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Item 1. Financial Statements

2022-10-31 compared with 2022-07-29 · 460 added, 620 removed, 620 unchanged (64% of the section changed)

1 unchanged sentence

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS ( unaudited)

(Dollars in thousands, except share and per share data)

Notes June 30, 2022 December 31, 2021

Notes September 30, 2022 December 31, 2021

Cash and cash equivalents 2 $ 72,742 $ 138,206

Restricted cash 2 177,951 251,983

Accounts receivable, net 94,867 124,924

Leasing equipment, net 4 1,692,182 1,855,637

Operating lease right-of-use assets, net 73,549 75,344

Property, plant, and equipment, net 5 47,669 38,263

1 unchanged sentence

Intangible assets, net 7 29,416 30,962

Goodwill 262,819 257,137

Inventory, net 2 160,019 100,307

Other assets 2 158,810 110,337

Assets of discontinued operations 3 — 2,442,301

Total assets $ 2,277,985 $ 4,863,854

3 unchanged sentences

Security deposits 27,409 40,149

Operating lease liabilities 72,140 73,594

Other liabilities 46,043 23,892

Liabilities of discontinued operations 3 — 980,255

Total liabilities $ 2,251,937 $ 3,739,754

2 unchanged sentences

2,000,000,000 shares authorized;

99,200,196 and 99,180,385 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively)

99,378,771 and 99,180,385 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)

Preferred shares ($ 0.01 par value per share;

200,000,000 shares authorized;

13,320,000 and 13,320,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively)

13,320,000 and 13,320,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)

Additional paid in capital 376,800 1,411,940

9 unchanged sentences

(Dollars in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Notes 2022 2021 2022 2021

Equipment leasing revenues $ 112,064 $ 81,571 $ 203,755 $ 138,178

Infrastructure revenues 65,868 15,344 112,016 35,886

Total revenues 9 177,932 96,915 315,771 174,064

Revenues 10 $ 230,365 $ 99,174 $ 434,120 $ 237,352

Operating expenses 2 27,393 15,339 108,197 34,191

Cost of sales 2 95,948 5,367 120,139 8,577

General and administrative 3,354 3,679 11,821 9,618

5 unchanged sentences

Total expenses 209,066 118,176 624,330 290,736

Other income (expense)

Other (expense) income

Equity in losses of unconsolidated entities 6 ( 358 ) ( 369 ) ( 125 ) ( 1,050 )

1 unchanged sentence

Loss on extinguishment of debt ( 19,861 ) — ( 19,861 ) ( 3,254 )

Interest income 590 454 1,246 739

Other expense ( 1,596 ) ( 884 ) ( 2,055 ) ( 703 )

Total other income (expense) 48,816 ( 6,849 ) 41,288 ( 4,198 )

Income (loss) before income taxes 13,171 ( 38,248 ) ( 213,002 ) ( 72,955 )

Provision for (benefit from) income taxes 12 3,411 ( 1,640 ) 6,897 ( 1,471 )

Net income (loss) 9,760 ( 36,608 ) ( 219,899 ) ( 71,484 )

Other (expense) income ( 1,038 ) ( 1,341 ) 208 ( 717 )

Total other (expense) income ( 21,257 ) 10,975 60,155 12,446

Income (loss) from continuing operations before income taxes 42 ( 8,027 ) ( 130,055 ) ( 40,938 )

Provision for income taxes 11 4,189 485 7,357 824

Net loss from continuing operations ( 4,147 ) ( 8,512 ) ( 137,412 ) ( 41,762 )

Net loss from discontinued operations, net of income taxes 3 ( 14,782 ) ( 30,931 ) ( 101,416 ) ( 69,165 )

Net loss ( 18,929 ) ( 39,443 ) ( 238,828 ) ( 110,927 )

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

Continuing operations — — — —

Discontinued operations 3 ( 2,871 ) ( 7,363 ) ( 18,817 ) ( 18,949 )

Dividends on preferred shares 6,791 6,791 20,373 17,967

Net income (loss) attributable to shareholders $ 11,449 $ ( 36,534 ) $ ( 217,535 ) $ ( 71,074 )

Income (loss) per share:

Basic $ 0.12 $ ( 0.42 ) $ ( 2.19 ) $ ( 0.83 )

Diluted $ 0.11 $ ( 0.42 ) $ ( 2.19 ) $ ( 0.83 )

Net loss attributable to shareholders $ ( 22,849 ) $ ( 38,871 ) $ ( 240,384 ) $ ( 109,945 )

Loss per share:

Continuing operations $ ( 0.11 ) $ ( 0.17 ) $ ( 1.59 ) $ ( 0.69 )

Discontinued operations $ ( 0.12 ) $ ( 0.27 ) $ ( 0.83 ) $ ( 0.58 )

Continuing operations $ ( 0.11 ) $ ( 0.17 ) $ ( 1.59 ) $ ( 0.69 )

Discontinued operations $ ( 0.12 ) $ ( 0.27 ) $ ( 0.83 ) $ ( 0.58 )

Weighted average shares outstanding:

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(Dollars in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Net income (loss) $ 9,760 $ ( 36,608 ) $ ( 219,899 ) $ ( 71,484 )

Net loss $ ( 18,929 ) $ ( 39,443 ) $ ( 238,828 ) $ ( 110,927 )

Other comprehensive loss:

Other comprehensive loss related to equity method investees, net (1)

Other comprehensive loss related to equity method investees, net (1) in discontinued operations

( 40,470 ) ( 54,640 ) ( 182,963 ) ( 77,518 )

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Comprehensive loss attributable to non-controlling interest:

Continuing operations — — — —

Discontinued operations ( 2,871 ) ( 7,363 ) ( 18,817 ) ( 18,949 )

Comprehensive loss attributable to shareholders $ ( 56,528 ) $ ( 86,720 ) $ ( 402,974 ) $ ( 169,496 )

________________________________________________________

(1) Net of deferred tax benefit of $ — and $( 7,118 ) for the three months ended June 30, 2022 and 2021, respectively, and $ — and $( 4,472 ) for the six months ended June 30, 2022 and 2021, respectively.

(1) Net of deferred tax expense (benefit) of $ — and $ 1,798 for the three months ended September 30, 2022 and 2021, respectively, and $ — and $( 2,674 ) for the nine months ended September 30, 2022 and 2021, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three and Six Months Ended June 30, 2022

Three and Nine Months Ended September 30, 2022

Common Shares Preferred Shares Additional Paid In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

3 unchanged sentences

Total comprehensive loss ( 203,953 ) ( 142,493 ) ( 15,946 ) ( 362,392 )

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 1,187 1,187

Issuance of common shares 399 399

2 unchanged sentences

Equity-based compensation 2,294 2,294

Equity - March 31, 2022 $ 992 $ 133 $ 1,372,564 $ ( 354,585 ) $ ( 251,160 ) $ ( 6,949 ) $ 760,995

Net income (loss) 18,240 ( 8,480 ) 9,760

Equity - June 30, 2022 $ 992 $ 133 $ 1,332,968 $ ( 336,345 ) $ ( 298,874 ) $ ( 9,603 ) $ 689,271

Net loss ( 16,058 ) ( 2,871 ) ( 18,929 )

Other comprehensive loss ( 40,470 ) ( 40,470 )

Total comprehensive income (loss) 18,240 ( 47,714 ) ( 8,480 ) ( 37,954 )

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 1,187 1,187

Total comprehensive loss ( 16,058 ) ( 40,470 ) ( 2,871 ) ( 59,399 )

Spin-off of FTAI Infrastructure, Inc., net of distributions ( 916,582 ) 339,344 12,817 ( 564,421 )

Settlement of equity-based compensation ( 148 ) ( 148 )

Issuance of common shares 2 2

2 unchanged sentences

Equity-based compensation 329 329

Equity - June 30, 2022 $ 992 $ 133 $ 1,332,968 $ ( 336,345 ) $ ( 298,874 ) $ ( 9,603 ) $ 689,271

Equity - September 30, 2022 $ 994 $ 133 $ 376,800 $ ( 352,403 ) $ — $ 524 $ 26,048

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in thousands)

Three and Six Months Ended June 30, 2021

See accompanying notes to consolidated financial statements.

Three and Nine Months Ended September 30, 2021

Common Shares Preferred Shares Additional Paid In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

1 unchanged sentence

Net loss ( 59,898 ) ( 11,586 ) ( 71,484 )

Other comprehensive income 9,954 9,954

Total comprehensive (loss) income ( 29,915 ) 9,954 ( 4,961 ) ( 24,922 )

Other comprehensive loss ( 22,878 ) ( 22,878 )

Total comprehensive loss ( 59,898 ) ( 22,878 ) ( 11,586 ) ( 94,362 )

Settlement of equity-based compensation ( 183 ) ( 183 )

4 unchanged sentences

Equity-based compensation 2,553 2,553

Equity - March 31, 2021 $ 856 $ 133 $ 1,198,386 $ ( 58,073 ) $ ( 16,283 ) $ 18,633 $ 1,143,652

Equity - June 30, 2021 $ 856 $ 133 $ 1,163,748 $ ( 88,056 ) $ ( 49,115 ) $ 13,447 $ 1,041,013

Net loss ( 32,080 ) ( 7,363 ) ( 39,443 )

1 unchanged sentence

Total comprehensive loss ( 32,080 ) ( 54,640 ) ( 7,363 ) ( 94,083 )

Settlement of equity-based compensation ( 238 ) ( 238 )

Issuance of common shares 123 291,701 291,824

Conversion of participating securities ( 2 ) ( 2 )

Dividends declared - common shares ( 28,409 ) ( 28,409 )

Issuance of preferred shares 20 20

Dividends declared - preferred shares ( 6,791 ) ( 6,791 )

Equity-based compensation 728 728

Equity - June 30, 2021 $ 856 $ 133 $ 1,163,748 $ ( 88,056 ) $ ( 49,115 ) $ 13,447 $ 1,041,013

Equity - September 30, 2021 $ 979 $ 133 $ 1,420,247 $ ( 120,136 ) $ ( 103,755 ) $ 6,574 $ 1,204,042

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

12 unchanged sentences

Amortization of deferred financing costs 17,142 18,853

Provision for (benefit from) credit losses 47,218 ( 733 )

Provision for credit losses 47,226 817

Other ( 693 ) ( 240 )

1 unchanged sentence

Other assets ( 23,576 ) ( 34,499 )

Inventory ( 13,370 ) —

Accounts payable and accrued liabilities 4,329 71,285

19 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

5 unchanged sentences

Receipt of maintenance deposits 37,586 23,075

Capital contributions from non-controlling interests 1,187 —

Release of maintenance deposits ( 878 ) ( 19,615 )

Capital contributions from non-controlling interests 1,187 —

Proceeds from issuance of common shares, net of underwriter's discount — 291,822

Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs — 101,201

Dividend from spin-off of FTAI Infrastructure, net of cash transferred 500,562 —

Settlement of equity-based compensation ( 148 ) ( 421 )

1 unchanged sentence

Cash dividends - preferred shares ( 20,373 ) ( 17,967 )

Net cash provided by financing activities 212,097 249,960

Net decrease in cash and cash equivalents and restricted cash ( 143,256 ) ( 18,173 )

Net cash (used in) provided by financing activities ( 77,653 ) 1,349,020

Net (decrease) increase in cash and cash equivalents and restricted cash ( 367,319 ) 298,032

Cash and cash equivalents and restricted cash, beginning of period 440,061 161,418

12 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Fortress Transportation and Infrastructure Investors LLC (“we”, “us”, “our” or the “Company”) is a Delaware limited liability company which, through its subsidiary, Fortress Worldwide Transportation and Infrastructure General Partnership (the “Partnership”), owns and leases aviation equipment and also owns and operates (i) a multi-modal crude oil and refined products terminal in Beaumont, Texas (“Jefferson Terminal”), (ii) a deep-water port located along the Delaware River with an underground storage cavern and multiple industrial development opportunities (“Repauno”), (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 14).

Additionally, we own and lease offshore energy equipment.

We have two reportable segments, (i) Aviation Leasing and (ii) Aerospace Products (see Note 13).

On August 1, 2022, the Company completed the spin-off of its infrastructure business into an independent publicly traded company.

Accordingly, the operating results of, and costs to separate, the infrastructure business are reported in Net loss from discontinued operations, net of income taxes in the Consolidated Statements of Operations for all periods presented.

In addition, the related assets and liabilities held prior to the spin-off are reported as Assets and Liabilities of Discontinued Operations on the Consolidated Balance Sheets.

All amounts and disclosures included in the Notes to Consolidated Financial Statements reflect only the Company's continuing operations unless otherwise noted.

For additional information, see Note 3, "Discontinued Operations."

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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.

We do not have significant exposure to foreign currency risk as all of our leasing arrangements are denominated in U.S.

Variable Interest Entities — The assessment of whether an entity is a VIE and the determination of whether to consolidate a VIE requires judgment.

1 unchanged sentence

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 were the primary beneficiary;

and accordingly, DRP has been presented on a consolidated basis in the accompanying financial statements.

Total VIE assets of DRP were $ 331.2 million and $ 316.5 million, and total VIE liabilities of DRP were $ 48.2 million and $ 32.6 million as of June 30, 2022 and December 31, 2021, respectively.

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.

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

Inventory is carried at the lower of cost or net realizable value on our balance sheet.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(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 7) and other qualifying construction 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 $ 112.7 million and $ 100.3 million as of June 30, 2022 and December 31, 2021, 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 $ 5.9 million and $ 6.8 million as of June 30, 2022 and December 31, 2021, respectively, which is included in Other assets in the Consolidated Balance Sheets.

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 $ 66.0 million and $ 64.5 million as of June 30, 2022 and December 31, 2021, respectively, are recorded as a component of debt in the Consolidated Balance Sheets.

We also have unamortized deferred revolver fees related to our revolving debt of $ 2.5 million and $ 2.9 million as of June 30, 2022 and December 31, 2021, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 7.6 million an d $ 2.2 million for the three months ended June 30, 2022 and 2021, respectively, and $ 13.3 million and $ 4.5 million for the six months ended June 30, 2022 and 2021, respectively, and is included in Interest expense in the Consolidated Statements of Operations.

Revenue Recognition

Equipment Leasing Revenues

Unamortized deferred financing costs of $ 30.9 million and $ 43.0 million as of September 30, 2022 and December 31, 2021, respectively, are recorded as a component of debt in the Consolidated Balance Sheets.

We also have unamortized deferred revolver fees related to our revolving debt of $ 5.6 million and $ 2.4 million as of September 30, 2022 and December 31, 2021, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 3.5 million an d $ 13.7 million for the three months ended September 30, 2022 and 2021, respectively, and $ 15.2 million and $ 17.1 million for the nine months ended September 30, 2022 and 2021, respectively, and is included in Interest expense in the Consolidated Statements of Operations.

Operating Leases —We lease equipment pursuant to operating leases.

20 unchanged sentences

When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received.

Other Revenue —Other revenue primarily consists of revenue related to the sale of engine modules, spare parts and used material inventory and other income.

Revenues for the sale of engine modules, spare parts and used material inventory are recognized when a performance obligation is satisfied by transferring control of inventory to a customer.

Asset sales revenue —Asset sales revenue primarily consists of the transaction price related to the sale of aircraft and aircraft engines from our Aviation Leasing segment.

From time to time, the Company may assign the related lease agreements to the customer as part of the sale of these asset s.

We routinely sell leasing equipment to customers and such transactions are considered recurring and ordinary in nature to our business.

As such, these sales are accounted for within the scope of ASC 606.

Revenue is recognized when a performance obligation is satisfied by transferring control over an asset to a customer.

Revenue is recorded with corresponding costs of sales, presented on a gross basis in the Consolidated Statements of Operations.

See Note 10 for additional information.

Aerospace Products revenue —Aerospace Products revenue primarily consists of the transaction price related to the sale of repaired CFM56-7B and CFM56-5B engines, engine modules, spare parts and used material inventory, and are accounted for within the scope of ASC 606.

Revenue is recognized when a performance obligation is satisfied by transferring control over the related asset to a customer.

Revenue is recorded with corresponding costs of sales, presented on a gross basis in the Consolidated Statements of Operations.

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 included in Other assets and Other liabilities in our Consolidated Balance Sheets, respectively.

Finance lease ROU assets are recognized in Other assets and lease liabilities are recognized in Other liabilities in our Consolidated Balance Sheets.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Infrastructure Revenues

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.

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.

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 .

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 and, when deemed necessary, enter into collateral arrangements.

During the three and nine months ended September 30, 2022, no customer accounted for more than 10% of total revenue.

During the three and nine months ended September 30, 2021, one customer in the Aviation Leasing segment accounted for approximately 14 % and 14 % of total revenue, respectively.

As of September 30, 2022, there were two customers in the Aviation Leasing segment that represented 28 % and 12 % of total Accounts receivable, net.

As of December 31, 2021, Accounts receivable from two customers in the Aviation Leasing segment represented 51 % and 18 % of total Accounts receivable, net.

As of September 30, 2022 and December 31, 2021, no other customers in other segments represented more than 10% of total Accounts receivable, net.

We maintain 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 $ 55.0 million and $ 16.9 million as of September 30, 2022 and December 31, 2021, respectively.

There was no provision for credit losses and $ 1.5 million of provision for credit losses for the three months ended September 30, 2022 and 2021, respectively.

There were provisions for credit losses of $ 47.1 million and $ 0.8 million for the nine months ended September 30, 2022 and 2021, respectively, and is included in Operating expenses in the Consolidated Statements of Operations.

Economic sanctions and export controls against Russia and Russia’s aviation industry were imposed due to its invasion of Ukraine during the first quarter of 2022.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines during the first quarter of 2022 and recognized approximately $ 47.1 million in provision for credit losses during the nine months ended September 30, 2022.

Our allowance for doubtful accounts at September 30, 2022 includes all accounts receivable exposure to Russian and Ukrainian customers.

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 for pensions and other postretirement benefits of discontinued operations, and other comprehensive income related to cash flow hedges of our equity method investees of discontinued operations.

These changes are also recorded in Accumulated other comprehensive loss in our Consolidated Balance Sheets.

The cash flow impact of derivative contracts held by the equity method investees that are not designated as hedging instruments is recognized in Equity in losses (earnings) in unconsolidated entities in our Consolidated Statements of Cash Flows, and the cash flow impact of commodity derivatives held by our consolidated subsidiaries is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows.

Other Assets— Other assets is primarily comprised of lease incentives of $ 35.5 million and $ 46.9 million, purchase deposits of $ 28.6 million and $ 13.7 million, prepaid expenses of $ 3.5 million and $ 4.0 million, notes receivable of $ 56.0 million and $ 22.4 million, maintenance right assets of $ 12.4 million and $ 5.1 million, operating lease right-of-use assets, net of $ 3.2 million and $ 3.8 million, and finance leases, net of $ 7.1 million and $ 7.6 million as of September 30, 2022 and December 31, 2021, respectively.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines and recognized approximately $ 7.5 million in amortization for the remaining lease incentives during the three and nine months ended September 30, 2022.

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

For the three months ended September 30, 2022 and 2021, the Board of Directors declared cash dividends of $ 0.30 and $ 0.33 per common share, respectively.

For the nine months ended September 30, 2022 and 2021, the Board of Directors declared cash dividends of $ 0.96 and $ 0.99 per common share, respectively.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Additionally, in the quarters ended September 30, 2022 and 2021, the 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.

Recent 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 adopted this guidance in the first quarter of 2022, which did not have a material impact on our consolidated financial statements.

DISCONTINUED OPERATIONS

FTAI Infrastructure Inc.

(“FTAI Infrastructure”) Spin-Off

On April 28, 2022, the Board of Directors of the Company unanimously approved the previously announced spin-off of the Company’s infrastructure business held by FTAI Infrastructure (a wholly owned subsidiary of the Company).

The spin-off was effected as a distribution of all of the shares owned by the Company of common stock of FTAI Infrastructure to the holders of the Company’s common shares as of July 21, 2022.

The distribution was completed on August 1, 2022.

Under ASC 205-20, Presentation of Financial Statements – Discontinued Operations , the spin-off met the criteria to be reported as a discontinued operation.

Therefore, FTAI Infrastructure is presented as a discontinued operation within FTAI’s financial statements for all periods prior to August 1, 2022.

FTAI Infrastructure is a corporation for U.S.

federal income tax purposes and holds, among other things, the Company’s previously held interests in the (i) Jefferson Terminal business, (ii) Repauno business, (iii) Long Ridge investment, and (iv) Transtar business.

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

In connection with the spin-off, FTAI Infrastructure paid a dividend of $ 730.3 million to the Company.

The Company used these proceeds to repay all outstanding borrowings under its 2021 bridge loans, $ 200.0 million of its 6.50 % senior unsecured notes due 2025, and approximately $ 175.0 million of the outstanding borrowings under its revolving credit facility.

FTAI retained the aviation business and certain other assets, and FTAI’s remaining outstanding corporate indebtedness.

In connection with the spin-off, the Company and FIG LLC (the “Manager”) assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Manager executed an amended and restated agreement.

The Company and certain of its subsidiaries executed a new management agreement with the Manager.

The new management agreement has an initial term of six years.

The Manager is entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Manager, which were assigned to FTAI Infrastructure.

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, the Company will enter into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company 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 previous arrangements.

The Company is pursuing a merger transaction with a subsidiary of the Company pursuant to which the Company will become a wholly-owned subsidiary of a company organized under the laws of the Cayman Islands and shareholders of the Company would become shareholders of the Cayman Islands entity.

This merger transaction will be subject to approval by holders of the Company’s common shares.

Critical Accounting Policies

Revenue Recognition

Revenues of discontinued operations consist of the following revenue streams:

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

7 unchanged sentences

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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

8 unchanged sentences

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.

Other revenue also includes revenue related to providing roadside assistance services to customers in the intermodal and over-the-road trucking industries.

Additionally, other revenue consists of revenue related to derivative trading activities and also includes revenue related to providing roadside assistance services to customers in the intermodal and over-the-road trucking industries.

Revenue is recognized when a performance obligation is satisfied by completing a repair service at a point in time.

Revenues are typically invoiced for each repair and generally have 30-day payment terms.

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

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.

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

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

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.

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.

Variable Interest Entity

At December 31, 2021, we held an approximately 98 % economic interest, and a 100 % voting interest in Delaware River Partners LLC (“DRP”).

DRP was solely reliant on us to finance its activities and therefore was a VIE.

We concluded that we were the primary beneficiary;

and accordingly, DRP has been presented on a consolidated basis in the tables below.

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

Financial Information of Discontinued Operations

The following table summarizes the significant line items pertaining to discontinued operations included in Net loss attributable to shareholders for the three and nine months ended September 30, 2022 and 2021, respectively, in the Consolidated Statements of Operations:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Total revenues $ 27,993 $ 36,788 $ 140,009 $ 72,674

Operating expenses 12,365 30,865 92,478 64,747

Cost of sales 4,920 1,222 12,732 1,459

General and administrative expenses 466 743 2,694 2,711

Acquisition and transaction expenses 3,813 547 13,971 546

Management fees and incentive allocation to affiliate 908 3,829 8,134 11,244

Depreciation and amortization 6,004 17,131 40,319 38,900

Interest expense 2,160 4,404 15,105 9,396

Other expense 7,641 9,957 47,765 15,625

Losses before income taxes ( 10,284 ) ( 31,910 ) ( 93,189 ) ( 71,954 )

Provision for (benefit from) income taxes 4,498 ( 979 ) 8,227 ( 2,789 )

Net loss from discontinued operations, net of income taxes ( 14,782 ) ( 30,931 ) ( 101,416 ) ( 69,165 )

Net loss attributable to non-controlling interest in consolidated subsidiaries ( 2,871 ) ( 7,363 ) ( 18,817 ) ( 18,949 )

Net loss attributable to shareholders ( 11,911 ) ( 23,568 ) ( 82,599 ) ( 50,216 )

The following table summarizes the carrying value of the major classes of assets and liabilities of discontinued operations as of December 31, 2021:

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(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 on our finance leases and operating leases.

We attempt to limit our credit risk by performing ongoing credit evaluations and, when deemed necessary, enter into collateral arrangements.

During the three and six months ended June 30, 2022, one customer in the Transtar segment accounted for approximately 20 % and 22 % of total revenue, respectively.

During the three and six months ended June 30, 2021, one customer in the Aviation Leasing segment accounted for approximately 10 % and 11 % of total revenue, respectively.

As of June 30, 2022, there was one customer in the Aviation Leasing segment that represented 14 % of total Accounts receivable, net, one customer in the Ports and Terminals segment that represented 12 % of total Accounts receivable, net, and one customer in the Transtar segment that represented 11 % of total Accounts receivable, net.

As of December 31, 2021, Accounts receivable from two customers in the Aviation Leasing segment represented 36 % and 13 % of total Accounts receivable, net, respectively.

As of December 31, 2021, no other customers in other segments represented more than 10% 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 $ 55.6 million and $ 16.9 million as of June 30, 2022 and December 31, 2021, respectively.

There were bad debt reversals of $ 0.7 million and $ 0.2 million for the three months ended June 30, 2022 and 2021, respectively.

There was a provision for credit losses of $ 47.2 million and a bad debt reversal of $ 0.7 million for the six months ended June 30, 2022 and 2021, respectively, and is included in Operating expenses in the Consolidated Statements of Operations.

Economic sanctions and export controls against Russia and Russia’s aviation industry were imposed due to its invasion of Ukraine during the first quarter of 2022.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines during the first quarter of 2022 and recognized approximately $ 47.2 million in bad debt expense during the six months ended June 30, 2022.

Our allowance for doubtful accounts at June 30, 2022 includes all accounts receivable exposure to Russian and Ukrainian customers.

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

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, net in our Consolidated Statements of Comprehensive Loss and recorded in Accumulated other comprehensive income in our Consolidated Balance Sheets.

Derivatives Not Designated As Hedging Instruments

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

Our share of the 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 losses (earnings) in unconsolidated entities in our Consolidated Statements of Cash Flows.

Commodity Derivatives — 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.

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

December 31, 2021

Cash and cash equivalents $ 49,872

Restricted cash 251,983

Accounts receivable, net 50,301

Leasing equipment, net 36,012

Operating lease right-of-use assets, net 71,547

Property, plant and equipment, net 1,517,594

Investments 54,408

Intangible assets, net 67,737

Goodwill 257,137

Other assets 85,710

Total assets of discontinued operations 2,442,301

Accounts payable and accrued liabilities 115,634

Debt, net 718,624

Operating lease liabilities 70,404

Other liabilities 75,593

Total liabilities of discontinued operations 980,255

The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows for all periods presented.

The following table summarizes depreciation and amortization, capital expenditures, and other significant operating and investing noncash items of discontinued operations for each period presented:

Nine Months Ended September 30,

Operating activities:

Equity in losses of unconsolidated entities $ 46,601 $ 8,810

Depreciation and amortization 40,319 38,900

Equity-based compensation 2,623 3,281

Investing activities:

Acquisition of property, plant and equipment $ ( 129,920 ) $ ( 97,506 )

Acquisition of business, net of cash acquired ( 3,819 ) ( 627,399 )

Investment in unconsolidated entities 7,954 ( 54,499 )

Proceeds from sale of property, plant and equipment 5,289 —

Non-cash change in equity method investment ( 182,963 ) ( 77,518 )

Conversion of interests in unconsolidated entities ( 21,302 ) —

The Company accounted for Long Ridge Terminal LLC, included in liabilities of discontinued operations at December 31, 2021 included above, using the equity method of accounting.

Summarized financial data for Long Ridge Terminal LLC are shown in the following tables for the periods in which the Company held the equity investment.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

Other Assets— Other assets is primarily comprised of lease incentives of $ 37.1 million and $ 46.9 million, purchase deposits of $ 7.2 million and $ 13.7 million, prepaid expenses of $ 26.1 million and $ 21.4 million, notes receivable of $ 112.6 million and $ 40.4 million, maintenance right assets of $ 9.1 million and $ 5.1 million, aircraft engine modules, spare parts and used material inventory of $ 112.7 million and $ 100.3 million, commodities inventory of $ 5.9 million and $ 6.8 million, and finance leases, net of $ 6.5 million and $ 7.6 million as of June 30, 2022 and December 31, 2021, respectively.

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

For both the three and six months ended June 30, 2022 and 2021, the Board of Directors declared cash dividends of $ 0.33 per common share.

Additionally, in the quarter ended June 30, 2022, the 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.

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

Lessors—Certain Leases with Variable Lease Payments .

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

We adopted this guidance in the first quarter of 2022, which did not have a material impact on our consolidated financial statements.

December 31, 2021

Balance Sheet

Cash and cash equivalents $ 2,932

Restricted cash 32,469

Accounts receivable, net 17,896

Property, plant, and equipment, net 764,607

Intangible assets, net 4,940

Goodwill 89,390

Inventory, net 1,691

Other assets 12,750

Total assets $ 926,675

Accounts payable and accrued liabilities $ 16,121

Debt, net 604,261

Derivative liabilities 339,033

Other liabilities 2,246

Total liabilities 961,661

Shareholders’ equity ( 1,035 )

Accumulated deficit ( 33,951 )

Total equity ( 34,986 )

Total liabilities and equity $ 926,675

Three Months Ended September 30, Nine Months Ended September 30,

Income Statement 2022 2021 2022 2021

Total revenues $ 156 $ 21,071 $ 15,199 $ 38,341

Operating expenses 4,337 5,581 36,693 16,568

Depreciation and amortization 4,383 5,891 29,381 13,327

Interest expense 4,580 547 30,622 1,493

Total expenses 13,300 12,019 96,696 31,388

Total other expense ( 21 ) ( 16,614 ) ( 234 ) ( 25,440 )

Net loss $ ( 13,165 ) $ ( 7,562 ) $ ( 81,731 ) $ ( 18,487 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Leasing equipment $ 2,179,728 $ 2,312,040

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Leasing equipment, net $ 1,692,182 $ 1,855,637

Economic sanctions and export controls against Russia and Russia’s aviation industry have been imposed due to its invasion of Ukraine during the six months ended June 30, 2022.

Economic sanctions and export controls against Russia and Russia’s aviation industry have been imposed due to its invasion of Ukraine during the nine months ended September 30, 2022.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines.

As of June 30, 2022, four aircraft and two engines were still located in Ukraine and eight aircraft and seventeen engines were still located in Russia.

As of September 30, 2022, four aircraft and two engines were still located in Ukraine and eight aircraft and seventeen 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.

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Additionally, we identified certain assets in our leasing equipment portfolio with indicators of impairment.

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 3.7 million, net of redelivery compensation during the six months ended June 30, 2022.

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the six months ended June 30, 2022:

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 8.2 million, net of redelivery compensation during the nine months ended September 30, 2022.

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the nine months ended September 30, 2022:

Acquisitions:

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Depreciation expense for leasing equipment is summarized as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Depreciation expense for leasing equipment $ 34,704 $ 36,130 $ 115,074 $ 106,172

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net is summarized as follows:

June 30, 2022 December 31, 2021

Land, site improvements and rights $ 168,786 $ 149,914

September 30, 2022 December 31, 2021

Construction in progress 45,621 36,777

Bridges and tunnels 177,337 174,889

Buildings and improvements 16,114 19,164

Terminal machinery and equipment 972,123 962,552

Track and track related assets 100,067 100,014

Railroad equipment 8,364 8,331

Railcars and locomotives 105,614 111,574

Computer hardware and software 10,635 5,335

Furniture and fixtures 1,445 1,374

3 unchanged sentences

Property, plant and equipment, net $ 47,669 $ 38,263

During the six months ended June 30, 2022, we added property, plant and equipment of $ 117.0 million, which primarily consisted of land, terminal machinery and equipment placed in service or under development at Jefferson Terminal.

During the nine months ended September 30, 2022, we added property, plant and equipment of $ 9.8 million, primarily consisting of $ 8.8 million for the build out of the well intervention tower for the Pride vessel and $ 0.9 million for the purchase of additional aviation module containers.

Depreciation expense for property, plant and equipment is summarized as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Depreciation expense $ 149 $ 107 $ 387 $ 202

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents the ownership interests and carrying values of our investments:

Carrying Value

Investment Ownership Percentage June 30, 2022 December 31, 2021

Investment Ownership Percentage September 30, 2022 December 31, 2021

Advanced Engine Repair JV Equity method 25 % $ 20,439 $ 21,317

Falcon MSN 177 LLC Equity method 50 % 1,841 1,600

Intermodal Finance I, Ltd.

Equity method 51 % — —

Long Ridge Terminal LLC (1)

Equity method 50 % — —

FYX Trust Holdco LLC Equity at

December 31, 2021 65 % and 14 % as of June 30, 2022 and December 31, 2021, respectively (2)

GM-FTAI Holdco LLC Equity method See below 72,475 52,295

Clean Planet Energy USA LLC Equity method 50 % 4,430 858

$ 22,280 $ 22,917

________________________________________________________

(1) The carrying value of $ 188.0 million and $ 17.5 million as of June 30, 2022 and December 31, 2021 is included in Other liabilities in the Consolidated Balance Sheets.

(2) See “Equity Investments - FYX Holdco LLC” below for additional information regarding the FYX Trust Holdco LLC acquisition in May 2022.

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2022 and 2021.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents our proportionate share of equity in (losses) income:

Three Months Ended June 30, Six Months Ended June 30,

We did not recognize any other-than-temporary impairments for the three and nine months ended September 30, 2022 and 2021.

The following table presents our proportionate share of equity in income (losses):

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

1 unchanged sentence

Falcon MSN 177 LLC ( 44 ) — 754 —

Intermodal Finance I, Ltd.

45 204 89 376

Long Ridge Terminal LLC ( 12,971 ) ( 7,015 ) ( 36,520 ) ( 5,473 )

GM-FTAI Holdco LLC ( 688 ) — ( 1,121 ) —

Clean Planet Energy USA LLC ( 244 ) — ( 517 ) —

Total $ ( 358 ) $ ( 369 ) $ ( 125 ) $ ( 1,050 )

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 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.

On June 15, 2022, we exchanged our Class B shares which gave us economic interest in Aleon for an additional 20 % interest in Class A shares.

In addition, we also terminated our credit agreements with GMR and Aleon in exchange for an approximate 8.5 % of additional interest in Class A shares.

At June 30, 2022 as a result of these exchange transactions, we own approximately 27 % of GM-FTAI Holdco LLC, which owns 100 % of both GMR and Aleon.

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.

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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

June 30, 2022 December 31, 2021

Balance Sheet

Cash and cash equivalents $ 2,470 $ 2,932

Restricted cash 25,096 32,469

Accounts receivable, net 24,876 17,896

Property, plant, and equipment, net 788,215 764,607

Intangible assets, net 4,750 4,940

Goodwill 89,390 89,390

Other assets 16,975 14,441

Total assets $ 951,772 $ 926,675

Accounts payable and accrued liabilities $ 46,338 $ 16,121

Debt, net 606,174 604,261

Derivative liabilities 671,577 339,033

Other liabilities 2,979 2,246

Total liabilities 1,327,068 961,661

Shareholders’ equity ( 272,779 ) ( 1,035 )

Accumulated deficit ( 102,517 ) ( 33,951 )

Total equity ( 375,296 ) ( 34,986 )

Total liabilities and equity $ 951,772 $ 926,675

Three Months Ended June 30, Six Months Ended June 30,

Income Statement 2022 2021 2022 2021

Total revenues $ 19,801 $ 8,849 $ 15,043 $ 17,270

Operating expenses 19,909 6,715 32,356 10,987

Depreciation and amortization 12,454 3,683 24,998 7,436

Interest expense 13,181 627 26,042 946

Total expenses 45,544 11,025 83,396 19,369

Total other expense ( 149 ) ( 11,825 ) ( 213 ) ( 8,826 )

Net loss $ ( 25,892 ) $ ( 14,001 ) $ ( 68,566 ) $ ( 10,925 )

Advanced Engine Repair JV

3 unchanged sentences

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

In May 2022, we purchased an additional 51 % interest in FYX from an unrelated third party for a purchase price of $ 4.6 million, which resulted in our ownership of a majority stake in the entity.

From the purchase date in May 2022 through and as of June 30, 2022, FYX is presented on a consolidated basis in the Consolidated Statement of Operations and the Consolidated Balance Sheet.

$ 4.2 million is recorded as non-controlling interest for interest held by other parties at June 30, 2022.

At the purchase date, assets of FYX were $ 13.7 million, liabilities were $ 10.1 million, and goodwill of $ 5.4 million was recorded.

Since purchase, we have recorded total revenue from FYX of $ 10.1 million and net loss from FYX of $ 0.4 million .

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 interest.

INTANGIBLE ASSETS AND LIABILITIES, NET

Intangible assets and liabilities, net are summarized as follows:

June 30, 2022

Aviation Leasing Jefferson Terminal Transtar Total

Intangible assets

Acquired favorable lease intangibles $ 75,726 $ — $ — $ 75,726

Accumulated amortization ( 43,858 ) — — ( 43,858 )

Acquired favorable lease intangibles, net 31,868 — — 31,868

Customer relationships — 35,513 60,000 95,513

Accumulated amortization — ( 27,814 ) ( 3,722 ) ( 31,536 )

Acquired customer relationships, net — 7,699 56,278 63,977

Total intangible assets, net $ 31,868 $ 7,699 $ 56,278 $ 95,845

Intangible liabilities

Acquired unfavorable lease intangibles $ 18,227 $ — $ — $ 18,227

Accumulated amortization ( 6,906 ) — — ( 6,906 )

Acquired unfavorable lease intangibles, net $ 11,321 $ — $ — $ 11,321

December 31, 2021

Aviation Leasing Jefferson Terminal Transtar Total

September 30, 2022 December 31, 2021

Intangible assets

1 unchanged sentence

Accumulated amortization ( 30,373 ) ( 36,051 )

Acquired favorable lease intangibles, net 30,962 — — 30,962

Customer relationships — 35,513 60,000 95,513

Accumulated amortization — ( 26,038 ) ( 1,738 ) ( 27,776 )

Acquired customer relationships, net — 9,475 58,262 67,737

Total intangible assets, net $ 29,416 $ 30,962

3 unchanged sentences

Acquired unfavorable lease intangibles, net $ 10,898 $ 8,727

Intangible assets and liabilities are all held within the Aviation Leasing segment.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(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 Consolidated Balance Sheets.

Amortization of intangible assets and liabilities is as follows:

Classification in Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30,

Classification in Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Lease intangibles Equipment leasing revenues $ 3,310 $ 1,198 $ 6,968 $ 1,950

Customer relationships Depreciation and amortization 1,885 889 3,760 1,777

Total $ 5,195 $ 2,087 $ 10,728 $ 3,727

As of June 30, 2022, estimated net annual amortization of intangibles is as follows:

Lease intangibles Revenues $ 3,291 $ 1,266 $ 10,259 $ 3,216

As of September 30, 2022, estimated net annual amortization of intangible assets and liabilities is as follows:

Remainder of 2022 $ 3,323

1 unchanged sentence

Total $ 18,518

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Our debt, net is summarized as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

Loans payable

Revolving Credit

Revolving Credit Facility (1)

$ — (i) Base Rate + 1.75 %;

1 unchanged sentence

9/20/25 $ 189,473

DRP Revolver (2)

25,000 (i) Base Rate + 2.75 %;

(ii) Base Rate + 3.75 % (Eurodollar)

11/5/24 25,000

EB-5 Loan Agreement 35,550 5.75 % 1/25/26 26,100

2021 Bridge Loans — (i) Base Rate + 1.75 %;

3 unchanged sentences

Bonds payable

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

(ii) Tax Exempt Series 2020A Bonds:

(iii) Taxable Series 2020B Bonds:

Series 2021 Bonds 425,000 (i) Series 2021A Bonds:

1.875 % to 3.000 %

(ii) Series 2021B Bonds:

(i) 1/1/26 to 1/1/50

Senior Notes due 2025 (2)

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(1) 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.

(2) Requires a quarterly commitment fee at a rate of 1.00 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(3) Includes an unamortized discount of $ 3,090 and $ 3,509 at June 30, 2022 and December 31, 2021, respectively, and an unamortized premium of $ 5,041 and $ 5,707 at June 30, 2022 and December 31, 2021, respectively.

(4) Includes an unamortized premium of $ 2,255 and $ 2,416 at June 30, 2022 and December 31, 2021, respectively.

We were in compliance with all debt covenants as of June 30, 2022.

(2) Includes an unamortized discount of $ 1,431 and $ 3,509 at September 30, 2022 and December 31, 2021, respectively, and an unamortized premium of $ 4,700 and $ 5,707 at September 30, 2022 and December 31, 2021, respectively.

(3) Includes an unamortized premium of $ 2,174 and $ 2,416 at September 30, 2022 and December 31, 2021, respectively.

On September 20, 2022, the Company amended its Revolving Credit Facility by executing a Second Amended and Restated Credit Agreement (the “Amendment”) to the Amended and Restated Credit Agreement, dated as of December 2, 2021 (as amended by Amendment No.

1, dated as of April 28, 2022).

The Amendment provides for revolving loans to be made available to the Company in an aggregate principal amount of up to $ 225.0 million, of which up to $ 25.0 million may be utilized for the issuance of letters of credit.

In conjunction with the spin-off of FTAI Infrastructure, the Company repaid all outstanding borrowings under its 2021 bridge loans and $ 200.0 million of its 6.50 % senior unsecured notes due 2025, and approximately $ 175.0 million of the outstanding

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

borrowings under its revolving credit facility.

The Company recorded a loss on extinguishment of debt of $ 19.9 million as a result of these paydowns.

We were in compliance with all debt covenants as of September 30, 2022.

FAIR VALUE MEASUREMENTS

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The valuation techniques that may be used to measure fair value are as follows:

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

• Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

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• 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 as of June 30, 2022 and December 31, 2021, 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

June 30, 2022 June 30, 2022

Total Level 1 Level 2 Level 3 Valuation Technique

Cash and cash equivalents $ 118,854 $ 118,854 $ — $ — Market

Restricted cash 177,951 177,951 — — Market

Derivative assets 748 — 748 — Income

Total assets $ 297,553 $ 296,805 $ 748 $ —

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

Cash and cash equivalents $ 188,078 $ 188,078 $ — $ — Market

Restricted cash 251,983 251,983 — — Market

Derivative assets 2,220 — 2,220 — Income

Total $ 442,281 $ 440,061 $ 2,220 $ —

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.

Our cash and cash equivalents 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 of our commodity derivative assets are 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 and cash equivalents and restricted cash consist principally of accounts receivable, notes receivable, accounts payable and accrued liabilities, loans payable, security deposits, maintenance deposits and management fees payable, whose fair values approximate their carrying values based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

June 30, 2022 December 31, 2021

Series 2020 A Bonds (1)

$ 143,857 $ 189,773

Series 2020 B Bonds (1)

80,014 81,637

Series 2021 A Bonds (1)

161,095 222,023

Series 2021 B Bonds (1)

177,616 194,278

Except as discussed below, our financial instruments other than cash and cash equivalents consist principally of accounts receivable, notes receivable, accounts payable and accrued liabilities, loans payable, security deposits, maintenance deposits and management fees payable, whose fair values approximate their carrying values based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles.

The fair values of our notes payable reported as Debt, net in the Consolidated Balance Sheets are presented in the table below and classified as Level 2 within the fair value hierarchy:

September 30, 2022 December 31, 2021

Senior Notes due 2025 611,806 881,408

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Senior Notes due 2028 805,430 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 Sheets approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy.

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

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

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

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

We record such assets at fair value when it is determined the carrying value may not be recoverable.

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

Revenues are within the scope of ASC 842, Leases and ASC 606, Revenue from contracts with customers , unless otherwise noted.

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

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Equipment leasing revenues

Lease income $ 37,196 $ — $ — $ — $ 2,342 $ 39,538

Maintenance revenue 39,932 — — — — 39,932

Finance lease income 102 — — — — 102

Other revenue 31,701 — — — 791 32,492

Total equipment leasing revenues 108,931 — — — 3,133 112,064

Infrastructure revenues

Lease income — 314 — 553 — 867

Rail revenues — — — 37,507 — 37,507

Terminal services revenues — 14,214 13 — — 14,227

Other revenue — — 1,627 — 11,640 13,267

Total infrastructure revenues — 14,528 1,640 38,060 11,640 65,868

Total revenues $ 108,931 $ 14,528 $ 1,640 $ 38,060 $ 14,773 $ 177,932

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Equipment leasing revenues

During the three months ended September 30, 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities.

As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statement of Operations for the three months ended September 30, 2022 and are accounted for in accordance with ASC 606.

The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statement of Operations for the three months ended September 30, 2022.

Sales transactions of aircraft and engines prior to the three months ended September 30, 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain on sale of assets, net on the Consolidated Statement of Operations, as we were previously only occasionally selling these assets.

Generally, assets sold were under leasing arrangements with customers prior to sales and are included in Leasing equipment, net, on the Consolidated Balance Sheets.

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Lease income $ 40,273 $ — $ 9,806 $ 50,079

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Finance lease income 119 — — 119

Other revenue 5,789 — — — 434 6,223

Total equipment leasing revenues 78,443 — — — 3,128 81,571

Infrastructure revenues

Lease income — 432 — — — 432

Terminal services revenues — 11,095 25 — — 11,120

Asset sales revenue 85,488 — — 85,488

Aerospace products revenue — 53,401 — 53,401

Other revenue 3,461 — 2,310 5,771

Total infrastructure revenues — 11,527 2,344 — 1,473 15,344

Total revenues $ 164,848 $ 53,401 $ 12,116 $ 230,365

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Equipment leasing revenues

Three Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Lease income $ 40,392 $ — $ 2,386 $ 42,778

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Finance lease income 439 — — 439

Aerospace products revenue — 7,730 — 7,730

Other revenue 5,125 — 2,850 7,975

Total equipment leasing revenues 193,956 — — — 9,799 203,755

Infrastructure revenues

Total revenues $ 86,208 $ 7,730 $ 5,236 $ 99,174

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Lease income $ 111,316 $ — $ 17,515 $ 128,831

Rail revenues — — 86 71,089 — 71,175

Terminal services revenues — 26,908 103 — — 27,011

Maintenance revenue 112,171 — — 112,171

Finance lease income 332 — — 332

Asset sales revenue 85,488 — — 85,488

Aerospace products revenue — 94,211 — 94,211

Other revenue 8,687 — 4,400 13,087

Total infrastructure revenues — 27,574 ( 346 ) 72,130 12,658 112,016

Total revenues $ 317,994 $ 94,211 $ 21,915 $ 434,120

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(Dollars in tables in thousands, unless otherwise noted)

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Equipment leasing revenues

Nine Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Lease income $ 120,389 $ — $ 5,518 $ 125,907

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Finance lease income 1,285 — — 1,285

Other revenue 6,190 — — — 502 6,692

Total equipment leasing revenues 134,544 — — — 3,634 138,178

Infrastructure revenues

Lease income — 862 — — — 862

Terminal services revenues — 21,384 157 — — 21,541

Crude marketing revenues — — — — — —

Aerospace products revenue — 13,284 — 13,284

Other revenue 5,761 — 3,352 9,113

Total infrastructure revenues — 22,246 10,440 — 3,200 35,886

Total revenues $ 215,198 $ 13,284 $ 8,870 $ 237,352

Presented below are the contracted minimum future annual revenues to be received under existing operating leases across several market sectors as of June 30, 2022:

Operating Leases

Presented below are the contracted minimum future annual revenues to be received under existing operating and finance leases:

September 30, 2022

Remainder of 2022 $ 37,708

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Total $ 354,531

EQUITY-BASED COMPENSATION

In 2015, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to grant 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 June 30, 2022, 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 Consolidated Statements of Operations includes the following expense related to our stock-based compensation arrangements:

Three Months Ended June 30, Six Months Ended June 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

2022 2021 2022 2021

Restricted Shares $ 538 $ 1,270 $ 1,076 $ 2,111 $ 2,655 0.8 years

Common Units 1,047 169 1,218 442 3,599 1.2 years

Total $ 1,585 $ 1,439 $ 2,294 $ 2,553 $ 6,254

During the six months ended June 30, 2022, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 336,862 of its options to certain of the Manager’s employees.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

During the six months ended June 30, 2022, we issued common units of our subsidiary that had a grant date fair value of $ 1.9 million and 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 the 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.

Additionally, during the six months ended June 30, 2022, we issued separate common units of our subsidiary that had a grant date fair value of $ 1.9 million and vest over three years .

These awards are subject to performance targets based on EBITDA as defined in the agreements, and the total expected compensation expense is recognized ratably over the vesting periods if it is probable that the performance conditions will be met.

Discount factors and terminal multiples were based on market-based inputs and transactions, as available at the measurement date.

RETIREMENT BENEFIT PLANS

In connection with the acquisition of Transtar, 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 partially funded pension plan is a tax qualified plan.

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 benefit plan costs for the three and six months ended June 30, 2022.

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

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

Service costs $ 438 $ 538 $ 876 $ 1,075

Interest costs 74 225 148 450

Total $ 512 $ 763 $ 1,024 $ 1,525

The total amount of employer contributions paid for the six months ended June 30, 2022 was $ 0.3 million, and the expected remaining scheduled employer contributions for the fiscal year ending December 31, 2022 is $ 1.2 million.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

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Foreign 106 31 174 ( 25 )

Total current (benefit) provision ( 401 ) 63 697 161

Total current provision ( 89 ) 494 825 996

Federal 2,915 — 4,517 —

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Total deferred provision (benefit) 4,278 ( 9 ) 6,532 ( 172 )

Provision for (benefit from) income taxes $ 3,411 $ ( 1,640 ) $ 6,897 $ ( 1,471 )

Provision for income taxes $ 4,189 $ 485 $ 7,357 $ 824

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

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corporate tax rates, or being deemed to be foreign sourced and thus either not taxable or taxable at effectively lower tax rates.

As of and for the six months ended June 30, 2022, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the nine months ended September 30, 2022, 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.

1 unchanged sentence

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 of June 30, 2022.

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 of September 30, 2022.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

In connection with the spin-off of FTAI Infrastructure on August 1, 2022, we assigned our then-existing management and advisory agreement, dated as of May 20, 2015, with our Manager to FTAI Infrastructure.

On July 31, 2022, we entered into a new management and advisory agreement (the “Management Agreement”), by and among FTAI, FTAI Finance Holdco Ltd.

(a wholly owned subsidiary of the Company), and each of the subsidiaries that are party thereto and the Manager, with substantially similar terms and conditions as the existing management and advisory agreement.

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.

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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.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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:

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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:

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation from continuing operations:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

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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 for us, costs to obtain liability insurance to indemnify our directors and officers and the compensation and expenses of our transfer agent.

We 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 do not reimburse the Manager for these expenses.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes our reimbursements to the Manager:

Three Months Ended June 30, Six Months Ended June 30,

we do not reimburse the Manager for these expenses.

The following table summarizes our reimbursements to the Manager from continuing operations:

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

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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 of Fortress.

Any ultimate purchaser of common shares for which such options are granted may be an affiliate of Fortress Investment Group LLC (“Fortress”).

The following table summarizes amounts due to the Manager, which are included within Accounts payable and accrued liabilities in the Consolidated Balance Sheets:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Accrued management fees $ 386 $ 1,495

Other payables 1,020 2,283

As of June 30, 2022 and December 31, 2021, there were no receivables from the Manager.

Other Affiliate Transactions

As of June 30, 2022 and December 31, 2021, affiliates of our Manager own an approximately 20 % interest in Jefferson Terminal which has been accounted for as a component of non-controlling interest in consolidated subsidiaries in the consolidated financial statements.

The carrying amount of this non-controlling interest at June 30, 2022 and December 31, 2021 was $( 24.3 ) million and $( 9.1 ) million, respectively.

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

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Non-controlling interest share of net loss $ ( 8,135 ) $ ( 6,538 ) $ ( 15,271 ) $ ( 11,554 )

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.

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.

In May 2022, we purchased an additional 51 % interest in FYX from an unrelated third party for a purchase price of $ 4.6 million, which resulted in our ownership of a majority stake in the entity.

From the purchase date in May 2022 through and as of June 30, 2022, FYX is presented on a consolidated basis in the Consolidated Statement of Operations and the Consolidated Balance Sheet.

Additionally, other investors in FYX are also affiliates of our Manager.

SEGMENT INFORMATION

During the third quarter of 2022, as a result of the spin-off of FTAI Infrastructure effective on August 1, 2022, the Company reevaluated its operating segments.

The key factors used to identify the reportable segments are the organization and alignment of our internal operations and the nature of our products and services.

Our two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products.

The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers.

The Aerospace Products segment develops, manufactures, repairs, and sells aircraft engines and aftermarket components for aircraft engines.

The interim periods will disclose the reportable segments under this basis with prior periods restated to reflect the change in accordance with the requirements of ASC 280.

Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, shared services costs, and management fees.

Additionally, Corporate and Other also includes offshore energy related assets, which consist of vessels and equipment that support offshore oil and gas activities and production which are typically subject to operating leases.

Additionally, during the third quarter of 2022, the Company changed its measure of segment profit to include the add back of dividends on preferred shares in Adjusted EBITDA.

Prior period Adjusted EBITDA amounts and the reconciliation to net income (loss) attributable to shareholders from continuing operations have been recast to reflect this change in the measure of segment profit.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

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.

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 production which are typically subject to operating leases, (ii) an investment in an unconsolidated entity engaged in the acquisition and leasing of shipping containers and (iii) railroad assets which consist of equipment that support a railcar cleaning business and (iv) various clean technology and sustainability investments (see Note 5 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.

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.

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

Our Chief Executive Officer is our CODM.

Segment information is presented in the same manner that our CODM reviews the operating results in assessing performance and allocating resources.

The CODM evaluates performance for each reportable segment primarily based on Adjusted EBITDA.

Historically, the CODM’s assessment of segment performance included asset information.

During the third quarter of 2022, the CODM determined that segment asset information is not a key factor in measuring performance or allocating resources.

Therefore, segment asset information is not included in the tables below as it is not provided to or reviewed by our CODM.

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, dividends on preferred shares 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 from continuing operations, as defined by GAAP, is the most appropriate earnings measurement with which to reconcile Adjusted EBITDA.

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

3 unchanged sentences

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

For the Three Months Ended June 30, 2022

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Equipment leasing revenues $ 108,931 $ — $ — $ — $ 3,133 $ 112,064

Infrastructure revenues — 14,528 1,640 38,060 11,640 65,868

Total revenues 108,931 14,528 1,640 38,060 14,773 177,932

For the Three Months Ended September 30, 2022

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Revenues $ 164,848 $ 53,401 $ 12,116 $ 230,365

Operating expenses 10,533 3,491 13,369 27,393

Cost of sales 64,855 31,093 — 95,948

General and administrative — — 3,354 3,354

6 unchanged sentences

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 35 — ( 12,971 ) — ( 887 ) ( 13,823 )

Equity in losses of unconsolidated entities ( 45 ) ( 313 ) — ( 358 )

Gain on sale of assets, net — — — —

Interest income 38 — — — 552 590

Other expense — ( 1,291 ) — ( 305 ) — ( 1,596 )

Total other income (expense) 63,718 ( 1,291 ) ( 12,971 ) ( 305 ) ( 335 ) 48,816

Income (Loss) before income taxes 107,290 ( 16,890 ) ( 18,332 ) 13,069 ( 71,966 ) 13,171

Provision for (benefit from) income taxes 1,963 68 — 2,217 ( 837 ) 3,411

Net income (loss) 105,327 ( 16,958 ) ( 18,332 ) 10,852 ( 71,129 ) 9,760

Loss on extinguishment of debt — — ( 19,861 ) ( 19,861 )

Other income (expense) 42 — ( 1,080 ) ( 1,038 )

Total other expense ( 3 ) ( 313 ) ( 20,941 ) ( 21,257 )

Income (loss) from continuing operations before income taxes 51,987 18,412 ( 70,357 ) 42

Provision for income taxes 926 2,586 677 4,189

Net income (loss) from continuing operations 51,061 15,826 ( 71,034 ) ( 4,147 )

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

Dividends on preferred shares — — 6,791 6,791

Net income (loss) attributable to shareholders $ 105,327 $ ( 8,823 ) $ ( 18,012 ) $ 10,852 $ ( 77,895 ) $ 11,449

Net income (loss) attributable to shareholders from continuing operations $ 51,061 $ 15,826 $ ( 77,825 ) $ ( 10,938 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

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

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Adjusted EBITDA $ 95,994 $ 18,560 $ ( 5,691 ) $ 108,863

2 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities 241

Interest expense ( 54,373 )

Interest expense and dividends on preferred shares ( 46,962 )

Depreciation and amortization expense ( 41,329 )

6 unchanged sentences

Provision for income taxes ( 4,189 )

Net income attributable to shareholders $ 11,449

Net loss attributable to shareholders from continuing operations $ ( 10,938 )

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

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 250 $ — $ — $ 250

Asia 23,496 1,200 12,116 36,812

6 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2022

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Equipment leasing revenues $ 193,956 $ — $ — $ — $ 9,799 $ 203,755

Infrastructure revenues — 27,574 ( 346 ) 72,130 12,658 112,016

Total revenues 193,956 27,574 ( 346 ) 72,130 22,457 315,771

For the Nine Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Revenues $ 317,994 $ 94,211 $ 21,915 $ 434,120

Operating expenses 72,135 8,094 27,968 108,197

Cost of sales 64,855 55,284 — 120,139

General and administrative — — 11,821 11,821

8 unchanged sentences

Gain on sale of assets, net 61,371 18,562 — 79,933

Interest income 203 — — — 1,043 1,246

Other expense — ( 1,390 ) — ( 665 ) — ( 2,055 )

Loss on extinguishment of debt — — ( 19,861 ) ( 19,861 )

Other income (expense) 245 — ( 37 ) 208

Total other income (expense) 62,369 17,684 ( 19,898 ) 60,155

(Loss) income before income taxes ( 20,385 ) ( 32,876 ) ( 50,406 ) 22,691 ( 132,026 ) ( 213,002 )

Provision for (benefit from) income taxes 3,020 137 — 4,296 ( 556 ) 6,897

Net (loss) income ( 23,405 ) ( 33,013 ) ( 50,406 ) 18,395 ( 131,470 ) ( 219,899 )

Income (loss) before income taxes 5,431 48,324 ( 183,810 ) ( 130,055 )

Provision for income taxes 2,116 5,055 186 7,357

Net income (loss) 3,315 43,269 ( 183,996 ) ( 137,412 )

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

Dividends on preferred shares — — 20,373 20,373

Net (loss) income attributable to shareholders $ ( 23,405 ) $ ( 17,742 ) $ ( 49,756 ) $ 18,395 $ ( 145,027 ) $ ( 217,535 )

Net income (loss) attributable to shareholders from continuing operations $ 3,315 $ 43,269 $ ( 204,369 ) $ ( 157,785 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

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

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Adjusted EBITDA $ 273,788 $ 48,685 $ ( 17,915 ) $ 304,558

2 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 165 )

Interest expense ( 104,971 )

Interest expense and dividends on preferred shares ( 152,570 )

Depreciation and amortization expense ( 145,754 )

6 unchanged sentences

Provision for income taxes ( 7,357 )

Net loss attributable to shareholders $ ( 217,535 )

Net loss attributable to shareholders from continuing operations $ ( 157,785 )

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

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 250 $ 850 $ — $ 1,100

7 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Equipment leasing revenues $ 78,443 $ — $ — $ — $ 3,128 $ 81,571

Infrastructure revenues — 11,527 2,344 — 1,473 15,344

Total revenues 78,443 11,527 2,344 — 4,601 96,915

For the Three Months Ended September 30, 2021

Three Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Revenues $ 86,208 $ 7,730 $ 5,236 $ 99,174

Operating expenses 7,282 1,774 6,283 15,339

Cost of sales — 5,367 — 5,367

General and administrative — — 3,679 3,679

5 unchanged sentences

Total expenses 42,556 7,181 68,439 118,176

Equity in (losses) earnings of unconsolidated entities ( 341 ) — ( 7,015 ) — 204 ( 7,152 )

Other income (expense)

Equity in losses of unconsolidated entities — ( 369 ) — ( 369 )

Gain on sale of assets, net 10,961 1,724 — 12,685

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

Interest income 357 — 91 — 6 454

Other (expense) income — ( 886 ) — — 2 ( 884 )

Total other income (expense) 3,987 ( 886 ) ( 6,908 ) — ( 3,042 ) ( 6,849 )

Other expense ( 1,341 ) — — ( 1,341 )

Total other income 9,620 1,355 — 10,975

Income (loss) before income taxes 53,272 1,904 ( 63,203 ) ( 8,027 )

(Benefit from) provision for income taxes ( 4 ) 59 ( 1,621 ) — ( 74 ) ( 1,640 )

Provision for (benefit from) income taxes 595 ( 110 ) — 485

Net income (loss) 52,677 2,014 ( 63,203 ) ( 8,512 )

1 unchanged sentence

Dividends on preferred shares — — 6,791 6,791

Net income (loss) attributable to shareholders $ 38,632 $ ( 7,185 ) $ ( 9,195 ) $ — $ ( 58,786 ) $ ( 36,534 )

Net income (loss) attributable to shareholders from continuing operations $ 52,677 $ 2,014 $ ( 69,994 ) $ ( 15,303 )

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Three Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Adjusted EBITDA $ 94,990 $ 2,001 $ ( 4,742 ) $ 92,249

2 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities 312

Interest expense ( 37,504 )

Interest expense and dividends on preferred shares ( 56,887 )

Depreciation and amortization expense ( 42,681 )

5 unchanged sentences

Equity-based compensation expense —

Benefit from income taxes 1,640

Net loss attributable to shareholders $ ( 36,534 )

Provision for income taxes ( 485 )

Net loss attributable to shareholders from continuing operations $ ( 15,303 )

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

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Africa $ 235 $ — $ — $ — $ — $ 235

Three Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Asia $ 36,420 $ — $ 5,236 $ 41,656

6 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2021

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Equipment leasing revenues $ 134,544 $ — $ — $ — $ 3,634 $ 138,178

Infrastructure revenues — 22,246 10,440 — 3,200 35,886

Total revenues 134,544 22,246 10,440 — 6,834 174,064

For the Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Revenues $ 215,198 $ 13,284 $ 8,870 $ 237,352

Operating expenses 14,177 3,519 16,495 34,191

Cost of sales — 8,577 — 8,577

General and administrative — — 9,618 9,618

6 unchanged sentences

Other income (expense)

Equity in (losses) income of unconsolidated entities ( 681 ) — ( 5,473 ) — 376 ( 5,778 )

Equity in losses of unconsolidated entities — ( 1,050 ) — ( 1,050 )

Gain on sale of assets, net 15,751 1,716 — 17,467

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

Interest income 624 — 91 — 24 739

Other (expense) income — ( 705 ) — — 2 ( 703 )

Other expense ( 717 ) — — ( 717 )

Total other income (expense) 15,034 666 ( 3,254 ) 12,446

Income (loss) before income taxes 111,822 1,814 ( 154,574 ) ( 40,938 )

(Benefit from) provision for income taxes ( 46 ) 116 ( 1,467 ) — ( 74 ) ( 1,471 )

Provision for (benefit from) income taxes 909 ( 11 ) ( 74 ) 824

Net income (loss) 110,913 1,825 ( 154,500 ) ( 41,762 )

1 unchanged sentence

Dividends on preferred shares — — 17,967 17,967

Net income (loss) attributable to shareholders $ 55,404 $ ( 11,968 ) $ ( 5,358 ) $ — $ ( 109,152 ) $ ( 71,074 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Net income (loss) attributable to shareholders from continuing operations $ 110,913 $ 1,825 $ ( 172,467 ) $ ( 59,729 )

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

Nine Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Adjusted EBITDA $ 237,404 $ 1,998 $ ( 17,947 ) $ 221,455

2 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities 906

Interest expense ( 70,494 )

Interest expense and dividends on preferred shares ( 133,565 )

Depreciation and amortization expense ( 127,723 )

5 unchanged sentences

Equity-based compensation expense —

Benefit from income taxes 1,471

Net loss attributable to shareholders $ ( 71,074 )

Provision for income taxes ( 824 )

Net loss attributable to shareholders from continuing operations $ ( 59,729 )

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Nine Months Ended September 30, 2021

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 235 $ — $ — $ 235

4 unchanged sentences

Total $ 215,198 $ 13,284 $ 8,870 $ 237,352

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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:

June 30, 2022

Equipment Leasing Infrastructure

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

Total assets $ 2,124,335 $ 1,304,515 $ 331,843 $ 748,210 $ 373,245 $ 4,882,148

Debt, net — 704,410 25,000 — 2,768,156 3,497,566

Total liabilities 150,085 835,714 236,890 110,761 2,859,427 4,192,877

Non-controlling interests in equity of consolidated subsidiaries — ( 16,799 ) 1,559 897 4,740 ( 9,603 )

Total equity 1,974,250 468,801 94,953 637,449 ( 2,486,182 ) 689,271

Total liabilities and equity $ 2,124,335 $ 1,304,515 $ 331,843 $ 748,210 $ 373,245 $ 4,882,148

June 30, 2022

Equipment Leasing Infrastructure

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

Location of Long-Lived Assets

The following tables sets forth summarized geographic location of property, plant and equipment and leasing equipment, net:

September 30, 2022

Property, plant and equipment and leasing equipment, net

Africa $ 17,776

Asia 275,387 — — — 176,114 451,501

Europe 602,833

3 unchanged sentences

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

12 unchanged sentences

The calculation of basic and diluted EPS is presented below:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except share and per share data) 2022 2021 2022 2021

Net income (loss) $ 9,760 $ ( 36,608 ) ( 219,899 ) ( 71,484 )

Net loss from continuing operations $ ( 4,147 ) $ ( 8,512 ) $ ( 137,412 ) $ ( 41,762 )

Net loss from discontinued operations, net of income taxes ( 14,782 ) ( 30,931 ) ( 101,416 ) ( 69,165 )

Net loss $ ( 18,929 ) $ ( 39,443 ) $ ( 238,828 ) ( 110,927 )

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

Continuing operations — — — —

Discontinued operations ( 2,871 ) ( 7,363 ) ( 18,817 ) ( 18,949 )

Dividends on preferred shares 6,791 6,791 20,373 17,967

Net income (loss) attributable to shareholders $ 11,449 $ ( 36,534 ) $ ( 217,535 ) $ ( 71,074 )

Net loss attributable to shareholders $ ( 22,849 ) $ ( 38,871 ) $ ( 240,384 ) $ ( 109,945 )

Weighted Average Common Shares Outstanding - Basic (1)

2 unchanged sentences

99,378,771 88,277,897 99,372,016 86,787,072

Income (loss) per share:

Basic $ 0.12 $ ( 0.42 ) $ ( 2.19 ) $ ( 0.83 )

Diluted $ 0.11 $ ( 0.42 ) $ ( 2.19 ) $ ( 0.83 )

Loss per share:

Continuing operations $ ( 0.11 ) $ ( 0.17 ) $ ( 1.59 ) $ ( 0.69 )

Discontinued operations $ ( 0.12 ) $ ( 0.27 ) $ ( 0.83 ) $ ( 0.58 )

Continuing operations $ ( 0.11 ) $ ( 0.17 ) $ ( 1.59 ) $ ( 0.69 )

Discontinued operations $ ( 0.12 ) $ ( 0.27 ) $ ( 0.83 ) $ ( 0.58 )

________________________________________________________

(1) Three and six months ended June 30, 2022 and 2021 include participating securities which can be converted into a fixed amount of our shares.

For the three months ended June 30, 2022 and 2021, 407,124 and 964,696 shares, respectively, and for the six months ended June 30, 2022 and 2021, 595,047 and 890,300 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the six months ended June 30, 2022, we issued 19,811 common shares to certain directors as compensation.

(1) Three and nine months ended September 30, 2022 and 2021 include participating securities which can be converted into a fixed amount of our shares.

For the three months ended September 30, 2022 and 2021, 326,747 and 950,524 shares, respectively, and for the nine months ended September 30, 2022 and 2021, 654,693 and 940,254 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the nine months ended September 30, 2022, we issue d 19,811 common shares to certain directors as compensation.

COMMITMENTS AND CONTINGENCIES

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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, as part of the initial acquisition, whereby the non-controlling interest holder may receive additional payments contingent upon the achievement of c ertain 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 $ 9.2 million for the next twelve months.

SUBSEQUENT EVENTS

On July 26, 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 June 30, 2022, payable on August 29, 2022 to the holders of record on August 15, 2022.

Additionally, on July 26, 2022, our Board of Directors also 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, payable on September 15, 2022 to the holders of record on September 1, 2022.

On October 27, 2022, our Board of Directors declared a cash dividend on our common shares and eligible participating securities of $ 0.30 per share for the quarter ended September 30, 2022, payable on November 28, 2022 to the holders of record on November 14, 2022.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Spin-off of Infrastructure Business

On July 11, 2022, the Board of Directors unanimously approved the details and timing of the previously announced and approved spin-off.

The spin-off will be effected as a distribution of all of the shares owned by the Company of common stock of FTAI Infrastructure, a majority-owned subsidiary of the Company, to the holders of the Company’s common shares as of July 21, 2022.

The distribution is expected to occur on or about August 1, 2022, subject to certain conditions.

Additionally, on October 27, 2022, our Board of Directors also 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, payable on December 15, 2022 to the holders of record on December 1, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements