Ended December 31, 2019 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Revenues Africa $ 14,542 $ — $ — $ — $ — $ 14,542 Asia 119,289 — — — 12,647 131,936 Europe 157,942 — — — — 157,942 North America 36,391 204,348 22,187 — 2,917 265,843 South America 8,511 — — — — 8,511 Total revenues $ 336,675 $ 204,348 $ 22,187 $ — $ 15,564 $ 578,774 114 FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in tables in thousands, unless otherwise noted) IV. Balance Sheet and location of long-lived assets The following tables sets forth summarized balance sheet information and the geographic location of property, plant and equipment and leasing equipment, net: December 31, 2021 Equipment Leasing Infrastructure 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 Debt, net — 693,624 25,000 — 2,501,587 3,220,211 Total liabilities 214,564 820,725 50,651 109,325 2,544,489 3,739,754 Non-controlling interests in equity of consolidated subsidiaries — ( 2,604 ) 1,888 — 524 ( 192 ) Total equity 1,884,415 463,707 266,248 652,969 ( 2,143,239 ) 1,124,100 Total liabilities and equity $ 2,098,979 $ 1,284,432 $ 316,899 $ 762,294 $ 401,250 $ 4,863,854 December 31, 2021 Equipment Leasing Infrastructure Aviation Leasing Jefferson Terminal Ports and Terminals Transtar Corporate and Other Total Property, plant and equipment and leasing equipment, net Asia $ 368,298 $ — $ — $ — $ 175,313 $ 543,611 Europe 839,555 — — — — 839,555 North America 265,203 786,566 280,210 481,826 5,003 1,818,808 South America 245,532 — — — — 245,532 Total property, plant and equipment and leasing equipment, net $ 1,718,588 $ 786,566 $ 280,210 $ 481,826 $ 180,316 $ 3,447,506 December 31, 2020 Equipment Leasing Infrastructure 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 Debt, net — 253,473 25,000 — 1,626,289 1,904,762 Total liabilities 219,692 365,629 38,242 — 1,665,093 2,288,656 Non-controlling interests in equity of consolidated subsidiaries — 20,785 1,354 — 524 22,663 Total equity 1,484,513 624,299 361,975 — ( 1,371,466 ) 1,099,321 Total liabilities and equity $ 1,704,205 $ 989,928 $ 400,217 $ — $ 293,627 $ 3,387,977 115 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 Transtar Corporate and Other Total Property, plant and equipment and leasing equipment, net Asia $ 445,566 $ — $ — $ — $ 56,702 $ 502,268 Europe 774,300 — — — — 774,300 North America 208,190 702,393 269,680 — 117,782 1,298,045 South America 25,009 — — — — 25,009 Total property, plant and equipment and leasing equipment, net $ 1,453,065 $ 702,393 $ 269,680 $ — $ 174,484 $ 2,599,622 20. EARNINGS PER SHARE AND EQUITY Basic earnings per common share (“EPS”) is calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities. Diluted EPS is calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities and potentially dilutive securities. Potentially dilutive securities are calculated using the treasury stock method. The calculation of basic and diluted EPS is presented below. Year Ended December 31, (in thousands, except share and per share data) 2021 2020 2019 Net (loss) income from continuing operations $ ( 130,706 ) $ ( 105,023 ) $ 134,322 Net income from discontinued operations, net of income taxes — 1,331 73,462 Net (loss) income ( 130,706 ) ( 103,692 ) 207,784 Less: Net (loss) income attributable to non-controlling interests in consolidated subsidiaries: Continuing operations ( 26,472 ) ( 16,522 ) ( 17,571 ) Discontinued operations — — 247 Less: Dividends on preferred shares 24,758 17,869 1,838 Net (loss) income attributable to shareholders $ ( 128,992 ) $ ( 105,039 ) $ 223,270 Weighted average shares outstanding: Basic 89,922,088 86,015,702 85,992,019 Diluted 89,922,088 86,015,702 86,029,363 Basic EPS: Continuing operations $ ( 1.43 ) $ ( 1.24 ) $ 1.74 Discontinued operations $ — $ 0.02 $ 0.85 Diluted EPS: Continuing operations $ ( 1.43 ) $ ( 1.24 ) $ 1.74 Discontinued operations $ — $ 0.02 $ 0.85 The calculation of Diluted EPS excludes 898,299 , 24,652 and 150,981 shares for the years ended December 31, 2021, 2020 and 2019, respectively, because the impact would be anti-dilutive. 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 17,155 common shares to certain directors as compensation during the year ended December 31, 2021. 116 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 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. 21. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company and its subsidiaries may be involved in various claims, legal proceedings, or may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. Within our offshore energy business, a lessee did not fulfill their obligation under their charter arrangement, therefore we are pursuing rights afforded to us under the charter and the range of potential losses against the obligation is $ 0.0 million to $ 3.3 million. Our maximum exposure under other arrangements is unknown as no additional claims have been made. We believe the risk of loss in connection with such arrangements is remote. We have also entered into an arrangement with our non-controlling interest holder of Repauno, whereby the non-controlling interest holder may receive additional payments contingent upon the achievement of certain service conditions, not to exceed $ 15.0 million. We will account for such amounts when and if such conditions are achieved. The contingency related to $ 5.0 million of the total $ 15.0 million was resolved during the 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. 22. SUBSEQUENT EVENTS In January 2022, we issued 8,311 common shares to certain directors as compensation. Dividends 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 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. 117 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.