What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-04-29 compared with 2021-10-29 · 218 added, 297 removed, 363 unchanged (59% of the section changed)

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We are externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), which has a dedicated team of experienced professionals focused on the acquisition of transportation and infrastructure assets since 2002.

As of September 30, 2021, we had total consolidated assets of $4.7 billion and total equity of $1.2 billion.

As of March 31, 2022, we had total consolidated assets of $4.8 billion and total equity of $0.8 billion.

Transfer of Stock Exchange Listing to Nasdaq

Effective on April 26, 2022, the listings of our common shares and preferred shares were transferred to The Nasdaq Global Select Market from the New York Stock Exchange.

Our common shares continue to trade under the ticker symbol “FTAI,” and our preferred shares will trade under the ticker symbols “FTAIP,” “FTAIO” and “FTAIN,” respectively.

Impact of Russia’s Invasion of Ukraine

Due to Russia’s invasion of Ukraine during the first quarter of 2022, the United States, European Union, United Kingdom, and others have imposed economic sanctions and export controls against Russia and Russia’s aviation industry.

The sanctions include but are not limited to the ban on the export and sale or lease of all aircraft, engines, and equipment and on all related repair and maintenance services to Russia and Russian airlines.

We have complied, and will continue to comply, with all applicable sanctions and we have terminated the leases of all our aircraft and engines with Russian airlines.

As a result of the sanctions imposed on Russian airlines and related lease terminations, we recognized approximately $47.9 million in bad debt expense during the three months ended March 31, 2022.

We continue to pursue efforts to remove and repossess all of our aircraft and engines from Russia and Ukraine.

As of March 31, 2022, we had detained six of our aircraft and four of our engines outside of Russia.

As of March 31, 2022, four aircraft and two engines were still located in Ukraine and eight aircraft and 18 engines were still located in Russia.

We determined that it is unlikely that we will regain possession of the aircraft that have not yet been recovered from Ukraine and Russia.

As a result, we recognized an impairment charge totaling $122.8 million, net of maintenance deposits, to write-off the carrying value of leasing equipment assets that we have not recovered from Ukraine and Russia.

Our lessees are required to provide insurance coverage with respect to leased aircraft and engines, and we are named as insureds under those policies in the event of a total loss of an aircraft or engine.

We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us.

The insured value of the aircraft and engines that remain in Ukraine and Russia is approximately $294.0 million.

We intend to pursue all our claims under these policies.

However, the timing and amount of any recoveries under these policies are uncertain.

The extent of the impact of Russia’s invasion of Ukraine and the related sanctions on our operational and financial performance, including the ability for us to recover our leasing equipment in the region, will depend on future developments, including the duration of the conflict, sanctions and restrictions imposed by Russian and international governments, all of which remain uncertain.

Impact of COVID-19

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

Market conditions due to the outbreak of COVID-19 resulted in asset impairment charges and a decline in our equipment leasing revenues during the nine months ended September 30, 2021.

Market conditions due to the outbreak of COVID-19 resulted in asset impairment charges and a decline in our equipment leasing revenues during the years ended December 31, 2021 and 2020.

However, our equipment leasing revenues have continued to recover during the three months ended March 31, 2022.

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

A number of these lessees have been placed on non-accrual status as of September 30, 2021;

A number of these lessees have been placed on non-accrual status as of March 31, 2022;

however, we believe our overall portfolio exposure is limited by maintenance reserves and security deposits which are secured against lessee defaults.

The value of these deposits was $134.4 million as of September 30, 2021.

The value of these deposits was $103.8 million as of March 31, 2022.

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

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

Risk Factors—“The COVID-19 pandemic has severely disrupted the global economy and may have, and the emergence of similar crises could have, material adverse effects on our business, results of operations or financial condition.”

Risk Factors—“The COVID-19 pandemic has severely disrupted the global

economy and may have, and the emergence of similar crises could have, material adverse effects on our business, results of operations or financial condition.”

Operating Segments

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

The Jefferson Terminal segment consists of a multi-modal crude and refined products terminal and other related assets which were acquired in 2014.

The Ports and Terminals segment consists of Repauno, acquired in 2016, a 1,630-acre deep-water port located along the Delaware River with an underground storage cavern and multiple industrial development opportunities.

Additionally, Ports and Terminals includes an equity method investment (“Long Ridge”), which is a 1,660-acre multi-modal port located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant under construction.

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

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

The Ports and Terminals segment consists of Repauno, which is a 1,630-acre deep-water port located along the Delaware River with an underground storage cavern, a new multipurpose dock, a rail-to-ship transloading system and multiple industrial development opportunities, and an equity method investment (“Long Ridge”), which is a 1,660-acre multi-modal port located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant in operation.

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

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

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

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 and (iii) railroad assets which consist of equipment that support a railcar cleaning business.

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

Each segment requires different investment strategies.

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

The accounting policies of the segments are the same as those described in Note 2 to the consolidated financial statements;

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

Spin-Off of FTAI Infrastructure

On April 28, 2022, the Board of Directors unanimously approved the previously announced spin-off of FTAI’s infrastructure business (“FTAI Infrastructure”).

FTAI Infrastructure publicly filed Form 10 with the SEC on April 29, 2022.

FTAI Infrastructure will be spun out in an entity taxed as a corporation for U.S.

federal income tax purposes and will hold, among other things, FTAI’s (i) Jefferson Terminal business, (ii) Repauno business, (iii) Long Ridge investment, and (iv) Transtar business.

FTAI Infrastructure will retain all related project-level debt of those entities.

In connection with the closing of the spin-off, FTAI Infrastructure intends to issue up to $300.0 million of preferred stock and warrants and incur up to $500.0 million of senior secured indebtedness, the net proceeds of which will be remitted to FTAI as part of the separation.

FTAI expects to use the proceeds received from FTAI Infrastructure to repay all outstanding borrowings under its 2021 bridge loans and its revolving credit facility with the remaining proceeds to repay a portion of its 6.50% senior unsecured notes due 2025.

FTAI expects to retain the aviation business and certain other assets and FTAI’s remaining outstanding corporate indebtedness.

FTAI Infrastructure will be externally managed by the Manager.

In connection with the spin-off, the Company and the Manager have agreed to assign the Company’s existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Manager have agreed to amend and restate the agreement effective upon on the closing of the spin.

The amended and restated management agreement will have an initial term of six years.

Similar to the Company’s existing management arrangements, the Manager will be entitled to a management fee, incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) and reimbursement of certain expenses on substantially similar terms as the existing arrangements with the Manager, except that all fees will be paid pursuant to the amended and restated management agreement rather than by one of FTAI Infrastructure’s subsidiaries.

FTAI and certain of its subsidiaries will enter into a new management agreement with the Manager.

The new management agreement will have an initial term of six years.

The Manager will be entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the existing arrangements with the Manager.

Prior to the merger described below, our Manager will remain entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they exist today.

Following the merger, FTAI will enter into a Services and Profit Sharing Agreement (the “Services Agreement”), with a subsidiary of FTAI and Fortress Worldwide Transportation and Infrastructure

Master GP LLC (“Master GP”), pursuant to which Master GP will be entitled to incentive allocations on substantially similar terms as the existing arrangements.

On December 27, 2017, SoftBank Group Corp.

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The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure.

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

generally accepted accounting principles (“U.S.

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

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

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

Comparison of the three and nine months ended September 30, 2021 and 2020

Adjusted EBITDA is defined as net income (loss) attributable to shareholders, 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.

Comparison of the three months ended March 31, 2022 and 2021

The following table presents our consolidated results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

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Terminal services revenues 12,784 10,421 2,363

Crude marketing revenues — — — — 8,210 (8,210)

Other revenue (1,144) 9,691 (10,835)

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Other (expense) income

Equity in losses of unconsolidated entities (4,082) (2,501) (1,581) (9,860) (5,445) (4,415)

Gain (loss) on sale of assets, net 12,685 (1,114) 13,799 17,483 (2,165) 19,648

Loss on extinguishment of debt — — — (3,254) (4,724) 1,470

Equity in (losses) earnings of unconsolidated entities (24,013) 1,374 (25,387)

Gain on sale of assets, net 16,288 811 15,477

Interest income 656 285 371

Other (expense) income (459) 181 (640)

Total other income (expense) 1,018 (3,557) 4,575 (3,180) (12,181) 9,001

Loss from continuing operations before income taxes (39,937) (27,695) (12,242) (112,892) (51,662) (61,230)

Benefit from income taxes (494) (2,486) 1,992 (1,965) (6,334) 4,369

Net loss from continued operations (39,443) (25,209) (14,234) (110,927) (45,328) (65,599)

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

Total other (expense) income (7,528) 2,651 (10,179)

Loss from before income taxes (226,173) (34,707) (191,466)

Provision for income taxes 3,486 169 3,317

Net loss (229,659) (34,876) (194,783)

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Net loss attributable to shareholders $ (228,984) $ (34,540) $ (194,444)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

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

Three Months Ended March 31, Change

(in thousands) 2022 2021

Net loss attributable to shareholders from continuing operations $ (38,871) $ (25,958) $ (12,913) $ (109,945) $ (45,847) $ (64,098)

Benefit from income taxes (494) (2,486) 1,992 (1,965) (6,334) 4,369

Net loss attributable to shareholders $ (228,984) $ (34,540) $ (194,444)

Provision for income taxes 3,486 169 3,317

Equity-based compensation expense 709 1,114 (405)

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5,661 2,402 3,259

Equity in losses of unconsolidated entities 4,082 2,501 1,581 9,860 5,445 4,415

Equity in losses (earnings) of unconsolidated entities 24,013 (1,374) 25,387

Non-controlling share of Adjusted EBITDA (3)

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(1) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) depreciation and amortization expense of $53,368 and $42,626, (ii) lease intangible amortization of $1,266 and $953 and (iii) amortization for lease incentives of $5,177 and $8,953, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(1) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) depreciation and amortization expense of $58,301 and $44,535, (ii) lease intangible amortization of $3,658 and $752 and (iii) amortization for lease incentives of $8,355 and $7,356, respectively.

(2) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) net loss of $(4,163) and $(2,590), (ii) interest expense of $300 and $367, (iii) depreciation and amortization expense of $3,009 and $1,389, (iv) acquisition and transaction expenses of $0 and $(79) and (v) changes in fair value of non-hedge derivative instruments of $8,324 and $1,033, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(i) net loss of $(10,336) and $(5,593), (ii) interest expense of $827 and $848, (iii) depreciation and amortization expense of $6,821 and $3,797, (iv) acquisition and transaction expenses of $0 and $533, (v) changes in fair value of non-hedge derivative instruments of $12,525 and $248 and (vi) asset impairment of $24 and $0, respectively.

(3) Includes the following items for the three months ended September 30, 2021 and 2020:

(2) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) net (loss) income of $(21,890) and $1,180, (ii) interest expense of $6,463 and $187, (iii) depreciation and amortization expense of $6,340 and $1,912, (iv) acquisition and transaction expenses of $3 and $0, (v) changes in fair value of non-hedge derivative instruments of $14,615 and $(877), (vi) equity-based compensation of $98 and $0 and (vii) asset impairment of $32 and $0, respectively.

(3) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) equity-based compensation of $127 and $198, (ii) provision for income taxes of $15 and $13, (iii) interest expense of $1,384 and $281, (iv) depreciation and amortization expense of $2,263 and $1,811 and (v) changes in fair value of non-hedge derivative instruments of $27 and $(274), respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(i) equity based compensation of $620 and $196, (ii) provision for income taxes of $36 and $44, (iii) interest expense of $1,940 and $1,553, (iv) depreciation and amortization expense of $6,177 and $4,583, (v) changes in fair value of non-hedge derivative instruments of $(67) and $38 and (vi) loss on extinguishment of debt of $0 and $992, respectively.

Comparison of the three months ended September 30, 2021 and 2020

Total revenues increased $52.3 million primarily due to higher revenues of $24.5 million in the Transtar segment and $27.4 million in the Aviation Leasing segment.

Comparison of the three months ended March 31, 2022 and 2021

Total revenues increased $60.7 million primarily due to higher revenues of $34.1 million in the Transtar segment and $28.9 million in the Aviation Leasing segment, partially offset by lower revenues of $10.1 million in the Ports and Terminals segment.

Equipment Leasing

Maintenance revenue increased $14.6 million, primarily due to an increase in the number of engines placed on lease and higher aircraft and engine utilization.

Other revenue increased $12.5 million, which primarily reflects (i) an increase of $11.1 million in the Aviation Leasing segment primarily due to an increase in engine parts sales and higher end-of-lease redelivery compensation and (ii) an increase of $1.4 million in the offshore energy business which reflects higher victualling income on one of our vessels.

Lease income increased $2.3 million, primarily due to an increase in the number of aircraft and engines placed on lease, partially offset by an increase in aircraft redelivered.

Maintenance revenue increased $21.2 million, primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and the recognition of maintenance deposits due to the early lease termination.

Other revenue increased $15.2 million, which primarily reflects an increase of $13.9 million in the Aviation Leasing segment primarily due to an increase in engine modules, spare parts and used material inventory sales.

Lease income decreased $1.0 million, which primarily reflects (i) a decrease of $5.9 million in the Aviation Leasing segment primarily due to the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines, partially offset by an increase in the number of aircraft and engines placed on lease, partially offset by (ii) an increase of $4.9 million in the offshore energy business as one of our vessels was on-hire longer in 2022 compared to 2021.

Infrastructure

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Other revenue decreased $10.8 million, primarily due to a loss on butane forward purchase contracts at Repauno.

Comparison of the nine months ended September 30, 2021 and 2020

Total revenues increased $19.2 million, primarily due to higher revenues of $24.5 million in the Transtar segment, $8.4 million in the Ports and Terminals segment and $3.7 million in the Aviation Leasing segment, partially offset by lower revenues of $15.4 million in the Jefferson Terminal segment.

Equipment Leasing

Lease income decreased $9.0 million, primarily due to an increase in aircraft redelivered and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft and engines placed on lease.

Other revenue increased $7.3 million, primarily due to an increase in engine parts sales, partially offset by lower end-of-lease redelivery compensation and the settlement of an engine loss during the nine months ended September 30, 2020.

Maintenance revenue increased $3.1 million, primarily due to an increase in aircraft and engine utilization, partially offset by an increase in aircraft and engines redelivered and a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft.

Infrastructure

Rail revenues increased $24.2 million due to our acquisition of Transtar in July 2021.

Other revenue increased $8.6 million, primarily due to (i) a gain on butane forward purchase and sale contracts at Repauno and (ii) operations commencing at the LPG facility at Repauno.

Crude marketing revenues decreased $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019.

Terminal services revenues decreased $7.5 million which primarily reflects lower volumes at Jefferson Terminal due to lower global oil demand related to COVID-19.

Comparison of the three months ended September 30, 2021 and 2020

Total expenses increased $69.1 million, primarily due to higher (i) interest expense, (ii) operating expenses, (iii) depreciation and amortization and (iv) acquisition and transaction expenses, partially offset by lower (v) asset impairment charges.

Interest expense increased $27.6 million, primarily due to:

• an increase of $25.0 million in Corporate and Other which reflects an increase in the average outstanding debt of approximately $892.7 million due to increases in (i) the Senior Notes due 2028 of $667.5 million, (ii) the Bridge Loans (as defined below in Liquidity and Capital Resources) of $433.3 million, (iii) the Senior Notes due 2025 of $406.8 million and (iv) the Revolving Credit Facility (as defined below in Liquidity and Capital Resources) of $83.3 million, partially offset by a decrease in (v) the Senior Notes due 2022 of $698.3 million, which was redeemed in full in May 2021.

• an increase of $2.6 million at Jefferson Terminal due to the issuance of the Series 2021 Bonds in August 2021 and EB-5 Loan Agreement which commenced in January 2021.

Comparison of the three months ended March 31, 2022 and 2021

Total expenses increased $242.0 million, primarily due to higher (i) asset impairment charges, (ii) operating expenses, (iii) interest expense, (iv) depreciation and amortization and (v) acquisition and transaction expenses.

Asset impairment increased $120.7 million due to impairment charges related to assets held in Ukraine and Russia.

Operating expenses increased $83.9 million which primarily reflects:

• an increase in bad debt of $48.5 million which reflects the write-off of receivables related to assets in Russia and Ukraine;

• an increase in compensation and benefits of $12.1 million primarily due to the acquisition of Transtar in July 2021;

• an increase of $8.2 million in facility operating expense which primarily reflects (i) an increase of $3.2 million due to the acquisition of Transtar in July 2021, (ii) an increase of $2.6 million in the Aviation Leasing segment primarily due to shipping and storage costs and (iii) an increase of $1.3 million in the Jefferson Terminal segment primarily due to an increase in third-party services;

• an increase of $9.9 million in costs associated with the sale of inventory in the Aviation Leasing segment;

• an increase of $1.5 million in repairs and maintenance primarily due to (i) the acquisition of Transtar in July 2021 and (ii) increases in the Aviation Leasing segment and our offshore energy business;

• an increase of $1.3 million in bad debt expense in the Aviation Leasing segment.

Depreciation and amortization increased $10.7 million primarily due to (i) the acquisition of Transtar in July 2021 and (ii) assets placed into service at Repauno and Jefferson Terminal.

Acquisition and transaction expenses increased $4.7 million primarily due to professional fees related to the acquisition of Transtar in July 2021.

Asset impairment decreased $3.1 million due to higher impairment charges in 2020 compared to 2021 in the Aviation Leasing segment.

Comparison of the nine months ended September 30, 2021 and 2020

Total expenses increased $89.4 million, primarily due to higher (i) interest expense, (ii) operating expenses and (iii) depreciation and amortization, partially offset by lower (iv) asset impairment charges.

• an increase of $9.0 million in facility operating expense which primarily reflects (i) an increase of $4.4 million due to the acquisition of Transtar in July 2021, (ii) an increase of $1.4 million in the Jefferson Terminal segment due to increased activity, (iii) an increase of $1.8 million in the offshore energy business due to higher vessel utilization and (iv) an increase of $1.4 million in the Aviation Leasing segment primarily due to shipping and storage costs.

Interest expense increased $17.6 million, primarily due to:

• an increase of $52.3 million in Corporate and Other which reflects an increase in the average outstanding debt of approximately $688.8 million primarily due to increases in (i) the Senior Notes due 2025 of $407.1 million, (ii) the Senior Notes due 2028 of $389.2 million, (iii) the Senior Notes due 2027 of $266.7 million, (iv) the Bridge Loans of $144.4 million and (v) the Revolving Credit Facility of $10.0 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $520.7 million, which was redeemed in full in May 2021.

• an increase of $1.3 million at Jefferson Terminal due to (i) the issuance of the Series 2021 Bonds in August 2021 and the EB-5 Loan Agreement which commenced in January 2021, partially offset by (ii) a debt refinancing in the first quarter of 2020 which lowered their average interest rate.

Operating expenses increased $27.8 million which primarily reflects:

• an increase of $10.7 million in compensation and benefits primarily due to (i) the acquisition of Transtar in July 2021 and (ii) increases at Repauno and our railcar cleaning business due to an increase in headcount;

• an increase of $7.0 million in facility operating expense which primarily reflects (i) an increase of $4.1 million in the Aviation Leasing segment primarily due to shipping and storage costs, (ii) an increase of $3.2 million due to the acquisition of Transtar in July 2021 and (iii) an increase of $1.1 million at Repauno primarily due to increased activity;

• an increase of $3.4 million in repairs and maintenance primarily due to (i) our offshore energy business and (ii) the acquisition of Transtar in July 2021;

• an increase of $2.2 million in insurance costs in the Jefferson Terminal segment due to build out of new assets.

Depreciation and amortization increased $18.7 million primarily due to (i) assets placed into service at Repauno and Jefferson Terminal, (ii) the acquisition of Transtar in July 2021 and (iii) additional assets acquired in the Aviation Leasing segment.

Asset impairment decreased $11.3 million due to higher impairment charges in 2020 compared to 2021 in the Aviation Leasing segment.

• an increase of $12.6 million in Corporate and Other which reflects an increase in the average outstanding debt of approximately $956.1 million due to increases in (i) the Senior Notes due 2028 of $1.0 billion, (ii) the 2021 Bridge Loans of $260.0 million and (iii) the Revolving Credit Facility of $93.5 million, partially offset by a decrease in (iv) the Senior Notes due 2022 of $400.0 million, which was redeemed in full in May 2021;

• an increase of $4.9 million at Jefferson Terminal due to the issuance of the Series 2021 Bonds in August 2021 and additional borrowings related to the EB-5 Loan Agreement.

Depreciation and amortization increased $13.8 million primarily due to (i) additional assets acquired in the Aviation Leasing segment, (ii) the acquisition of Transtar in July 2021 and (ii) assets placed into service at Jefferson Terminal.

Acquisition and transaction expenses increased $4.4 million primarily due to professional fees related to strategic transactions.

Other income (expense)

Total other income increased $4.6 million during the three months ended September 30, 2021, which primarily reflects (i) an increase of $13.8 million in gain on sale of assets, net in the Aviation Leasing segment, partially offset by (ii) an increase of $8.1 million in other expense primarily due to (a) a write-off of an earn-out receivable at Long Ridge and (b) losses related to crude oil forward transactions at Jefferson Terminal and (iii) an increase of $1.6 million in equity in losses of unconsolidated entities primarily due to an unrealized loss on power swaps at Long Ridge.

Total other expense decreased $9.0 million during the nine months ended September 30, 2021, which primarily reflects (i) an increase of $19.6 million in gain on sale of assets, net in the Aviation Leasing segment, partially offset by (ii) an increase of $8.8 million in other expense primarily due to (a) a write-off of an earn-out receivable at Long Ridge and (b) losses related to crude oil forward transactions at Jefferson Terminal and (iii) an increase of $4.4 million in equity in losses in unconsolidated entities primarily due to an unrealized loss on power swaps at Long Ridge.

Net loss from continuing operations

Net loss from continuing operations increased $14.2 million and $65.6 million during the three and nine months ended September 30, 2021, respectively, primarily due to the changes noted above.

Total other income decreased $10.2 million which primarily reflects (i) an increase of $25.4 million in equity in losses of unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge and (ii) an increase of $15.5 million in gain on sale of assets, net in the Aviation Leasing segment.

Net loss increased $194.8 million primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $37.8 million and $14.4 million during the three and nine months ended September 30, 2021, respectively, primarily due to the changes noted above.

Adjusted EBITDA decreased $4.4 million primarily due to the changes noted above.

Aviation Leasing Segment

As of September 30, 2021, in our Aviation Leasing segment, we own and manage 294 aviation assets, consisting of 90 commercial aircraft and 204 engines.

As of September 30, 2021, 77 of our commercial aircraft and 127 of our engines were leased to operators or other third parties.

As of March 31, 2022, in our Aviation Leasing segment, we own and manage 343 aviation assets, consisting of 117 commercial aircraft and 226 engines, including four aircraft and two engines that were still located in Ukraine and eight aircraft and 18 engines that were still located in Russia.

As of March 31, 2022, 81 of our commercial aircraft and 126 of our engines were leased to operators or other third parties.

Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.

Our aviation equipment was approximately 74% utilized during the three months ended September 30, 2021, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.

Our aviation equipment was approximately 77% utilized during the three months ended March 31, 2022, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.

Our aircraft currently have a weighted average remaining lease term of 45 months, and our engines currently on-lease have an average remaining lease term of 16 months.

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Purchases 1 16 17

Sales (4) — (4)

Transfers (2) (6) (8)

Assets at September 30, 2021 12 78 90

Assets at March 31, 2022 12 105 117

Assets at January 1, 2022 68 139 207

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Transfers 4 10 14

Assets at September 30, 2021 75 129 204

Assets at March 31, 2022 71 155 226

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

11 unchanged sentences

Other income (expense)

Equity in losses of unconsolidated entities (369) (247) (122) (1,050) (1,432) 382

Gain (loss) on sale of assets, net 12,685 (1,114) 13,799 17,467 (2,158) 19,625

Equity in earnings (losses) of unconsolidated entities 198 (340) 538

Gain on sale of assets, net 16,288 811 15,477

Interest income 165 267 (102)

Other expense (1,680) — (1,680) (1,680) — (1,680)

Total other income (expense) 10,975 (1,320) 12,295 15,700 (3,520) 19,220

Income before income taxes 53,497 21,667 31,830 108,855 88,975 19,880

Total other income 16,651 738 15,913

(Loss) income before income taxes (127,675) 16,730 (144,405)

Provision for (benefit from) income taxes 1,057 (42) 1,099

Net income 53,368 23,540 29,828 108,772 94,230 14,542

Net (loss) income (128,732) 16,772 (145,504)

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

Net income attributable to shareholders $ 53,368 $ 23,540 $ 29,828 $ 108,772 $ 94,230 $ 14,542

Net (loss) income attributable to shareholders $ (128,732) $ 16,772 $ (145,504)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

Net income attributable to shareholders $ 53,368 $ 23,540 $ 29,828 $ 108,772 $ 94,230 $ 14,542

Net (loss) income attributable to shareholders $ (128,732) $ 16,772 $ (145,504)

Provision for (benefit from) income taxes 1,057 (42) 1,099

10 unchanged sentences

254 (308) 562

Equity in losses of unconsolidated entities 369 247 122 1,050 1,432 (382)

Equity in (earnings) losses of unconsolidated entities (198) 340 (538)

Non-controlling share of Adjusted EBITDA — — —

1 unchanged sentence

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) depreciation expense of $34,288 and $33,014, (ii) lease intangible amortization of $1,266 and $953 and (iii) amortization for lease incentives of $5,177 and $8,953, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(1) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) depreciation expense of $39,329 and $32,563, (ii) lease intangible amortization of $3,658 and $752 and (iii) amortization for lease incentives of $8,355 and $7,356, respectively.

(2) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) net loss of $(369) and $(247) and (ii) depreciation and amortization of $57 and $0, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(i) net loss of $(1,050) and $(1,432) and (ii) depreciation and amortization of $144 and $0, respectively.

Comparison of the three months ended September 30, 2021 and 2020

Total revenue increased $27.4 million driven by higher maintenance revenue, other revenue and lease income.

• Maintenance revenue increased $14.6 million primarily due to an increase in the number of engines placed on lease and higher aircraft and engine utilization.

• Other revenue increased $11.1 million primarily due to an increase in engine parts sales and higher end-of-lease redelivery compensation.

• Lease income increased $1.9 million primarily due to an increase in the number of aircraft and engines placed on lease, partially offset by an increase in aircraft redelivered.

Comparison of the nine months ended September 30, 2021 and 2020

Total revenue increased $3.7 million driven by higher other revenue and maintenance revenue, partially offset by lower lease income.

• Other revenue increased $8.4 million primarily due to an increase in engine parts sales, partially offset by lower end-of-lease redelivery compensation and the settlement of an engine loss during the nine months ended September 30, 2020.

• Maintenance revenue increased $3.1 million primarily due to an increase in aircraft and engine utilization, partially offset by an increase in aircraft and engines redelivered and a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft.

• Lease income decreased $7.6 million primarily due to an increase in aircraft redelivered and an increase in the number of customers placed on non-accrual status, partially offset by an increase in the number of aircraft and engines placed on lease.

Comparison of the three months ended September 30, 2021 and 2020

Total expenses increased $7.9 million primarily due to an increase in operating expenses and depreciation and amortization expense, partially offset by a decrease in asset impairment and acquisition and transaction expenses.

• Operating expenses increased $10.9 million primarily as a result of an increase in costs associated with the sale of engine parts, shipping and storage fees, bad debt expense and other operating expenses.

• Depreciation and amortization expense increased $1.3 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Asset impairment decreased $3.1 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation.

(2) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) net income (loss) of $198 and $(340) and (ii) depreciation and amortization of $56 and $32, respectively.

Comparison of the three months ended March 31, 2022 and 2021

Total revenue increased $28.9 million driven by higher maintenance revenue and other revenue, partially offset by lower lease income.

• Maintenance revenue increased $21.2 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and the recognition of maintenance deposits due to the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines;

• Other revenue increased $13.9 million primarily due to an increase in engine modules, spare parts and used material inventory sales;

• Lease income decreased $5.9 million primarily due to the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines.

Basic lease revenues from our owned aircraft and engines leased to Russian airlines would have been approximately $10.8 million for the three months ended March 31, 2022.

This decrease is partially offset by an increase in the number of aircraft and engines placed on lease.

Comparison of the three months ended March 31, 2022 and 2021

Total expenses increased $189.2 million primarily due to an increase in asset impairment expense, operating expenses and depreciation and amortization expense.

• Asset impairment increased $120.7 million for the adjustment of the carrying value of leasing equipment to fair value, primarily due to the write down of aircraft and engines located in Ukraine and Russia that may not be recoverable.

See Note 3 to the consolidated financial statements for additional information;

• Acquisition and transaction expense decreased $1.2 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment.

Comparison of the nine months ended September 30, 2021 and 2020

Total expenses increased $3.1 million primarily due to an increase in operating expenses and depreciation and amortization expense, partially offset by a decrease in asset impairment and acquisition and transaction expenses.

• Operating expenses increased $15.6 million primarily as a result of an increase in costs associated with the sale of engine parts, shipping and storage fees and other operating expense.

• Operating expenses increased $62.0 million primarily as a result of an increase in bad debt expense as a result of the sanctions imposed on Russian airlines, an increase in costs associated with the sale of engine modules, spare parts and used material inventory and an increase other operating expenses;

• Depreciation and amortization expense increased $6.8 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Asset impairment decreased $11.3 million for the adjustment of the carrying value of leasing equipment to fair value, net of redelivery compensation.

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

• Acquisition and transaction expense decreased $4.0 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment.

Other income (expense)

Total other income increased $12.3 million during the three months ended September 30, 2021, primarily due to an increase of $13.8 million in gain on the sale of leasing equipment in 2021 and an increase of $0.3 million in interest income, partially offset by an increase of $1.7 million in other expenses and an increase of $0.1 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss.

Total other income increased $19.2 million during the nine months ended September 30, 2021, primarily due to an increase of $19.6 million in gain on the sale of leasing equipment in 2021, an increase of $0.9 million in interest income and a decrease of $0.4 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss, partially offset by an increase of $1.7 million in other expenses.

Total other income increased $15.9 million primarily due to an increase of $15.5 million in gain on the sale of leasing equipment in 2022 and an increase of $0.5 million in Aviation Leasing’s proportionate share of unconsolidated entities’ net income.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $25.4 million and $5.4 million during the three and nine months ended September 30, 2021, respectively, primarily due to the changes noted above.

Adjusted EBITDA decreased $13.2 million primarily due to the changes noted above.

Jefferson Terminal Segment

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

2 unchanged sentences

Terminal services revenues 12,694 10,289 2,405

Crude marketing revenues — — — — 8,210 (8,210)

Total revenues 13,046 10,719 2,327

4 unchanged sentences

Other (expense) income

Loss on sale of assets, net — — — — (7) 7

Loss on extinguishment of debt — — — — (4,724) 4,724

Interest income — — — — 22 (22)

Other (expense) income (99) 181 (280)

Total other expense (2,090) — (2,090) (2,795) (4,677) 1,882

Total other (expense) income (99) 181 (280)

Loss before income taxes (15,986) (9,742) (6,244)

4 unchanged sentences

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

15 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2021 and 2020:

(1) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) equity-based compensation of $121 and $189, (ii) provision for income taxes of $15 and $13, (iii) interest expense of $1,374 and $271 and (iv) depreciation and amortization expense of $2,182 and $1,735, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(i) equity-based compensation of $599 and $180, (ii) provision for income taxes of $36 and $44, (iii) interest expense of $1,911 and $1,517, (iv) changes in fair value of non-hedge derivative instruments of $0 and $38, (v) depreciation and amortization expense of $5,946 and $4,544 and (vi) loss on extinguishment of debt of $0 and $992, respectively.

Total revenues decreased $15.4 million during the nine months ended September 30, 2021, primarily due to decreases in (i) crude marketing revenues of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) terminal services revenue of $7.7 million which primarily reflects lower volumes due to lower global oil demand related to COVID-19.

Total expenses increased $7.5 million during the three months ended September 30, 2021, which reflects:

• an increase in interest expense of $2.6 million due to the issuance of the Series 2021 Bonds in August 2021 and EB-5 Loan Agreement which commenced in January 2021;

• an increase in operating expenses of $2.8 million primarily due to increases in (i) facility operations expense of $1.3 million due to an increase in third-party services, (ii) insurance expense of $0.8 million due to build out of new assets and (iii) compensation and benefits of $0.6 million due to increased headcount;

• an increase in depreciation and amortization of $2.2 million due to additional assets being placed into service.

Total expenses decreased $1.9 million during the nine months ended September 30, 2021, which reflects:

• a decrease in operating expenses of $8.0 million, primarily due to (i) Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019, partially offset by (ii) an increase in facility operations expense;

Comparison of the three months ended March 31, 2022 and 2021

Total revenues increased $2.3 million which reflects an increase in terminal services revenue of $2.4 million primarily due to higher volumes.

Total expenses increased $8.3 million which reflects:

• an increase in interest expense of $4.9 million due to the issuance of the Series 2021 Bonds in August 2021 and additional borrowings related to the EB-5 Loan Agreement;

• an increase in operating expenses of $1.4 million primarily due to increased terminal activity;

• an increase in depreciation and amortization of $2.0 million due to additional assets being placed into service.

• an increase in interest expense of $1.3 million due to (i) the issuance of the Series 2021 Bonds in August 2021 and the EB-5 Loan Agreement which commenced in January 2021, partially offset by (ii) a debt refinancing in the first quarter of 2020 which lowered their average interest rate.

Other expense

Total other expense increased $2.1 million during the three months ended September 30, 2021, primarily due to losses related to crude oil forward transactions.

Total other expense decreased $1.9 million during the nine months ended September 30, 2021, which primarily reflects a loss on extinguishment of debt of $4.7 million in 2020, partially offset by losses related to crude oil forward transactions.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $2.4 million and $3.6 million during the three and nine months ended September 30, 2021, respectively, primarily due to the changes noted above.

Adjusted EBITDA increased $1.0 million primarily due to the changes noted above.

Ports and Terminals

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

Infrastructure revenues

Rail revenues $ 86 $ — $ 86

Terminal services revenues 90 132 (42)

2 unchanged sentences

Operating expenses 3,883 3,102 781

Acquisition and transaction expenses — 20 (20) — 821 (821)

Depreciation and amortization 2,369 2,211 158

2 unchanged sentences

Other (expense) income

Equity in losses of unconsolidated entities (3,789) (2,285) (1,504) (9,262) (3,961) (5,301)

Gain on sale of equipment, net — — — 16 — 16

Interest income 145 — 145 236 — 236

Other expense (4,100) — (4,100) (4,100) — (4,100)

Total other expense (7,744) (2,285) (5,459) (13,110) (3,961) (9,149)

Loss before income taxes (16,056) (4,433) (11,623) (22,913) (11,972) (10,941)

Benefit from income taxes (1,798) (656) (1,142) (3,265) (1,534) (1,731)

Net loss (14,258) (3,777) (10,481) (19,648) (10,438) (9,210)

Net loss attributable to non-controlling interest in consolidated subsidiaries (174) (67) (107) (206) (234) 28

Net loss attributable to shareholders $ (14,084) $ (3,710) $ (10,374) $ (19,442) $ (10,204) $ (9,238)

Equity in (losses) earnings of unconsolidated entities (23,549) 1,542 (25,091)

Total other (expense) income (23,549) 1,542 (25,091)

(Loss) income before income taxes (32,074) 4,046 (36,120)

Provision for income taxes — 154 (154)

Net (loss) income (32,074) 3,892 (35,966)

Net (loss) income attributable to non-controlling interest in consolidated subsidiaries (330) 55 (385)

Net (loss) income attributable to shareholders $ (31,744) $ 3,837 $ (35,581)

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

Net loss attributable to shareholders $ (14,084) $ (3,710) $ (10,374) $ (19,442) $ (10,204) $ (9,238)

Benefit from income taxes (1,798) (656) (1,142) (3,265) (1,534) (1,731)

Net (loss) income attributable to shareholders $ (31,744) $ 3,837 $ (35,581)

Provision for income taxes — 154 (154)

Equity-based compensation expense 171 273 (102)

13 unchanged sentences

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) net loss of $(3,789) and $(2,285), (ii) interest expense of $274 and $337, (iii) depreciation and amortization expense of $2,952 and $1,389, (iv) acquisition and transaction expenses of $0 and $(79) and (v) changes in fair value of non-hedge derivative instruments of $8,324 and $1,033, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(i) net loss of $(9,262) and $(3,961), (ii) interest expense of $748 and $759, (iii) depreciation and amortization expense of $6,677 and $3,797, (iv) acquisition and transaction expenses of $0 and $533, (v) changes in fair value of non-hedge derivative instruments of $12,525 and $248 and (vi) asset impairment of $24 and $0, respectively.

(2) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) equity-based compensation of $6 and $7, (ii) interest expense of $9 and $10, (iii) depreciation and amortization expense of $79 and $13 and (iv) changes in fair value of non-hedge derivative instruments of $159 and $0, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(1) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) net (loss) income of $(21,380) and $1,542, (ii) interest expense of $6,443 and $160, (iii) depreciation and amortization expense of $6,284 and $1,880, (iv) acquisition and transaction expenses of $3 and $0, (v) changes in fair value of non-hedge derivative instruments of $14,615 and $(877), (vi) equity-based compensation of $98 and $0 and (vii) asset impairment of $32 and $0, respectively.

(2) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) equity-based compensation of $6 and $9, (ii) interest expense of $10 and $10, (iii) depreciation and amortization expense of $81 and $76 and (iv) changes in fair value of non-hedge derivative instruments of $27 and $(274), respectively.

Total revenue decreased $1.7 million during the three months ended September 30, 2021, primarily due to a loss on butane forward purchase contracts at Repauno.

Total revenue increased $8.4 million during the nine months ended September 30, 2021, primarily due to (i) a gain on butane forward purchase and sale contracts at Repauno and (ii) operations commencing at the LPG facility at Repauno.

Total expenses increased $4.5 million during the three months ended September 30, 2021 which reflects (i) higher operating expenses of $2.6 million due to increased activit y at Repauno and (ii) higher depreciation and amortization of $1.9 million due to operations commencing at the LPG facility and additional assets placed into service at Repauno.

Total expenses increased $10.2 million during the nine months ended September 30, 2021 which reflects (i) higher operating expenses of $5.6 million due to increased activit y at Repauno and (ii) higher depreciation and amortization of $5.6 million due to operations commencing at the LPG facility and additional assets placed into service at Repauno, partially offset by (iii) lower acquisition and transaction expense of $0.8 million at Long Ridge due to lower professional fees.

Comparison of the three months ended March 31, 2022 and 2021

Total revenue decreased $10.1 million primarily due to a loss on butane forward purchase contracts at Repauno.

Total expenses increased $0.9 million which reflects higher operating expenses of $0.8 million due to increased activit y at Repauno.

Other expense

Total other expense increased $5.5 million and $9.1 million during the three and nine months ended September 30, 2021, respectively, which reflects an increase in other expense and equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

Total other expense increased $25.1 million which reflects an increase in equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $3.6 million and $6.3 million during the three and nine months ended September 30, 2021, respectively, primarily due to the changes noted above.

Adjusted EBITDA increased $1.2 million primarily due to the changes noted above.

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

17 unchanged sentences

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

13 unchanged sentences

Adjusted EBITDA $ 14,647 $ — $ 14,647

All variances during the three and nine months ended September 30, 2021 reflect our acquisition of Transtar in July 2021.

Financial results for the three months ended March 31, 2022

Total revenues were $34.1 million, which primarily consists of switching, interline, and ancillary rail services.

Total expenses were $24.1 million, which primarily consists of (i) operating expenses of $19.1 million which primarily includes compensation and benefits of $11.8 million and facility operating expense of $5.2 million and (ii) depreciation and amortization of $4.8 million.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA was $14.6 million primarily due to the activity noted above.

Corporate and Other

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

15 unchanged sentences

Other (expense) income

Equity in earnings (losses) of unconsolidated entities 76 31 45 452 (52) 504

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

Equity in (losses) earnings of unconsolidated entities (662) 172 (834)

Interest income 491 18 473

Other (expense) income (1) — (1) 1 — 1

Total other income (expense) 74 48 26 (2,778) (23) (2,755)

Total other (expense) income (171) 190 (361)

Loss before income taxes (60,060) (45,741) (14,319)

Provision for (benefit from) income taxes — 40 (40) (74) 243 (317)

Provision for income taxes 281 — 281

Net loss (60,341) (45,741) (14,600)

3 unchanged sentences

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2022 2021

Net loss attributable to shareholders $ (67,132) $ (50,366) $ (16,766)

Provision for (benefit from) income taxes — 40 (40) (74) 243 (317)

Provision for income taxes 281 — 281

Equity-based compensation expense — — —

8 unchanged sentences

(688) 5 (693)

Equity in (earnings) losses of unconsolidated entities (76) (31) (45) (452) 52 (504)

Equity in losses (earnings) of unconsolidated entities 662 (172) 834

Non-controlling share of Adjusted EBITDA — — —

1 unchanged sentence

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2021 and 2020:

(i) net loss of $(5) and $(58) and (ii) interest expense of $26 and $30, respectively.

Includes the following items for the nine months ended September 30, 2021 and 2020:

(1) Includes the following items for the three months ended March 31, 2022 and 2021:

(i) net loss of $(708) and $(22) and (ii) interest expense of $20 and $27, respectively.

Total revenues increased $1.8 million during the three months ended September 30, 2021, primarily due to an increase of $1.9 million in the offshore energy business which reflects higher victualling income on one of our vessels.

Total revenues decreased $2.2 million during the nine months ended September 30, 2021, primarily due to a decrease of $2.5 million in the offshore energy business as one of our vessels was on hire longer in 2020 compared to 2021.

Comparison of the three months ended September 30, 2021 and 2020

Comparison of the three months ended March 31, 2022 and 2021

Total revenues increased $5.5 million primarily due to (i) an increase of $6.2 million in the offshore energy business as one of our vessels was on-hire in 2022 while it was off-hire in 2021 and (ii) a decrease of $0.7 million in our railcar cleaning business due to lower volumes.

Total expenses increased $19.4 million primarily due to higher (i) interest expense and (ii) acquisition and transaction expenses.

Interest expense increased $25.0 million, which reflects an increase in the average outstanding debt of approximately $892.7 million due to increases in (i) the Senior Notes due 2028 of $667.5 million, (ii) the Bridge Loans (as defined in Note 8) of $433.3 million, (iii) the Senior Notes due 2025 of $406.8 million and (iv) the Revolving Credit Facility (as defined below in Liquidity and Capital Resources) of $83.3 million, partially offset by a decrease in (v) the Senior Notes due 2022 of $698.3 million, which was redeemed in full in May 2021.

Acquisition and transaction expense increased $5.1 million, primarily due to professional fees related to the acquisition of Transtar in July 2021.

Comparison of the nine months ended September 30, 2021 and 2020

Total expenses increased $58.9 million primarily due to higher (i) interest expense and (ii) acquisition and transaction expense, partially offset by lower (iii) management fees and incentive allocation to affiliate.

Interest expense increased $52.3 million, which reflects an increase in the average outstanding debt of approximately $688.8 million primarily due to increases in (i) the Senior Notes due 2025 of $407.1 million, (ii) the Senior Notes due 2028 of $389.2 million, (iii) the Senior Notes due 2027 of $266.7 million, (iv) the Bridge Loans of $144.4 million and (v) the Revolving Credit Facility of $10.0 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $520.7 million, which was redeemed in full in May 2021.

Acquisition and transaction expense increased $7.8 million, primarily due to professional fees related to the acquisition of Transtar in July 2021.

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

Interest expense increased $12.6 million, which reflects an increase in the average outstanding debt of approximately $956.1 million due to increases in (i) the Senior Notes due 2028 of $1.0 billion, (ii) the 2021 Bridge Loans of $260.0 million and (iii) the Revolving Credit Facility of $93.5 million, partially offset by a decrease in (iv) the Senior Notes due 2022 of $400.0 million, which was redeemed in full in May 2021.

Acquisition and transaction expense increased $4.3 million primarily due to professional fees related to strategic transactions.

Other expense

Total other expense increased $2.8 million during the nine months ended September 30, 2021, primarily due to (i) a loss on extinguishment of debt of $3.3 million related to the redemption of the Senior Notes due 2022 in May 2021, partially offset by (ii) an increase of $0.5 million in equity in earnings of unconsolidated entities.

Total other expense increased $0.4 million primarily due to (i) an increase of $0.8 million in equity in losses of unconsolidated entities, partially offset by (ii) an increase of $0.5 million in interest income related to certain outstanding notes.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $0.4 million and $5.2 million during the three and nine months ended September 30, 2021, respectively, primarily due to the changes noted above.

Adjusted EBITDA increased $0.7 million primarily due to the changes noted above.

Liquidity and Capital Resources

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

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

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

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

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

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

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

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

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

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

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

On April 28, 2022, the Board of Directors unanimously approved the spin-off of FTAI Infrastructure.

See “Spin-off of FTAI Infrastructure” above for more information related to our liquidity plans.

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

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

• Cash used for the purpose of making investments was $484.7 million and $470.3 million during the nine months ended September 30, 2021 and 2020, respectively.

• Cash used for the acquisition of a business, net of cash acquired was $627.4 million during the nine months ended September 30, 2021.

• Dividends to shareholders and holders of eligible participating securities were $103.2 million and $98.4 million during the nine months ended September 30, 2021 and 2020, respectively.

• Cash used for the purpose of making investments was $284.4 million and $165.0 million during the three months ended March 31, 2022 and 2021, respectively.

• Dividends to shareholders and holders of eligible participating securities were $39.5 million and $33.0 million during the three months ended March 31, 2022 and 2021, respectively.

• Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.

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Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our transportation infrastructure and equipment assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales.

• Cash flows provided from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $4.1 million and $60.5 million during the nine months ended September 30, 2021 and 2020, respectively.

• During the nine months ended September 30, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1,002.5 million, (ii) Bridge Loans of $650.0 million, (iii) Revolving Credit Facility of $450.0 million, (iv) Series 2021 Bonds of $425.0 million and (v) EB-5 Loan Agreement of $26.1 million.

We made total principal repayments of $1,452.7 million relating to the Bridge Loans, Senior Notes due 2022 and Revolving Credit Facility.

During the nine months ended September 30, 2020, additional borrowings were obtained in connection with the (i) 2027 Notes of $400.0 million, (ii) Series 2020 Bonds of $264.0 million and (iii) Revolving Credit Facility of $220.0 million.

made total principal repayments of $496.0 million relating to the Revolving Credit Facility, Series 2016 Bonds, Series 2012 Bonds, Jefferson Revolver and FTAI Pride Credit Agreement.

• Proceeds from the sale of assets were $78.5 million and $53.7 million during the nine months ended September 30, 2021 and 2020, respectively.

• Proceeds from the issuance of common shares, net of underwriter’s discount and issuance costs were $291.8 million during the nine months ended September 30, 2021.

• Proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs were $101.2 million and $20.2 million during the nine months ended September 30, 2021 and 2020, respectively.

• Cash flows provided from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $12.8 million and $(39.8) million during the three months ended March 31, 2022 and 2021, respectively.

• During the three months ended March 31, 2022, additional borrowings were obtained in connection with the (i) 2021 Bridge Loans of $239.5 million, (ii) Revolving Credit Facility of $160.0 million and (iii) EB-5 Loan Agreement of $9.5 million.

We made total principal repayments of $224.5 million relating to the Revolving Credit Facility.

During the three months ended March 31, 2021, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $150.0 million and (ii) EB-5 Loan Agreement of $21.6 million.

• Proceeds from the sale of assets were $54.4 million and $4.6 million during the three months ended March 31, 2022 and 2021, respectively.

• Proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs were $0.0 million and $101.2 million during the three months ended March 31, 2022 and 2021, respectively.

We are currently evaluating several potential Infrastructure and Equipment Leasing transactions, which could occur within the next 12 months.

However, as of the date of this filing, other than the acquisition of Transtar, LLC, none of these transactions or negotiations are definitive or included within our planned liquidity needs.

None of these transactions or negotiations are definitive or included within our planned liquidity needs.

We cannot assure if or when any such transaction will be consummated or the terms of any such transaction.

Historical Cash Flow

Comparison of the nine months ended September 30, 2021 and 2020

The following table compares the historical cash flow for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

Comparison of the three months ended March 31, 2022 and 2021

The following table compares the historical cash flow for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

(in thousands) 2022 2021

Cash Flow Data:

Net cash (used in) provided by operating activities $ (20,708) $ 28,393

Net cash provided by (used in) operating activities $ 1,923 $ (48,932)

Net cash used in investing activities (228,127) (154,418)

Net cash provided by financing activities 145,810 235,408

Net cash used in operating activities increased $49.1 million, which primarily reflects (i) an increase in our net loss of $66.9 million primarily due to higher interest expense and operating expenses and (ii) changes in working capital of $31.5 million.

Net cash used in investing activities increased $623.1 million, primarily due to (i) our acquisition of Transtar, (ii) an increase in investments in unconsolidated entities of $50.1 million, (iii) an increase in acquisitions of leasing equipment of $46.7 million, partially offset by (iv) a decrease in acquisitions of property, plant and equipment of $100.3 million and (v) lower proceeds from the sale of leasing equipment of $24.8 million.

Net cash provided by financing activities increased $1,049.3 million, primarily due to (i) an increase in proceeds from debt of $1,669.6 million, (ii) an increase in proceeds from the issuance of common shares of $291.8 million and (iii) an increase in proceeds from the issuance of preferred shares of $81.0 million, partially offset by (iv) an increase in repayments of debt of $956.7 million.

Net cash provided by operating activities increased $50.9 million, which primarily reflects (i) certain adjustments to reconcile net loss to cash provided by operating activities including, asset impairment of $120.7 million, bad debt expense of $48.5 million and equity in losses of unconsolidated entities of $25.4 million and (ii) changes in working capital of $43.4 million, partially offset by (iii) an increase in our net loss of $194.8 million.

Net cash used in investing activities increased $73.7 million, primarily due to (i) an increase in acquisitions of leasing equipment of $104.7 million and (ii) an increase in acquisitions of property, plant and equipment of $15.4 million, partially offset by (iii) higher proceeds from the sale of leasing equipment of $46.9 million.

Net cash provided by financing activities decreased $89.6 million, primarily due to (i) an increase in repayments of debt of $224.5 million and (ii) an decrease in proceeds from the issuance of preferred shares of $101.2 million, partially offset by (iii) an increase in proceeds from debt of $237.4 million.

We use Funds Available for Distribution (“FAD”) in evaluating our ability to meet our stated dividend policy.

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The following table sets forth a reconciliation of Net Cash (Used in) Provided by Operating Activities to FAD:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2022 2021

Net Cash (Used in) Provided by Operating Activities $ (20,708) $ 28,393

Net Cash Provided by (Used in) Operating Activities $ 1,923 $ (48,932)

Principal Collections on Finance Leases 67 395

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(1) Required payments on debt obligations for the nine months ended September 30, 2021 exclude repayments of $650,000 for the Bridge Loans, $400,000 for the Revolving Credit Facility and $402,704 for the Senior Notes due 2022 and for the nine months ended September 30, 2020 exclude repayments of $220,000 for the Revolving Credit Facility, $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement.

(1) Required payments on debt obligations for the three months ended March 31, 2022 exclude repayments of $224,473 for the Revolving Credit Facility.

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

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Contractual Obligations

The following table summarizes our future obligations, by period due, as of September 30, 2021, under our various contractual obligations and commitments.

We had no off-balance sheet arrangements as of September 30, 2021.

(in thousands) Remainder of 2021 2022 2023 2024 2025 Thereafter Total

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

Series 2021 Bonds — — — — — 425,000 425,000

DRP Revolver 25,000 — — — — — 25,000

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

Revolving Credit Facility — 50,000 — — — — 50,000

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 25,000 50,000 — — 929,060 2,036,020 3,040,080

Total estimated interest payments (1)

37,651 175,427 174,894 177,186 162,275 441,064 1,168,497

Third-party obligations (2)

2,576 10,220 3,220 — — — 16,016

Operating lease obligations 4,224 9,589 7,875 6,901 6,677 148,455 183,721

Capital lease obligations 223 890 763 237 21 — 2,134

44,674 196,126 186,752 184,324 168,973 589,519 1,370,368

Total contractual obligations $ 69,674 $ 246,126 $ 186,752 $ 184,324 $ 1,098,033 $ 2,625,539 $ 4,410,448

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(1) Estimated interest rates as of September 30, 2021.

(2) Relates to a two-year pipeline capacity agreement at Jefferson Terminal.

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

Debt Obligations — As of March 31, 2022, we had outstanding principal and interest payment obligations of $3.5 billion and $1.1 billion, respectively, of which, $340.1 million and $188.5 million, respectively, are due in the next twelve months.

See Note 7 to the consolidated financial statements for additional information about our debt obligations.

Lease Obligations —As of March 31, 2022, we had outstanding operating and finance lease obligations of $180.5 million, of which, $10.1 million is due in the next twelve months.

Other Obligations —As of March 31, 2022, in connection with a pipeline capacity agreement at Jefferson Terminal, we had an obligation to pay a minimum of $10.2 million in marketing fees in the next twelve months.

Other Cash Requirements —In addition to our contractual obligations, we pay quarterly cash dividends on our common shares

and preferred shares, which are subject to change at the discretion of our Board of Directors.

During the last twelve months, we declared cash dividends of $122.4 million and $26.9 million on our common shares and preferred shares, respectively.

We expect to meet our future short-term liquidity requirements through cash on hand, unused borrowing capacity or future financings and net cash provided by our current operations.

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

Application of Critical Accounting Policies

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.

The carrying amount of goodwill was approximately $239.9 million and $122.7 million as of September 30, 2021 and December 31, 2020.

The increase in goodwill was due to our acquisition of Transtar in July 2021.

Critical Accounting Estimates and Policies

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 $258.0 million and $257.1 million as of March 31, 2022 and December 31, 2021, respectively.

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

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

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

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

A qualitative analysis was not elected for the year ended December 31, 2021.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Due to the acquisition of Transtar in 2021, 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 more than 10% but less than 20%.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

There was no impairment of goodwill for the year ended December 31, 2021.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis