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Item 7. Management’s Discussion and Analysis

2023-02-27 compared with 2022-02-28 · 292 added, 458 removed, 261 unchanged (74% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand Fortress Transportation and Infrastructure Investors LLC.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand FTAI Aviation Ltd.

Our MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes, and with Part I, Item 1A, “Risk Factors” and “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.

A discussion of our results of operations and cash flows for 2020 compared to 2019 is included in our Annual Report on Form 10-K for the year ended December 31, 2020, under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

We own and acquire high quality infrastructure and related equipment that is essential for the transportation of goods and people globally.

A discussion of our cash flows for 2021 compared to 2020 is included in our Annual Report on Form 10-K for the year ended December 31, 2021, under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.

We own, lease and sell aviation equipment.

We also develop and manufacture through a joint venture, and repair and sell, through exclusivity arrangements, aftermarket components for aircraft engines.

Additionally, we own and lease offshore energy equipment.

We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation.

We believe that there is a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities.

We are externally managed by the Manager, an affiliate of Fortress, which has a dedicated team of experienced professionals focused on the acquisition of transportation and infrastructure assets since 2002.

As of December 31, 2021, we had total consolidated assets of $4.9 billion and total equity of $1.1 billion.

While our strategy permits us to acquire a broad array of transportation-related assets, we are currently active in four sectors where we believe there are meaningful opportunities to deploy capital to achieve attractive risk adjusted returns:

aviation, rail, energy and ports and terminals.

• Commercial air travel and air freight activity have historically been long-term growth sectors and are tied to the underlying demand for passenger and freight movement.

We continue to see long-term demand for aviation related assets.

• The railroad market consists of short line and regional railroads in North America that provide services including haulage, switching and transportation services.

• Offshore energy service equipment refers to vessels supporting the extraction, processing and transportation of oil and natural gas from deposits located beneath the sea floor, as well as the ongoing inspection, repair, maintenance and ultimate abandonment of subsea wells and associated infrastructure.

• Land-based infrastructure refers to facilities that enable the storage, unloading, loading and movement of crude oil and refined products and LPG from producers to end users, such as refineries.

Customers of land-based infrastructure typically purchase capacity on a take-or-pay basis, and the economics of these assets directly relate to the volume of throughput.

Impact of COVID-19

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

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

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

A number of these lessees have been placed on non-accrual status as of December 31, 2021;

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

The value of these deposits was $145.5 million as of December 31, 2021.

As COVID-19 continues to evolve, the extent to which COVID-19 impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to try and contain COVID-19 or treat its impact.

We continue to monitor the pandemic and, the extent to which the continued spread of the virus adversely affects our customer base and therefore revenue.

As the COVID-19 pandemic is complex and rapidly evolving, our plans as described herein may change.

At this point, we cannot reasonably estimate the duration and severity of this pandemic, which could have a material adverse impact on our business, results of operations, financial position and cash flows.

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

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

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

As of December 31, 2022, we had total consolidated assets of $2.4 billion and total equity of $19.4 million.

Impact of Russia’s Invasion of Ukraine

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

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

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

As a result of the sanctions imposed on Russian airlines and related lease terminations, we recognized approximately $47.1 million in provision for credit losses during the year ended December 31, 2022 .

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

As of December 31, 2022 , four aircraft and one engine 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 had not been recovered from Ukraine and Russia during the first quarter of 2022.

As a result, we recognized an impairment charge totaling $120.0 million, net of maintenance deposits, to write-off the carrying value of leasing equipment assets that we have not recovered from Ukraine and Russia for the year ended December 31, 2022 .

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

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

The insured value of the aircraft and engines that remain in Ukraine and Russia is approximately $274.0 million.

We are pursuing all our claims under these policies.

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

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

Spin-Off of FTAI Infrastructure Inc.

(“FTAI Infrastructure”)

On August 1, 2022, Fortress Transportation and Infrastructure Investors LLC (“we”, “us”, “our”, “FTAI” or the “Company” pre-Merger, as defined below, and FTAI Aviation Ltd.

post-Merger) effected a spin-off of the Company’s infrastructure business held by FTAI Infrastructure (a wholly-owned subsidiary of the Company 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 ordinary shares as of July 21, 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 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 remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off.

Following the Merger, the Company entered 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 is entitled to incentive payments on substantially similar terms as the previous arrangements.

On November 10, 2022, the Company completed the transactions set forth in the Agreement and Plan of Merger (the “Merger”) between Fortress Transportation and Infrastructure Investors LLC (“FTAI”) and FTAI Aviation Ltd.

(“FTAI Aviation”) and certain other parties, with FTAI becoming a subsidiary of the company.

As a result of the merger, the FTAI became a Cayman Islands exempted company.

Upon merger completion, Fortress Transportation and Infrastructure Investors LLC public common shareholders’ shares of the Company were exchanged automatically for shares of FTAI Aviation Ltd.

without any further action from the shareholders.

Operating Segments

Our operations consist of two primary strategic business units – Infrastructure and Equipment Leasing.

Our Infrastructure Business acquires long-lived assets that provide mission-critical services or functions to transportation networks and typically have high barriers to entry.

We target or develop operating businesses with strong margins, stable cash flows and upside from earnings growth and asset appreciation driven by increased use and inflation.

Our Equipment Leasing Business acquires assets that are designed to carry cargo or people or provide functionality to transportation infrastructure.

Transportation equipment assets are typically long-lived, moveable and leased by us on either operating leases or finance leases to companies that provide transportation services.

Our leases generally provide for long-term contractual cash flow with high cash-on-cash yields and include structural protections to mitigate credit risk.

Our reportable segments are comprised of interests in different types of infrastructure and equipment leasing assets.

We currently conduct our business through the following four reportable segments:

(i) Aviation Leasing, which is within the Equipment Leasing Business, and (ii) Jefferson Terminal, (iii) Ports and Terminals and (iv) Transtar, which together comprise our Infrastructure Business.

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

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

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

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

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

See Note 4 for additional information.

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

Under ASC 205-20, this disposition met the criteria to be reported as discontinued operations and the assets, liabilities and results of operations have been presented as discontinued operations for all periods presented.

Additionally, in accordance with ASC 280, we assessed our reportable segments and determined that our retained investment of the railroad business no longer met the requirement as a reportable segment.

Accordingly, we have presented this operating segment, along with Corporate results, within Corporate and Other effective in 2019.

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

Additionally, Corporate and Other includes (i) offshore energy related assets which consist of vessels and equipment that support offshore oil and gas activities and are typically subject to operating leases, (ii) an investment in an unconsolidated entity engaged in the leasing of shipping containers, (iii) railroad assets which consist of equipment that support a railcar cleaning business and (iv) various clean technology and sustainability investments .

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

Each segment requires different investment strategies.

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

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

In the fourth quarter of 2021, the Company announced that it intends to spin off its infrastructure business as a separate publicly traded entity.

The infrastructure business is expected to be spun out in an entity taxed as a corporation for U.S.

federal income tax purposes and will hold, among other things, the Jefferson, Repauno, Long Ridge and Transtar assets, and will retain all related project-level debt of those entities.

The infrastructure entity intends to remit to FTAI approximately $800 million in cash as part of the separation.

FTAI is expected to retain the aviation business and certain other assets and FTAI's outstanding corporate indebtedness, other than any indebtedness that may be paid off in connection with the transaction.

The spin off transaction is expected to be completed during the second quarter of 2022.

The spin off transaction remains subject to approval by FTAI's board of directors and may not be completed on the terms described above or at all.

As a result of the spin-off of FTAI Infrastructure effective 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 c ustomers.

The Aerospace Products segment develops and manufactures through a joint venture, and repairs and sells, through exclusivity arrangements, aircraft engines and aftermarket components for aircraft engines.

Prior periods have been restated to reflect the change in accordance with the requirements of ASC 280, Segment Reporting .

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.

On December 27, 2017, SoftBank Group Corp.

(“SoftBank”) completed its acquisition of Fortress (the “SoftBank Merger”).

In connection with the Softbank Merger, Fortress operates within SoftBank as an independent business headquartered in New York.

Results of Operations

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generally accepted accounting principles (“U.S.

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

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

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

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

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

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

The following table presents our consolidated results of operations:

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(in thousands) 2022 2021 2020 '22 vs '21 '21 vs '20

Equipment leasing revenues

Lease income $ 178,874 $ 172,117 $ 177,476 $ 6,757 $ (5,359)

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Finance lease income 440 1,747 2,260 (1,307) (513)

Other revenue 32,901 16,736 4,659 16,165 12,077

Total equipment leasing revenues 335,583 297,934 349,322 37,649 (51,388)

Infrastructure revenues

Lease income 2,424 1,186 3,362 1,238 (2,176)

Rail revenues 56,803 — — 56,803 —

Terminal services revenues 45,038 50,887 42,965 (5,849) 7,922

Crude marketing revenues — 8,210 166,134 (8,210) (157,924)

Asset sales revenue 208,500 — — 208,500 —

Aerospace products revenue 153,550 23,301 — 130,249 23,301

Other revenue 18,201 9,599 16,736 8,602 (7,137)

Total infrastructure revenues 120,219 68,562 229,452 51,657 (160,890)

Total revenues 708,411 335,583 297,934 372,828 37,649

Cost of sales 248,385 14,308 — 234,077 14,308

Operating expenses 132,264 59,615 40,121 72,649 19,494

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Loss on extinguishment of debt (19,859) (3,254) (6,943) (16,605) 3,689

Interest income 1,711 162 531 1,549 (369)

Other (expense) income (10,928) 70 3,445 (10,998) (3,375)

Other income (expense) 207 (490) 94 697 (584)

Total other income (expense) 57,190 43,868 (9,081) 13,322 52,949

(Loss) income from continuing operations before income taxes (131,763) (110,928) 152,132 (20,835) (263,060)

(Benefit from) provision for income taxes (1,057) (5,905) 17,810 4,848 (23,715)

Net (loss) income from continuing operations (130,706) (105,023) 134,322 (25,683) (239,345)

Net income from discontinued operations, net of income taxes — 1,331 73,462 (1,331) (72,131)

Net (loss) income (130,706) (103,692) 207,784 (27,014) (311,476)

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

Loss from continuing operations before income taxes (105,311) (39,735) (43,394) (65,576) 3,659

Provision for (benefit from) income taxes 5,300 3,126 (4,343) 2,174 7,469

Net loss from continuing operations (110,611) (42,861) (39,051) (67,750) (3,810)

Net loss from discontinued operations, net of income taxes (101,416) (87,845) (64,641) (13,571) (23,204)

Net loss (212,027) (130,706) (103,692) (81,321) (27,014)

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

Continuing operations — — — — —

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Dividends on preferred shares 27,164 24,758 17,869 2,406 6,889

Net (loss) income attributable to shareholders $ (128,992) $ (105,039) $ 223,270 $ (23,953) $ (328,309)

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

Net loss attributable to shareholders $ (220,374) $ (128,992) $ (105,039) $ (91,382) $ (23,953)

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

Year Ended December 31, Change

(in thousands) 2022 2021 2020 '22 vs '21 '21 vs '20

Net (loss) income attributable to shareholders from continuing operations $ (128,992) $ (106,370) $ 150,055 $ (22,622) $ (256,425)

(Benefit from) provision for income taxes (1,057) (5,905) 17,810 4,848 (23,715)

Net loss attributable to shareholders from continuing operations $ (137,775) $ (67,619) $ (56,920) $ (70,156) $ (10,699)

Provision for (benefit from) income taxes 5,300 3,126 (4,343) 2,174 7,469

Equity-based compensation expense — — — — —

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190,031 175,718 171,632 14,313 4,086

Interest expense 171,036 98,206 95,585 72,830 2,621

Interest expense and dividends on preferred shares 196,358 179,775 105,311 16,583 74,464

Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)

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Non-controlling share of Adjusted EBITDA — — — — —

(12,508) (9,637) (9,859) (2,871) 222

Adjusted EBITDA (non-GAAP) $ 428,097 $ 322,828 $ 266,469 $ 105,269 $ 56,359

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(2) Includes the following items for the years ended December 31, 2022, 2021 and 2020:

(i) net loss of $(13,242), $(5,435) and $(2,563), (ii) interest expense of $5,612, $1,138 and $131, (iii) depreciation and amortization expense of $12,643, $5,513 and $1,045, (iv) acquisition and transaction expense of $104, $581 and $0, (v) changes in fair value of non-hedge derivative instruments of $19,850, $(589) and $0, (vi) asset impairment of $2,146, $0 and $0 and (vii) equity-based compensation of $779, $0 and $0, respectively.

(3) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) equity-based compensation of $751, $374 and $230, (ii) provision for income taxes of $52, $59 and $60, (iii) interest expense of $3,370, $2,025 and $3,400, (iv) depreciation and amortization expense of $8,411, $6,149 and $4,833, (v) changes in fair value of non-hedge derivative instruments of $(76), $38 and $1,336 and (vi) loss on extinguishment of debt of $0, $992 and $0, respectively.

(i) net loss of $(369), $(1,403) and $(1,932), and (ii) depreciation and amortization expense of $409, $200 and $0, respectively.

Presentation of assets sales

During the third quarter of 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 third and fourth quarters of 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 third and fourth quarters of 2022.

Sales transactions of aircraft and engines prior to the third quarter of 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain (loss) 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.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $89.3 million, primarily due to the acquisition of Transtar and higher revenues in the Aviation Leasing and Ports and Terminals segments, partially offset by lower revenues in the Jefferson Terminal segment.

Equipment Leasing

• Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered.

• Other revenue increased $16.2 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020.

• Lease income decreased $5.4 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Infrastructure

• Rail revenues increased $56.8 million due to the acquisition of Transtar in July 2021.

• Other revenue increased $7.7 million which primarily reflects (i) higher butane sales at Repauno and (ii) a gain on butane forward purchase and sale contracts at Repauno.

• Crude marketing revenues decreased $8.2 million.

In 2019, Jefferson directly sourced crude from producers in Canada, arranging logistics to its terminal and then marketing crude to third parties to take advantage of favorable spreads.

The resulting crude sales and corresponding costs of sale, including logistical costs, are reflected in Crude marketing revenues and Operating expenses, respectively.

Jefferson exited this crude marketing strategy in the fourth quarter of 2019 as a result of unfavorable oil spreads and as certain logistical commitments expired.

Revenues in 2020 include contracts executed in 2019 but delivered in 2020.

• Terminal services revenue decreased $5.8 million which primarily reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19.

Total expenses increased $150.7 million primarily due to increases in (i) interest expense, (ii) operating expenses, (iii) depreciation and amortization and (iv) acquisition and transaction expenses, partially offset by a decrease in (v) asset impairment.

Interest expense increased $72.8 million primarily due to:

• an increase of $67.6 million in Corporate and Other primarily which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which was redeemed in full in May 2021;

• an increase of $5.4 million at Jefferson Terminal due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement.

Total revenues increased $372.8 million, primarily due to an increase in Asset sales revenue, Aerospace Products revenue, maintenance revenue, other revenue and lease income.

Asset sales revenue increased $208.5 million primarily due to an increase in the sale of commercial aircraft and engines in our Aviation Leasing segment during 2022.

See above discussion regarding presentation of asset sales.

Aerospace Products revenue increased $130.2 million driven by an increase in sales relating to the CFM56-7B and CFM56-5B engines, engine modules, spare parts and used material inventory as operations continue to ramp-up in 2022.

See above discussion regarding presentation of asset sales.

Maintenance revenue increased $20.0 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft in the prior year and lower maintenance billings related to the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Other revenue increased $8.6 million primarily due primarily due to an increase in end-of lease redelivery compensation.

Lease income increased $6.8 million primarily due to an increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.

This increase was partially offset by the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Basic lease revenues from our owned aircraft and engines leased to Russian airlines was approximately $39.8 million for the year ended December 31, 2021.

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

Total expenses increased $451.7 million primarily due to higher (i) cost of sales, (ii) asset impairment charges, (iii) operating expenses, (iv) interest expense, (v) depreciation and amortization, and (vi) management fees and incentive allocation to affiliate partially offset by lower (vii) acquisition and transaction expenses.

Cost of sales increased $234.1 million primarily as a result of an increase in asset sales and Aerospace Product sales and the gross presentation of asset sales revenue and Aerospace Product revenues as described above.

Asset impairment increased $126.8 million primarily due to the write down of aircraft and engines located in Ukraine and Russia that may not be recoverable.

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

Operating expenses increased $72.6 million primarily due to:

• an increase of $29.0 million due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expense;

• an increase in bad debt expense of $9.4 million in the Aviation Leasing segment;

• an increase in cost of sales and other associated costs of $6.8 million, which primarily reflects (i) an increase of $17.2 million in the Aviation Leasing segment due to costs associated with the sale of engine parts, partially offset by (ii) a decrease of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (iii) a decrease of $2.3 million at Repauno;

• an increase in shipping and storage expense of $4.6 million primarily in the Aviation Leasing segment.

Depreciation and amortization increased $29.4 million which primarily reflects (i) an increase of $14.5 million due to additional assets placed into service at Repauno and Jefferson Terminal and (ii) an increase of $8.3 million due to the acquisition of Transtar.

Acquisition and transaction expenses increased $12.1 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021, primarily related to early lease terminations, in the Aviation Leasing segment.

Total other income increased $40.6 million which primarily reflects:

• an increase of $49.3 million in gains on sale of assets, net due to asset sales in the Aviation Leasing segment;

• a decrease in loss on extinguishment of debt of $8.4 million;

• an increase in other expense of $11.0 million primarily due to a write-off of an earn-out receivable at Long Ridge and losses related to crude oil forward transactions at Jefferson Terminal;

• an increase of $7.7 million in equity in losses of unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

• an increase of $48.5 million in the Aviation Leasing segment primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses.

• an increase of $17.6 million in the Offshore Energy business which reflects increases in offshore crew expenses, project costs and other operating expenses as our vessels were on-hire longer in 2022 compared to 2021, as well as crane repairs on one of our vessels.

• an increase of $6.5 million in the Aerospace Products segment primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in professional fees and other operating expenses due to the ramp-up of Aerospace Products.

Interest expense increased $14.2 million, which reflects an increase in the average outstanding debt of approximately $354.7 million due to increases in (i) the Senior Notes due 2028 of $459.7 million, (ii) the 2021 Bridge Loans issued in December 2021 and February 2022 of $169.9 million and (iii) the Revolving Credit Facility of $49.7 million, partially offset by a decrease in (iv) the Bridge Loans of $108.3 million, (v) the Senior Notes due 2022 of $133.1 million, which was redeemed in full in May 2021, and (vi) the Senior Notes due 2025 of $83.2 million, which were partially redeemed in August 2022.

Depreciation and amortization increased $5.2 million primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Management fees and incentive allocation to affiliate increased $2.9 million primarily due to an increase in incentive fee due to the Manager.

Acquisition and transaction expenses decreased $4.7 million primarily due to a decrease in professional fees related to the Transtar acquisition in 2021.

Other income (expense)

Total other income increased $13.3 million primarily due to (i) an increase of $28.2 million in gain on sale of assets, net in the Aviation Leasing and Aerospace Products segments from more opportunistic asset sales transactions, partially offset by (ii) an increase of $16.6 million in loss on extinguishment of debt primarily related to the 2022 paydown of the 2021 Bridge Loan and the partial redemption of the Senior Notes due 20 25 in connection with the spin-off of FTAI Infrastructure.

See above discussion regarding presentation of asset sales and impact on gain on sales of assets, net.

Provision for income taxes

The benefit from income taxes decreased $4.8 million primarily due to the acquisition of Transtar and a higher provision in the Aviation Leasing segment.

Net (loss) income from continuing operations

The provision for income taxes increased $2.2 million primarily due to a higher provision in the Aerospace Products segment.

Net loss from continuing operations

Net loss from continuing operations increased $67.8 million primarily due to the changes noted above.

Net loss from discontinued operations

Net loss from discontinued operations increased $13.6 million primarily due to:

• An increase in net loss of $34.7 million in the Ports and Terminals business in 2022 of which $32.6 million relates to our equity pick-up in net losses for the Long Ridge investment.

• An increase in acquisition and transaction expense of $11.9 million during 2022 related to the spin-off of the infrastructure business;

• Offset by a decrease in net loss of $22.6 million in the Jefferson business in 2022 which is primarily driven by seven months of activity during 2022 compared to a full year of activity in 2021;

• An increase in net income of $8.4 million on the Transtar business, which was acquired on July 28, 2021.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $105.3 million primarily due to the changes noted above.

Aviation Leasing

As of December 31, 2021, in our Aviation Leasing segment, we own and manage 315 aviation assets, consisting of 108 commercial aircraft and 207 engines.

Comparison of the years ended December 31, 2021 and 2020

Total revenues increased $37.6 million , primarily due to increases in maintenance revenue and Aerospace Products revenue, partially offset by decreases in other revenue and lease income.

Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered.

Aerospace Products revenue increased $23.3 million driven by an increase in sales relating to engine modules, spare parts and used material inventory as operations began in 2021.

Lease income decreased $5.4 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Other revenue decreased $7.1 million primarily due to lower end-of-lease redelivery compensation and the settlement of an engine loss during 2020.

Total expenses increased $86.9 million primarily due to highe r interest expense, operating expenses, cost of sales, acquisition and transaction expenses, and depreciation and amortization, partially offset by lower asset impairment charges and management fees and incentive allocation to affiliate.

Interest expense increased $67.6 million, which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which were redeemed in full in May 2021.

Operating expenses increased $19.5 million primarily as a result of an increase of bad debt expense as certain customers continued to experience liquidity issues due to the on-going effects of COVID, commissions related to sales from the used serviceable material program, shipping and storage fees, repairs and maintenance expense and other operating expenses.

Cost of sales increased $14.3 million primarily as a result of an increase in Aerospace Product revenues.

Acquisition and transaction expenses increased $8.0 million primarily due an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

Depreciation and amortization increased $6.5 million primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Asset impairment decreased $23.5 million primarily due lower asset impairment charges in 2021, which were primarily related to early lease terminations in 2020.

Management fees and incentive allocation to affiliate decreased $4.8 million which reflects a decrease in the base management fee as our average total equity was lower in 2021 compared to 2020.

Other income (expense)

Total other income increased $52.9 million primarily due to an increase of $49.3 million in gain on sale of assets, net in the Aviation Leasing and Aerospace Products segments from opportunistic asset sales transactions, partially offset by a decrease of $3.7 million in loss on extinguishment of debt.

Provision for income taxes

The provision for income taxes increased $7.5 million primarily due to higher provisions from sales in the Aviation Leasing and Aerospace Products segments.

Net loss from continuing operations

Net loss from continuing operations increased $3.8 million primarily due to the changes noted above.

Net loss from discontinued operations

Net loss from discontinued operations increased $23.2 million primarily due to:

• An increase in net loss of $21.5 million on the Jefferson business in 2021 which primarily reflects (i) a decrease in crude marketing revenue of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in 2019 and final transactions settling in the first quarter of 2020, (ii) a decrease in terminal services revenues of $6.2 million which reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19 and (iii) increased expenses of $7.5 million.

• An increase in net loss of $12.8 million on the Ports and Terminals business in 2021 of which $8.2 million relates to our equity pick-up in net losses for the Long Ridge investment;

• An increase in acquisition and transaction expense of $4.0 million during 2021 related to the spin-off of the infrastructure business;

• Offset by a partial year of income of $15.3 million from the Transtar business, which was acquired on July 28, 2021.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $56.4 million primarily due to the changes noted above.

Aviation Leasing Segment

As of December 31, 2022, in our Aviation Leasing segment, we own and manage 330 aviation assets, consisting of 106 commercial aircraft and 224 engine s, including four aircraft and one engine that were still located in Ukraine and eight aircraft and seventeen engines that were still located in Russia.

As of December 31, 2022, 79 of our commercial aircraft and 133 of our engines were leased to operators or other third parties.

17 unchanged sentences

(in thousands) 2022 2021 2020 '22 vs '21 '21 vs '20

Equipment leasing revenues

Lease income $ 158,628 $ 161,986 $ 166,331 $ (3,358) $ (4,345)

1 unchanged sentence

Finance lease income 440 1,747 2,260 (1,307) (513)

Asset sales revenue 208,500 — — 208,500 —

Other revenue 11,499 5,569 11,158 5,930 (5,589)

Total revenues 527,913 298,121 281,211 229,792 16,910

Cost of sales 159,490 — — 159,490 —

Operating expenses 81,232 32,757 20,667 48,475 12,090

3 unchanged sentences

Total expenses 524,122 183,880 195,236 340,242 (11,356)

Other (expense) income

Equity in losses of unconsolidated entities (1,403) (1,932) (1,829) 529 (103)

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 740 — (1,932) 740 1,932

Gain (loss) on sale of assets, net 58,649 29,098 (300) 29,551 29,398

Interest income 1,153 94 104 1,059 (10)

Other expense (1,680) — — (1,680) —

Other income (expense) 246 (527) 94 773 (621)

Total other income (expense) 59,635 28,571 (2,138) 31,064 30,709

17 unchanged sentences

181,372 167,656 164,250 13,716 3,406

Interest expense — — — — —

Interest expense and dividends on preferred shares — — — — —

Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)

925 — (1,932) 925 1,932

Equity in losses of unconsolidated entities 1,403 1,932 1,829 (529) 103

Equity in (earnings) losses of unconsolidated entities (740) — 1,932 (740) (1,932)

Non-controlling share of Adjusted EBITDA — — — — —

4 unchanged sentences

(2) Includes the following items for the years ended December 31, 2022, 2021 and 2020:

(i) net loss of $(1,403), $(1,932) and $(1,829) and (ii) depreciation and amortization of $200, $0 and $0, respectively.

(i) net income (loss) of $740, $— and $(1,932) and (ii) depreciation and amortization of $185, $0 and $0, respectively.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $40.2 million driven by higher maintenance revenue and other revenue partially offset by lower lease income.

• Other revenue increased $17.7 million primarily due to the increase in engine parts sales, partially offset by lower end-of lease redelivery compensation and the settlement of an engine loss during 2020.

• Lease income decreased $4.3 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Total expenses increased $15.1 million primarily due to an increase in operating expenses and depreciation and amortization expense, partially offset by a decrease in asset impairment and acquisition and transaction expense.

• Operating expenses increased $35.4 million primarily as a result of an increase in costs associated with the sale of engine parts, bad debt expense, shipping and storage fees and other operating expenses.

• Depreciation and amortization expense increased $6.1 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Asset impairment decreased $23.5 million due to lower asset impairment charges in 2021 which are primarily related to early lease terminations.

Total revenues increased $229.8 million driven by an increase in asset sales revenue, maintenance revenue and other revenue, partially offset by a decrease in lease income.

• Asset sales revenue increas ed $208.5 million primarily due to an increase in the sale of commercial aircraft and engines during 2022.

See above discussion regarding presentation of asset sales.

• Maintenance revenue increased $20.0 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft in the prior year and lower maintenance billings related to the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

• Other revenue increased $5.9 million primarily due to an increase in end-of lease redelivery compensation.

• Lease income decreased $3.4 million primarily due to the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Basic lease revenues from our owned aircraft and engines leased to Russian airlines was approximately $39.8 million for the year ended December 31, 2021.

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

Total expenses increased $340.2 million primarily driven by an increase in cost of sales, asset impairment, operating expenses and depreciation and amortization expense.

• Cost of sales increased $159.5 million primarily as a result of an increase in asset sales and the gross presentation of asset sales revenues and related costs of sales as described above.

• Asset impairment increased $126.8 million primarily due to the write down of aircraft and engines located in Ukraine and Russia that may not be recoverable.

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

• Acquisition and transaction expense decreased $2.8 million driven by lower compensation and related costs associated with the acquisition of aviation leasing equipment.

Total other income increased $49.2 million primarily due to an increase of $49.3 million in gain on the sale of leasing equipment in 2021, an increase of $1.1 million in interest income and a decrease of $0.5 million in Aviation Leasing’s proportionate share of the unconsolidated entities’ net loss, partially offset by an increase of $1.7 million in other expenses.

• Operating expenses increased $48.5 million primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses.

• Depreciation and amortization expense increased $4.6 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Total other income increased $31.1 million primarily due to (i) an increase of $29.6 million in g ain on the sale of assets, net due to more opportunistic sales transactions, (ii) a decrease of $0.8 million in other expenses and, (iii) an increase of $0.7 million in our proportionate share of unconsolidated entities’ net income.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $62.2 million primarily due to the changes noted above.

Jefferson Terminal

The following table presents our results of operations for our Jefferson Terminal segment:

Year Ended December 31, Change

(in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19

Infrastructure revenues

Lease income $ 1,688 $ 1,186 $ 2,306 $ 502 $ (1,120)

Terminal services revenues 44,664 50,887 35,908 (6,223) 14,979

Crude marketing revenues — 8,210 166,134 (8,210) (157,924)

Total revenues 46,352 60,283 204,348 (13,931) (144,065)

Operating expenses 48,255 53,072 231,506 (4,817) (178,434)

Depreciation and amortization 36,013 29,034 22,873 6,979 6,161

Interest expense 14,812 9,426 16,189 5,386 (6,763)

Total expenses 99,080 91,532 270,568 7,548 (179,036)

Other (expense) income

Equity in losses of unconsolidated entities — — (292) — 292

(Loss) gain on sale of assets, net — (8) 4,636 8 (4,644)

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

Interest income — 22 118 (22) (96)

Other (expense) income (4,726) 70 634 (4,796) (564)

Total other (expense) income (4,726) (4,640) 5,096 (86) (9,736)

Loss before income taxes (57,454) (35,889) (61,124) (21,565) 25,235

Provision for income taxes 230 278 284 (48) (6)

Net loss (57,684) (36,167) (61,408) (21,517) 25,241

Net loss attributable to non-controlling interest in consolidated subsidiaries (26,250) (16,483) (17,356) (9,767) 873

Net loss attributable to shareholders $ (31,434) $ (19,684) $ (44,052) $ (11,750) $ 24,368

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

Year Ended December 31, Change

(in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19

Net loss attributable to shareholders $ (31,434) $ (19,684) $ (44,052) $ (11,750) $ 24,368

Provision for income taxes 230 278 284 (48) (6)

Equity-based compensation expense 3,215 1,676 1,054 1,539 622

Acquisition and transaction expenses — — — — —

Losses on the modification or extinguishment of debt and capital lease obligations — 4,724 — (4,724) 4,724

Changes in fair value of non-hedge derivative instruments — 181 6,364 (181) (6,183)

Asset impairment charges — — — — —

Incentive allocations — — — — —

Depreciation and amortization expense 36,013 29,034 22,873 6,979 6,161

Interest expense 14,812 9,426 16,189 5,386 (6,763)

Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)

— — 656 — (656)

Equity in losses of unconsolidated entities — — 292 — (292)

Non-controlling share of Adjusted EBITDA (2)

(12,205) (9,517) (9,820) (2,688) 303

Adjusted EBITDA (non-GAAP) $ 10,631 $ 16,118 $ (6,160) $ (5,487) $ 22,278

__________________________________________________

(1) Includes the following items for the year ended December 31, 2019:

(i) net loss of $(349) and (ii) depreciation and amortization expense of $1,005.

(2) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) equity-based compensation of $723, $352 and $221, (ii) provision for income taxes of $52, $59 and $60, (iii) interest expense of $3,331, $1,979 and $3,400, (iv) changes in fair value of non-hedge derivative instruments of $0, $38 and $1,336, (v) depreciation and amortization expense of $8,099, $6,097 and $4,803 and (vi) loss on extinguishment of debt of $0, $992 and $0, respectively.

Comparison of the years ended December 31, 2021 and 2020

Total revenues decreased $13.9 million which primarily reflects (i) a decrease in crude marketing revenue of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019 and (ii) a decrease in terminal services revenues of $6.2 million which reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19.

Total expenses increased $7.5 million which reflects:

• an increase in depreciation and amortization of $7.0 million due to additional assets placed into service;

• an increase in interest expense of $5.4 million due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement;

• a decrease in operating expenses of $4.8 million which primarily reflects (i) a decrease in cost of sales due to Jefferson Terminal exiting the crude marketing strategy in the fourth quarter of 2019, a portion of which was recognized in 2020, partially offset by (ii) higher insurance and other facility operating expenses.

Other (expense) income

Other expense increased $4.8 million due to losses related to crude oil forward transactions.

Loss on extinguishment of debt decreased $4.7 million due to a debt refinancing in 2020.

See Note 10 to the consolidated financial statements for additional information.

Total revenues increased $16.9 million driven by an increase in maintenance revenue, partially offset by a decrease in other revenue and lease income.

• Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization due to additional travel and recoveries from COVID and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered.

• Other revenue decreased $5.6 million primarily due to lower end-of-lease redelivery compensation and the settlement of an engine loss during 2020 .

Total expenses decreased $11.4 million primarily driven by a decrease in asset impairment, partially offset by an increase in operating expenses and depreciation and amortization expense.

• Asset impairment decreased $23.5 million primarily due lower asset impairment charges in 2021 which were primarily related to early lease terminations due to COVID in 2020.

• Operating expenses increased $12.1 million primarily as a result of an increase in bad debt expense, shipping and storage fees, repairs and maintenance expenses and other operating expenses.

• Depreciation and amortization expense increased $5.8 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Total other income increased $30.7 million primarily due to an increase of $29.4 million in gain on sale of assets, net and a decrease of $1.9 million in our proportionate share of unconsolidated entities’ net loss.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $5.5 million primarily due to the changes noted above.

Ports and Terminals

The following table presents our results of operations for our Ports and Terminals segment:

Adjusted EBITDA increased $33.2 million primarily due to the changes noted above.

Aerospace Products Segment

Our engine and module sales are facilitated through The Module Factory, a dedicated commercial maintenance program, designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines, performed by a third party.

Used serviceable material is sold through our exclusive partnership with AAR Corp, who is responsible for the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool.

We also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.

The following table presents our results of operations:

Year Ended December 31, Change

(in thousands) 2022 2021 2020 '22 vs '21 '21 vs '20

Infrastructure revenues

Lease income $ — $ — $ 1,056 $ — $ (1,056)

Terminal services revenues 374 — 7,057 374 (7,057)

Other revenue 11,243 3,855 14,074 7,388 (10,219)

Total revenues 11,617 3,855 22,187 7,762 (18,332)

Aerospace products revenue $ 153,550 $ 23,301 $ — $ 130,249 $ 23,301

Cost of sales 88,895 14,308 — 74,587 14,308

Operating expenses 11,967 5,429 — 6,538 5,429

1 unchanged sentence

Depreciation and amortization 258 66 — 192 66

Asset impairment — — 4,726 — (4,726)

Interest expense 1,147 1,335 1,712 (188) (377)

Total expenses 101,363 19,803 — 81,560 19,803

Other (expense) income

Other income (expense)

Equity in losses of unconsolidated entities (1,109) (1,403) — 294 (1,403)

Gain on sale of assets, net 18,562 19,917 — (1,355) 19,917

Interest income 318 — 289 318 (289)

Other (expense) income (4,100) — 1,809 (4,100) (1,809)

Total other (expense) income (15,195) (3,222) 118,566 (11,973) (121,788)

(Loss) income before income taxes (28,180) (13,433) 94,604 (14,747) (108,037)

(Benefit from) provision for income taxes (3,749) (1,791) 14,700 (1,958) (16,491)

Net (loss) income (24,431) (11,642) 79,904 (12,789) (91,546)

Net loss attributable to non-controlling interest in consolidated subsidiaries (222) (39) (215) (183) 176

Net (loss) income attributable to shareholders $ (24,209) $ (11,603) $ 80,119 $ (12,606) $ (91,722)

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

Year Ended December 31, Change

(in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19

Net (loss) income attributable to shareholders $ (24,209) $ (11,603) $ 80,119 $ (12,606) $ (91,722)

(Benefit from) provision for income taxes (3,749) (1,791) 14,700 (1,958) (16,491)

Equity-based compensation expense 823 649 455 174 194

Acquisition and transaction expenses — 907 5,008 (907) (4,101)

Losses on the modification or extinguishment of debt and capital lease obligations — — — — —

Changes in fair value of non-hedge derivative instruments (2,220) — (1,809) (2,220) 1,809

Asset impairment charges — — 4,726 — (4,726)

Incentive allocations — — — — —

Depreciation and amortization expense 9,052 1,497 9,849 7,555 (8,352)

Interest expense 1,147 1,335 1,712 (188) (377)

Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)

29,405 3,304 (153) 26,101 3,457

Equity in losses of unconsolidated entities 11,429 3,222 192 8,207 3,030

Non-controlling share of Adjusted EBITDA (2)

(303) (120) (39) (183) (81)

Adjusted EBITDA (non-GAAP) $ 21,375 $ (2,600) $ 114,760 $ 23,975 $ (117,360)

__________________________________________________

(1) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) net loss of $(11,430), $(3,222) and $(193), (ii) depreciation expense of $12,443, $5,513 and $40, (iii) interest expense of $5,513, $1,021 and $0, (iv) acquisition and transaction expense of $104, $581 and $0, (v) changes in fair value of non-hedge derivative instruments of $19,850, $(589) and $0, (vi) asset impairment of $2,146, $0 and $0 and (vii) equity-based compensation of $779, $0 and $0, respectively.

(2) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) equity-based compensation of $28, $22 and $9, (ii) interest expense of $39, $46 and $0, (iii) depreciation expense of $312, $52 and $30 and (iv) changes in fair value of non-hedge derivative instruments of $(76), $0 and $0, respectively.

Comparison of the years ended December 31, 2021 and 2020

Total revenues increased $7.8 million, primarily due to (i) an increase in butane sales of $5.2 million at Repauno, (ii) a gain of $2.2 million on butane forward purchase contracts at Repauno and (iii) an increase of $0.4 million due to the commencement of transloading at Repauno .

Total expenses increased $10.5 million primarily due to:

• an increase in operating expenses of $4.1 million which primarily reflects increases in (i) property taxes due to new assets at Repauno, (ii) facility operating expenses due to higher butane volumes, (iii) compensation and benefits due to additional headcount at Repauno and (iv) professional fees;

• an increase in depreciation expense of $7.6 million due to assets being placed into service at Repauno;

• a decrease in acquisition and transaction expense of $0.9 million due to no acquisition transactions in 2021.

Other expense

Total other expense increased $12.0 million primarily due to increases in (i) other expense due to the write-off of an earn-out receivable of $4.1 million at Long Ridge and (ii) equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.

Benefit from income taxes

The benefit from income taxes increased $2.0 million which primarily reflects a deferred tax benefit due to higher pre-tax losses in 2021.

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA increased $24.0 million primarily due to (i) an increase in the Pro-rata share of Adjusted EBITDA from unconsolidated entities and (ii) the changes noted above.

On July 28, 2021, we completed the acquisition for 100% of the equity interests of Transtar from U.S.

Steel (“USS”) for total cash consideration of $636.0 million.

Transtar is comprised of five freight railroads and one switching company, of which two railroads are connected to USS's largest production facilities.

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

The following table presents our results of operations for our Transtar segment:

Year Ended December 31, Change

(in thousands) 2021 2020 2019 '21 vs '20 '20 vs '19

Infrastructure revenues

Lease income $ 736 $ — $ — $ 736 $ —

Rail revenues 56,803 — — 56,803 —

Total revenues 57,539 — — 57,539 —

Operating expenses 28,987 — — 28,987 —

Acquisition and transaction expenses 2,841 — — 2,841 —

Depreciation and amortization 8,320 — — 8,320 —

Interest expense 53 — — 53 —

Total expenses 40,201 — — 40,201 —

Other expense

Other expense (423) — — (423) —

Total other expense (423) — — (423) —

Total other income 17,453 18,514 — (1,061) 18,514

Income before income taxes 69,640 22,012 — 47,628 22,012

15 unchanged sentences

Depreciation and amortization expense 258 66 — 192 66

Interest expense 53 — — 53 —

Interest expense and dividends on preferred shares — — — — —

Pro-rata share of Adjusted EBITDA from unconsolidated entities (1)

(885) (1,203) — 318 (1,203)

Equity in losses of unconsolidated entities 1,109 1,403 — (294) 1,403

1 unchanged sentence

Adjusted EBITDA (non-GAAP) $ 70,365 $ 22,278 $ — $ 48,087 $ 22,278

Financial results for the year ended December 31, 2021

Total revenues were $57.5 million, which primarily consists of switching, interline, and ancillary rail services.

Total expenses were $40.2 million, which primarily consists of (i) operating expenses of $29.0 million which primarily includes compensation and benefits of $19.0 million and facility operating expense of $7.0 million and (ii) depreciation and amortization of $8.3 million.

__________________________________________________

(1) Includes the following items for the years ended December 31, 2022, 2021 and 2020:

(i) net loss of $(1,109), $(1,403) and $0 and (ii) depreciation and amortization of $224, $200 and $0, respectively.

Comparison of the years ended December 31, 2022 and 2021

Total Aerospace Products revenue increased $130.2 million primarily driven by an increase in sales relating to the CFM56-7B and CFM56-5B engines, engine modules, spare parts and used material inventory as operations continued to ramp-up in 2022.

See above discussion regarding presentation of asset sales.

Total expenses increased $81.6 million primarily due to an increase in costs of sales and operating expenses.

• Cost of sales increased $74.6 million primarily as a result of an increase in Aerospace Product sales and the gross presentation described above.

• Operating expenses increased $6.5 million primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in professional fees and other operating expenses due to the ramp-up of Aerospace Products.

Other income (expense)

Total other income decreased $1.1 million which primarily reflects a decrease of $1.4 million in gain on sale of assets, net partially offset by a decrease of $0.3 million in our proportionate share of unconsolidated entities’ net loss.

See above discussion regarding presentation of asset sales.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA was $28.1 million primarily due to the activity noted above.

Adjusted EBITDA increased $48.1 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2021 and 2020

Total Aerospace Products revenue increased $23.3 million primarily driven by an increase in sales relating to engine modules, spare parts and used material inventory as operations began in 2021.

Total expenses increased $19.8 million primarily due to an increase in costs of sales and operating expenses.

• Cost of sales increased $14.3 million primarily as a result of an increase in Aerospace Product sales.

• Operating expenses increased $5.4 million primarily due to an increase in commission expenses due to the increase in sales from the used serviceable material program as well as an increase in professional fees and other operating expenses due to the ramp-up of Aerospace Products.

Other income (expense)

Total other income increased $18.5 million, which primarily reflects an increase of $19.9 million in gain on sale of assets, net from sales that began in 2021 partially offset by an increase of $1.4 million i n our proportionate share of unconsolidated entities’ net loss.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $22.3 million primarily due to the changes noted above.

Corporate and Other

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(in thousands) 2022 2021 2020 '22 vs '21 '21 vs '20

Equipment leasing revenues

Lease income $ 20,246 $ 10,131 $ 11,145 $ 10,115 $ (1,014)

Other revenue 6,702 4,030 5,578 2,672 (1,548)

Total equipment leasing revenues 14,161 16,723 12,647 (2,562) 4,076

Infrastructure revenues

Other revenue 4,711 4,424 2,917 287 1,507

Total infrastructure revenues 4,711 4,424 2,917 287 1,507

Total revenues 26,948 14,161 16,723 12,787 (2,562)

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Other (expense) income

Equity in earnings (losses) of unconsolidated entities 98 115 (62) (17) 177

Loss on extinguishment of debt (19,859) (3,254) (6,943) (16,605) 3,689

Interest income 240 46 20 194 26

Other income 1 — 1,002 1 (1,002)

Total other (expense) income (2,915) (6,782) 960 3,867 (7,742)

Other (expense) income (39) 37 — (76) 37

Total other expense (19,898) (3,217) (6,943) (16,681) 3,726

Loss before income taxes (238,377) (204,559) (127,231) (33,818) (77,328)

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Dividends on preferred shares 27,164 24,758 17,869 2,406 6,889

Net loss attributable to shareholders $ (245,887) $ (163,732) $ (144,791) $ (82,155) $ (18,941)

Net loss attributable to shareholders from continuing operations $ (265,378) $ (229,235) $ (145,569) $ (36,143) $ (83,666)

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

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(in thousands) 2022 2021 2020 '22 vs '21 '21 vs '20

Net loss attributable to shareholders $ (245,887) $ (163,732) $ (144,791) $ (82,155) $ (18,941)

Net loss attributable to shareholders from continuing operations $ (265,378) $ (229,235) $ (145,569) $ (36,143) $ (83,666)

(Benefit from) provision for income taxes (163) (82) 469 (81) (551)

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Depreciation and amortization expense 8,401 7,996 7,382 405 614

Interest expense 155,024 87,445 77,684 67,579 9,761

Interest expense and dividends on preferred shares 196,358 179,775 105,311 16,583 74,464

Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — —

(310) (164) (61) (146) (103)

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

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Adjusted EBITDA (non-GAAP) $ (26,393) $ (21,363) $ (22,283) $ (5,030) $ 920

__________________________________________________

(1) Includes the following items for the years ended December 31, 2021, 2020 and 2019:

(i) net loss of $(409), $(281) and $(192) and (ii) interest expense of $99, $117 and $131, respectively.

Comparison of the years ended December 31, 2022 and 2021

Equipment leasing revenues decreased $2.6 million in our offshore business as one of our vessels was on hire longer in 2020 compared to 2021.

Total expenses increased $77.4 million due to higher (i) interest expense and (ii) acquisition and transaction expenses, partially offset by lower (iii) management fees and incentive allocation to affiliate.

Interest expense increased $67.6 million which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which was redeemed in full in May 2021.

Acquisition and transaction expenses increased $13.0 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

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

Other (expense) income

Other expense decreased $3.9 million primarily due to a lower loss on extinguishment of debt of $3.7 million.

Total revenues increased $12.8 million primarily due to an increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.

Total expenses increased $29.9 million primarily due to higher interest expense, operating expenses, management fees and incentive allocation to affiliate partially offset by lower acquisition and transaction expenses.

• Interest expense increased $14.2 million, which reflects an increase in the average outstanding debt of approximately $354.7 million due to increases in (i) the Senior Notes due 2028 of $459.7 million, (ii) the 2021 Bridge Loans issued in December 2021 and February 2022 of $169.9 million and (iii) the Revolving Credit Facility of $49.7 million, partially offset by a decrease in (iv) the Bridge Loans of $108.3 million, (v) the Senior Notes due 2022 of $133.1 million, which was redeemed in full in May 2021, and (vi) the Senior Notes due 2025 of $83.2 million, which were partially redeemed in August 2022.

• Operating expenses increased $17.6 million which reflects increases in offshore crew expenses, project costs and other operating expenses as our vessels were on-hire longer in 2022 compared to 2021, as well as crane repairs on one of our vessels.

• Management fees and incentive allocation to affiliate increased $2.9 million primarily due to an increase in incentive fee due to the Manager.

• Acquisition and transaction expenses decreased $5.9 million primarily due a decrease in professional fees related to the Transtar acquisition in 2021.

Other expense

Total other expense increased $16.7 million which primarily reflects $16.6 million increase in loss on extinguishment of debt primarily related to the pay-down of the 2021 Bridge Loans and the partial redemption of the Senior Notes due 2025.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $5.0 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2021 and 2020

Total revenues de creased $2.6 million primarily due to a decrease in the Offshore Energy business as one of our vessels was on-hire longer in 2020 compared to 2021.

Total expenses increased $78.5 million primarily due to higher interest expense and acquisition and transaction expenses, partially offset by lower management fees and incentive allocation to affiliate.

• Interest expense increased $67.6 million , which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which were redeemed in full in May 2021.

• Acquisition and transaction expenses increased $13.7 million primarily d ue an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

• Management fees and incentive allocation to affiliate decreased $4.8 million which reflects a decrease in the base management fee as our average total equity was lower in 2021 compared to 2020.

Other expense

Total other expense decreased $3.7 million which primarily reflects a $3.7 million decrease in loss on extinguishment of debt.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $0.9 million primarily due to the changes noted above.

Transactions with Affiliates and Affiliated Entities

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Geographic Information

Please refer to Note 19 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers, for the years ended December 31, 2021, 2020 and 2019, as well as a report, by geographic area for each segment, of our total property, plant and equipment and equipment held for lease as of December 31, 2021 and 2020.

Please refer to Note 14 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers, for the years ended December 31, 2022, 2021 and 2020, as well as a report of our total property, plant and equipment as of December 31, 2022 and 2021.

Liquidity and Capital Resources

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

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

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

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

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

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

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

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

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

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

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

In December 2021, we entered into an agreement for senior secured bridge term loans (“2021 Bridge Loans”) in an aggregate principal amount of $350 million, which we used to finance or refinance certain assets.

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

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 ordinary shares as of July 21, 2022.

The distribution was completed on August 1, 2022.

In connection with the spin-off, completed on August 1, 2022, FTAI Infrastructure paid a dividend of $730.3 million to the Company.

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

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

This includes limiting discretionary spending across the organization and re-prioritizing our capital projects amid the COVID-19 pandemic.

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

• Cash used for the purpose of making investments was $1.5 billion, $597.5 million and $942.5 million during the years ended December 31, 2021, 2020, and 2019, respectively.

This includes limiting discretionary spending across the organization and re-prioritizing our investments amid the COVID-19 pandemic and market volatility.

Our principal uses of liquidity have been and continue to be (i) acquisitions of aircraft and engines, (ii) dividends to our ordinary and preferred shareholders, (iii) expenses associated with our operating activities, and (iv) debt service obligations associated with our investments.

• Cash used for the purpose of making investments was $831.5 million, $1.5 billion and $597.5 million during the years ended December 31, 2022, 2021, and 2020, respectively.

• Distributions to shareholders, including cash dividends, were $155.6 million, $142.8 million and $131.4 million during the years ended December 31, 2022, 2021 and 2020, respectively.

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Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities.

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

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

• Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $29.4 million, $16.9 million and $110.3 million during the years ended December 31, 2022, 2021, and 2020, respectively.

• During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1.0 billion, (ii) Revolving Credit Facility of $690.0 million, (iii) Bridge Loan Agreement of $650.0 million, (iv)

Series 2021 Bonds of $425.0 million, (v) 2021 Bridge Loans of $100.5 million and (vi) EB-5 Loan Agreement of $26.1 million.

• During the year ended December 31, 2022, additional borrowings were obtained in connection with the (i) 2021 Bridge Loans of $239.5 million (ii) Revolving Credit Facility of $565.0 million and (iii) EB-5 Loan Agreement of $9.5 million .

We made total principal repayments of (i) $604.5 million relating to the Revolving Credit Facility, (ii) $340.0 million related to the 2021 Bridge Loans and (iii) $200.0 million related to the Senior Notes due 2025.

During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1.0 billion, (ii) Revolving Credit Facility of $690.0 million, (iii) Bridge Loan Agreement of $650.0 million, (iv) Series 2021 Bonds of $425.0 million, (v) 2021 Bridge Loans of $100.5 million and (vi) EB-5 Loan Agreement of $26.1 million.

We made principal payments of $1.6 billion related to the Bridge Loan Agreement, Revolving Credit Facility and Senior Notes due 2022.

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We made principal payments of $852.2 million related to the Senior Notes due 2022, Revolving Credit Facility, Series 2016 Bonds, Jefferson Revolver, Series 2012 Bonds and FTAI Pride Credit Agreement.

During the year ended December 31, 2019, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $250.0 million, (ii) LREG Credit Agreement of $173.5 million, (iii) Senior Notes due 2025 of $148.7 million, (iv) Senior Notes due 2022 of $147.8 million, (v) DRP Revolver of $25.0 million, (vi) Jefferson Revolver of $23.2 million and (vii) CMQR Credit Agreement of $20.9 million.

We made principal payments of $405.1 million primarily related to the Revolving Credit Facility, Jefferson Revolver and CMQR Credit Agreement.

• Proceeds from the sale of subsidiaries and assets were $414.2 million, $163.4 million and $72.2 million during the years ended December 31, 2022, 2021, and 2020, respectively.

• Proceeds from the issuance of common shares, net of issuance costs were $323.1 million during the year ended December 31, 2021.

There were no issuances of common shares in 2020 or 2019.

• Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $101.2 million, $19.7 million and $194.0 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Our net cash provided by operating activities has been less than the amount of distributions to our shareholders.

Our board of directors takes this and other factors into account as part of any decision to pay a dividend, and the timing and amount of any future dividend is subject to change at the discretion of our board of directors.

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

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

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

• Proceeds from the issuance of ordinary shares, net of issuance costs were $323.1 million during the year ended December 31, 2021.

There were no issuances of ordinary shares in 2022 or 2020.

• Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $101.2 million and $19.7 million during the years ended December 31, 2021 and 2020, respectively..

We are currently evaluating several potential transactions and related financings, which could occur within the next 12 months.

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

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

Historical Cash Flow

The following table presents our historical cash flow:

The following table presents our historical cash flow from both continuing and discontinued operations:

Year Ended December 31,

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Comparison of the years ended December 31, 2022 and 2021

Net cash used in operating activities increased $85.2 million, which primarily reflects (i) an increase in net loss of $27.0 million, primarily due to higher interest expense and operating expenses, partially offset by higher revenue and (ii) certain adjustments to reconcile net loss to cash used in operating activities including, gain on sale of assets, net of $49.3 million, security deposits and maintenance claims included in earnings of $32.7 million, depreciation and amortization of $29.4 million and asset impairment of $23.5 million.

Net cash used in investing activities increased $777.8 million primarily due to (i) the acquisition of Transtar, net of cash acquired of $627.1 million, (ii) an increase in acquisitions of leasing equipment of $251.0 million and (iii) an increase in investment in unconsolidated entities of $50.0 million, partially offset by (iv) a decrease in acquisitions of property, plant and equipment of $107.5 million and (v) an increase in proceeds from the sale of leasing equipment of $86.8 million.

Net cash provided by financing activities increased $1.2 billion primarily due to (i) an increase in proceeds from debt of $1.6 billion, (ii) an increase in proceeds from the issuance of common shares, net of $323.1 million and (iii) an increase in proceeds from the issuance of preferred shares, net of $81.5 million, partially offset by (iv) an increase in repayments of debt of $701.0 million.

Funds Available for Distribution (non-GAAP)

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

We believe FAD is a useful metric for investors and analysts for similar purposes.

FAD is not a financial measure in accordance with U.S.

GAAP measure most directly comparable to FAD is net cash provided by operating activities.

We define FAD as:

net cash provided by operating activities plus principal collections on finance leases, proceeds from sale of assets, and return of capital distributions from unconsolidated entities, less required payments on debt obligations and capital distributions to non-controlling interest, and excluding changes in working capital.

The following table sets forth a reconciliation of net cash provided by operating activities to FAD:

Year Ended December 31,

(in thousands) 2021 2020 2019

Net cash (used in) provided by operating activities

$ (22,044) $ 63,106 $ 151,043

Principal collections on finance leases

7,387 13,823 13,398

Proceeds from sale of assets

163,421 72,175 432,273

Return of capital distributions from unconsolidated entities

Required payments on debt obligations (1)

Capital distributions to non-controlling interest

Changes in working capital

93,422 88,314 4,726

Funds Available for Distribution (FAD)

$ 242,186 $ 237,418 $ 566,436

_____________________________________________________

(1) Required payments on debt obligations for the year ended December 31, 2021 exclude repayments of $650,000 for the Bridge Loan Agreement, $500,527 for the Revolving Credit Facility and $402,704 for the Senior Notes due 2022, and for the year ended December 31, 2020 exclude repayments of $306,206 for the Senior Notes due 2022, $270,000 for the Revolving Credit Facility, $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement, and for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit Facility and $18,572 for the CMQR Credit Agreement, all of which were voluntary refinancings as repayments of these amounts were not required at such time.

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

FAD has material limitations as a liquidity measure because such measure excludes items that are required elements of our net cash provided by operating activities as described below.

FAD should not be considered in isolation nor as a substitute for analysis of our results of operations under U.S.

GAAP, and it is not the only metric that should be considered in evaluating our ability to meet our stated dividend policy.

Specifically:

• FAD does not include equity capital called from our existing limited partners, proceeds from any debt issuance or future equity offering, historical cash and cash equivalents and expected investments in our operations.

• FAD does not give pro forma effect to prior acquisitions, certain of which cannot be quantified.

• While FAD reflects the cash inflows from sale of certain assets, FAD does not reflect the cash outflows to acquire assets as we rely on alternative sources of liquidity to fund such purchases.

• FAD does not reflect expenditures related to capital expenditures, acquisitions and other investments as we have multiple sources of liquidity and intend to fund these expenditures with future incurrences of indebtedness, additional capital contributions and/or future issuances of equity.

• FAD does not reflect any maintenance capital expenditures necessary to maintain the same level of cash generation from our capital investments.

• FAD does not reflect changes in working capital balances as management believes that changes in working capital are primarily driven by short term timing differences, which are not meaningful to our distribution decisions.

• Management has significant discretion to make distributions, and we are not bound by any contractual provision that requires us to use cash for distributions.

If such factors were included in FAD, there can be no assurance that the results would be consistent with our presentation of FAD.

Contractual Obligations and Cash Requirements

Net cash used in operating activities decreased $1.4 million, which primarily reflects certain adjustments to reconcile net loss to cash used in operating activities including increases in (i) asset impairment of $126.8 million, (ii) provision for credit losses of $35.0 million, (iii) equity in losses of unconsolidated entities of $34.2 million and (iv) loss on extinguishment of debt of $16.6 million partially offset by (v) an increase in gain on sale of assets of $92.6 million, (vi) an increase in our net loss of $81.3 million, and (vii) a decrease in net working capital of $35.3 million.

Net cash used in investing activities decreased $875.7 million primarily due to (i) a decrease in cash used in acquisitions of business, net of cash acquired, of $623.3 million, (ii) higher proceeds from the sale of leasing equipment of $250.0 million and (iii) a decrease in investment of unconsolidated entities of $47.3 million, partially offset by (iv) an increase in acquisition of leasing equipment of $65.7 million and (ii) an increase in acquisition of lease intangibles of $7.1 million.

Net cash provided by financing activities decreased $1.5 billion primarily due to (i) a decrease in proceeds from debt of $2.1 billion and (ii) a decrease in proceeds from issuance of ordinary shares, net of underwriter's discount of $323.1 million, partially offset by (iii) a one-time dividend from spin-off of FTAI Infrastructure, net of cash transferred of $500.6 million and (iv) a decrease in repayments of debt of $408.7 million.

Cash Flows of Discontinued Operations

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.

Cash used in operating activities from discontinued operations were $63.9 million, $61.7 million, and $46.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Cash used in investing activities from discontinued operations were $136.3 million, $828.7 million, and $252.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The absence of cash flows from discontinued operations is not expected to adversely affect our liquidity or our ability to fund capital expenditures or working capital needs.

Contractual Obligations

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

Debt Obligations — As of December 31, 2021, we had outstanding principal and interest payment obligations of $3.3 billion and $1.2 billion, respectively, of which, $100.5 million and $185.4 million, respectively, are due in the next twelve months.

Debt Obligations — As of December 31, 2022, we had outstanding principal and interest payment obligations of $2.2 billion and $620.8 million through the maturity date of the debt, respectively, of which only interest payments of $147.3 million are due in the next twelve months.

See Note 8 to the consolidated financial statements for additional information about our debt obligations.

Lease Obligations — As of December 31, 2022, we had outstanding operating and finance lease obligations of $2.9 million, of which, $0.8 million is due in the next twelve months.

Other Obligations — As of December 31, 2021, in connection with a pipeline capacity agreement at Jefferson Terminal, we had an obligation to pay a minimum of $10.2 million in marketing fees in the next twelve months.

Other Cash Requirements — In addition to our contractual obligations, we pay quarterly cash dividends on our common shares and preferred shares, which are subject to change at the discretion of our Board of Directors.

During 2021, we declared cash dividends of $118.0 million and $24.8 million on our common shares and preferred shares, respectively.

We expect to meet our future short-term liquidity requirements through cash on hand and net cash provided by our current operations.

Other Cash Requirements — In addition to our contractual obligations, we pay quarterly cash dividends on our ordinary shares and preferred shares, which are subject to change at the discretion of our Board of Directors.

During 2022, we declared cash dividends of $128.5 million and $27.2 million on our ordinary shares and preferred shares, respectively.

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

We expect that our operating subsidiaries will generate sufficient cash flow to cover operating expenses and the payment of principal and interest on our indebtedness as they become due.

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GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Actual results

could differ from those estimates.

Note 2 to the consolidated financial statements describes the significant accounting policies and methods used in the preparation of our consolidated financial statements.

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

Operating Leases — We lease equipment pursuant to operating leases.

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

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

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

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

Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance Deposits in our Consolidated Balance Sheets.

All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenues.

All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenue.

Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions.

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

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

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

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

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

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

Unearned income is recognized on an effective interest method over the lease term and is recorded as finance lease income.

The principal component of the lease payment is reflected as a reduction to the net investment in finance leases.

Revenue is not recognized when collection is not reasonably assured.

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

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

VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties.

A VIE is required to be consolidated by its primary beneficiary, and only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

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

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

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 also assign the related lease agreements to the customer as part of the sale of these assets.

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.

Maintenance Payments —Typically, under an operating lease of aircraft, the lessee is responsible for performing all maintenance and is generally required to make maintenance payments to us for heavy maintenance, overhaul or replacement of certain high-value components of the aircraft or engine.

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If a lessee is making monthly maintenance payments, we would typically be obligated to reimburse the lessee for costs they incur for heavy maintenance, overhaul or replacement of certain high-value components to the extent of maintenance payments received in respect of the specific maintenance event, usually shortly following the completion of the relevant work.

We record the portion of maintenance payments paid by the lessee that are expected to be reimbursed as maintenance deposit liabilities in the Consolidated Balance Sheets.

We record the portion of maintenance payments paid by the lessee that are expected to be reimbursed as maintenance deposits in the Consolidated Balance Sheets.

Reimbursements made to the lessee upon the receipt of evidence of qualifying maintenance work are recorded against the maintenance deposit liability.

In certain acquired leases, we or the lessee may be obligated to make a payment to the other party at lease termination based on redelivery conditions stipulated at the inception of the lease.

When the lessee is required to return the aircraft in an improved maintenance condition, we record a maintenance right asset, as a component of other assets, for the estimated value of the end-of-life maintenance payment at acquisition.

We recognize payments received as end-of-lease compensation adjustments, within lease revenue or as a reduction to the maintenance right asset, when payment is received or collectability is assured.

In the event we are required to make payments at the end of the lease for redelivery conditions, amounts are accrued as additional maintenance liability and expensed when we are obligated and can reasonably estimate such payment.

When the lessee is required to return the aircraft in an improved maintenance condition, we record a maintenance right asset, as a component of other assets in the Consolidated Balance sheets, for the estimated value of the end-of-life maintenance payment at acquisition.

We recognize payments received as end-of-lease compensation adjustments, within lease income or as a reduction to the maintenance right asset, when payment is received or collectability is assured.

Property, Plant and Equipment, Leasing Equipment and Depreciation —Property, plant and equipment and leasing equipment are stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over estimated useful lives, to estimated residual values which are summarized as follows:

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Sum of engine core salvage value plus the estimated fair value of life limited parts

Aviation tooling and equipment 3 - 6 years from date of purchase