What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-07-29 compared with 2022-04-29 · 385 added, 161 removed, 855 unchanged (39% of the section changed)

3 unchanged sentences

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

Notes March 31, 2022 December 31, 2021

Notes June 30, 2022 December 31, 2021

Cash and cash equivalents 2 $ 118,854 $ 188,078

19 unchanged sentences

2,000,000,000 shares authorized;

99,188,696 and 99,180,385 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)

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

Preferred shares ($ 0.01 par value per share;

200,000,000 shares authorized;

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

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

Additional paid in capital 1,332,968 1,411,940

9 unchanged sentences

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

Three Months Ended March 31,

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

Notes 2022 2021 2022 2021

11 unchanged sentences

Other income (expense)

Equity in (losses) earnings of unconsolidated entities 5 ( 24,013 ) 1,374

Equity in losses of unconsolidated entities 5 ( 13,823 ) ( 7,152 ) ( 37,836 ) ( 5,778 )

Gain on sale of assets, net 63,645 3,987 79,933 4,798

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

Interest income 590 454 1,246 739

Other (expense) income ( 459 ) 181

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

Loss before income taxes ( 226,173 ) ( 34,707 )

Provision for income taxes 12 3,486 169

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

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

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

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

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

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

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 8,480 ) ( 6,625 ) ( 15,946 ) ( 11,586 )

Dividends on preferred shares 6,791 6,551 13,582 11,176

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

Loss per share:

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

Income (loss) per share:

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

7 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Net loss $ ( 229,659 ) $ ( 34,876 )

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

2022 2021 2022 2021

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

Other comprehensive loss:

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

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

( 47,714 ) ( 32,832 ) ( 142,493 ) ( 22,878 )

3 unchanged sentences

________________________________________________________

(1) Net of deferred tax expense of $ 0 and $ 2,646 for the three months ended March 31, 2022 and 2021, respectively.

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

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2022

Three and Six Months Ended June 30, 2022

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

8 unchanged sentences

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

Three Months Ended March 31, 2021

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

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

Other comprehensive loss ( 47,714 ) ( 47,714 )

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

Acquisition of consolidated subsidiary 3,054 3,054

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

Issuance of common shares 235 235

Dividends declared - common shares ( 33,040 ) ( 33,040 )

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

Equity-based compensation 1,585 1,585

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Six Months Ended June 30, 2021

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

Equity - December 31, 2020 $ 856 $ 91 $ 1,130,106 $ ( 28,158 ) $ ( 26,237 ) $ 22,663 $ 1,099,321

9 unchanged sentences

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

Net loss ( 29,983 ) ( 6,625 ) ( 36,608 )

Other comprehensive loss ( 32,832 ) ( 32,832 )

Total comprehensive loss ( 29,983 ) ( 32,832 ) ( 6,625 ) ( 69,440 )

Issuance of common shares 305 305

Dividends declared - common shares ( 28,412 ) ( 28,412 )

Issuance of preferred shares 20 20

Dividends declared - preferred shares ( 6,551 ) ( 6,551 )

Equity-based compensation 1,439 1,439

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

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net loss $ ( 219,899 ) $ ( 71,484 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

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

Adjustments to reconcile net loss to net cash used in operating activities:

Equity in losses of unconsolidated entities 37,836 5,778

Gain on sale of assets, net ( 79,933 ) ( 4,798 )

Security deposits and maintenance claims included in earnings ( 30,208 ) ( 15,413 )

Loss on extinguishment of debt — 3,254

Equity-based compensation 2,294 2,553

12 unchanged sentences

Other liabilities ( 5,130 ) ( 3,637 )

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

Net cash used in operating activities ( 48,569 ) ( 63,924 )

Cash flows from investing activities:

1 unchanged sentence

Principal collections on finance leases 575 1,269

Acquisition of business, net of cash acquired ( 3,819 ) —

Acquisition of leasing equipment ( 320,766 ) ( 170,132 )

5 unchanged sentences

Proceeds for deposit on sale of aircraft and engine 8,245 1,425

Receipt of deposits for sale of aircraft and engine — 4,600

Return of purchase deposits — 1,010

4 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

5 unchanged sentences

Receipt of maintenance deposits 24,418 16,255

Capital contributions from non-controlling interests 1,187 —

Release of maintenance deposits ( 878 ) ( 12,071 )

4 unchanged sentences

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

Net (decrease) increase in cash and cash equivalents and restricted cash ( 80,394 ) 32,058

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

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

6 unchanged sentences

Non-cash change in equity method investment ( 142,493 ) ( 22,878 )

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

Issuance of common shares 399 455

34 unchanged sentences

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

Total VIE assets of DRP were $ 307.8 million and $ 316.5 million, and total VIE liabilities of DRP were $ 32.1 million and $ 32.6 million as of March 31, 2022 and December 31, 2021, respectively.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

5 unchanged sentences

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

We had Aviation inventory of $ 109.2 million and $ 100.3 million as of March 31, 2022 and December 31, 2021, respectively, which is included in Other assets in the Consolidated Balance Sheets.

We had Aviation inventory of $ 112.7 million and $ 100.3 million as of June 30, 2022 and December 31, 2021, respectively, which is included in Other assets in the Consolidated Balance Sheets.

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

Commodities are removed from inventory based on the average cost at the time of sale.

We had commodities inventory of $ 6.8 million and $ 6.8 million as of March 31, 2022 and December 31, 2021, respectively, which is included in Other assets in the Consolidated Balance Sheets.

We had commodities inventory of $ 5.9 million and $ 6.8 million as of June 30, 2022 and December 31, 2021, respectively, which is included in Other assets in the Consolidated Balance Sheets.

Deferred Financing Costs — Costs incurred in connection with obtaining long term financing are capitalized and amortized to interest expense over the term of the underlying loans.

Unamortized deferred financing costs of $ 69.6 million and $ 64.5 million as of March 31, 2022 and December 31, 2021, respectively, are recorded as a component of debt in the Consolidated Balance Sheets.

We also have unamortized deferred revolver fees related to our revolving debt of $ 2.8 million and $ 2.9 million as of March 31, 2022 and December 31, 2021, respectively, which are included in Other assets in the Consolidated Balance Sheets.

Amortization expense was $ 5.8 million an d $ 2.3 million for the three months ended March 31, 2022 and 2021, respectively, and is included in Interest expense in the Consolidated Statements of Operations.

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

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

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

Revenue Recognition

15 unchanged sentences

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

In April 2020, the FASB Staff issued a question-and-answer document (the “Q&A”) regarding accounting for lease concessions related to the effects of the COVID-19 pandemic.

The Q&A permits an entity to elect to forgo the evaluation of the enforceable rights and obligations of a lease contract required under ASC 842, Leases , as long as the total rent payments after the lease concessions are substantially the same, or less than, the total rent payments in the existing lease.

The impact of the COVID-19 related lease concessions granted above did not have a material impact on our results of operations during the three months ended March 31, 2022.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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.

7 unchanged sentences

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Infrastructure Revenues

25 unchanged sentences

See Commodity Derivatives below for additional information.

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

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

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

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

6 unchanged sentences

The finance lease ROU assets are subsequently amortized using the straight-line method.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Operating lease expenses are recognized on a straight-line basis over the lease term.

3 unchanged sentences

Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets, and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred .

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Concentration of Credit Risk — We are subject to concentrations of credit risk with respect to amounts due from customers on our finance leases and operating leases.

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

During the three months ended March 31, 2021, one customer in the Aviation Leasing segment accounted for approximately 11 % of total revenue.

During the three months ended March 31, 2022, one customer in the Transtar segment accounted for approximately 23 % of total revenue.

As of March 31, 2022, there were two customers in the Aviation Leasing segment that represented 19 % and 10 % of total Accounts receivable, net, respectively, and one customer in the Transtar segment that represented 14 % of total Accounts receivable, net.

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

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

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

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

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

We maintain cash and restricted cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions.

1 unchanged sentence

Allowance for Doubtful Accounts — We determine the allowance for doubtful accounts based on our assessment of the collectability of our receivables on a customer-by-customer basis.

The allowance for doubtful accounts was $ 56.4 million and $ 16.9 million as of March 31, 2022 and December 31, 2021, respectively.

There was a provision for credit losses of $ 47.9 million and a bad debt reversal of $ 0.5 million for the three months ended March 31, 2022 and 2021, respectively, which is included in Operating expenses in the Consolidated Statements of Operations.

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

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

Our allowance for doubtful accounts at March 31, 2022 includes all accounts receivable exposure to Russian and Ukrainian customers.

The allowance for doubtful accounts was $ 55.6 million and $ 16.9 million as of June 30, 2022 and December 31, 2021, respectively.

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

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

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

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

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

Comprehensive Income (Loss) — Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners.

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

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

Derivative Financial Instruments

11 unchanged sentences

The cash flow impact of these derivatives is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

Other Assets— Other assets is primarily comprised of lease incentives of $ 42.4 million and $ 46.9 million, purchase deposits of $ 3.9 million and $ 13.7 million, prepaid expenses of $ 17.2 million and $ 21.4 million, notes receivable of $ 54.4 million and $ 40.4 million, maintenance right assets of $ 5.1 million and $ 5.1 million, aircraft engine modules, spare parts and used material inventory of $ 109.2 million and $ 100.3 million, commodities inventory of $ 6.8 million and $ 6.8 million, and finance leases, net of $ 7.0 million and $ 7.6 million as of March 31, 2022 and December 31, 2021, respectively.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines and recognized approximately $ 7.5 million in amortization for the remaining lease incentives during the three months ended March 31, 2022.

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

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

For both the three months ended March 31, 2022 and 2021, the Board of Directors declared cash dividends of $ 0.33 per common share.

Additionally, in the quarter ended March 31, 2022, the Board of Directors declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 , $ 0.50 and $ 0.52 per share, respectively.

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

Additionally, in the quarter ended June 30, 2022, the Board of Directors declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 , $ 0.50 and $ 0.52 per share, respectively.

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

5 unchanged sentences

Leasing equipment, net is summarized as follows:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Leasing equipment $ 2,354,087 $ 2,356,219

1 unchanged sentence

Leasing equipment, net $ 1,844,095 $ 1,891,649

Economic sanctions and export controls against Russia and Russia’s aviation industry have been imposed due to its invasion of Ukraine during the three months ended March 31, 2022.

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

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

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

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

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

As a result, we recognized an impairment charge totaling $ 120.0 million, net of maintenance deposits, to write-off the entire carrying value of leasing equipment assets that we do not expect to recover from Ukraine and Russia.

The following table presents information related to our acquisitions and dispositions of aviation leasing equipment during the three months ended March 31, 2022:

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

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

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

Acquisitions:

1 unchanged sentence

Depreciation expense for leasing equipment is summarized as follows:

Three Months Ended March 31,

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

2022 2021 2022 2021

Depreciation expense for leasing equipment $ 39,444 $ 35,899 $ 80,923 $ 70,594

4 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

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

12 unchanged sentences

Property, plant and equipment, net $ 1,642,536 $ 1,555,857

During the three months ended March 31, 2022, we added property, plant and equipment of $ 46.4 million, which primarily consisted of assets terminal machinery and equipment placed in service or under development at Jefferson Terminal and Repauno.

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

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Depreciation expense $ 15,293 $ 10,583 $ 30,240 $ 19,535

1 unchanged sentence

Carrying Value

Investment Ownership Percentage March 31, 2022 December 31, 2021

Investment Ownership Percentage June 30, 2022 December 31, 2021

Advanced Engine Repair JV Equity method 25 % $ 20,752 $ 21,317

4 unchanged sentences

Equity method 50 % — —

FYX Trust Holdco LLC Equity 14 % 1,255 1,255

FYX Trust Holdco LLC Equity at

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

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

2 unchanged sentences

________________________________________________________

(1) The carrying value of $ 134.8 million and $ 17.5 million as of March 31, 2022 and December 31, 2021 is included in Other liabilities in the Consolidated Balance Sheets.

We did not recognize any other-than-temporary impairments for the three months ended March 31, 2022 and 2021.

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

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

2 unchanged sentences

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Advanced Engine Repair JV $ ( 212 ) $ ( 341 ) $ ( 566 ) $ ( 681 )

1 unchanged sentence

Intermodal Finance I, Ltd.

45 204 89 376

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

21 unchanged sentences

We account for our investment in GM-FTAI Holdco LLC as an equity method investment as we have significant influence through our ownership of Class A and Class B shares of GM-FTAI Holdco LLC.

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

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

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

Long Ridge Terminal LLC

2 unchanged sentences

Following the sale, we deconsolidated ORP, which held the assets of Long Ridge.

Advanced Engine Repair JV

In December 2016, we invested $ 15 million for a 25 % interest in an advanced engine repair joint venture.

We focus on developing new cost savings programs for engine repairs.

We exercise significant influence over this investment and account for this investment as an equity method investment.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Equity Investments

FYX Trust Holdco LLC

In July 2020, we invested $ 1.3 million for a 14 % interest in an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.

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

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Balance Sheet

9 unchanged sentences

Debt, net 606,174 604,261

Derivative liabilities 671,577 339,033

Other liabilities 2,979 2,246

4 unchanged sentences

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

Three Months Ended March 31,

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

Income Statement 2022 2021 2022 2021

Total revenue $ 24,411 $ 8,422

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

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

2 unchanged sentences

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

Other (expense) income ( 29,234 ) 2,999

Net (loss) income $ ( 42,675 ) $ 3,077

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

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

Advanced Engine Repair JV

In December 2016, we invested $ 15 million for a 25 % interest in an advanced engine repair joint venture.

We focus on developing new cost savings programs for engine repairs.

We exercise significant influence over this investment and account for this investment as an equity method investment.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Equity Investments

FYX Trust Holdco LLC

In July 2020, we invested $ 1.3 million for a 14 % interest in an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.

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

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

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

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

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

INTANGIBLE ASSETS AND LIABILITIES, NET

Intangible assets and liabilities, net are summarized as follows:

March 31, 2022

June 30, 2022

Aviation Leasing Jefferson Terminal Transtar Total

25 unchanged sentences

Acquired unfavorable lease intangibles, net $ 8,727 $ — $ — $ 8,727

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

Amortization of intangible assets and liabilities is as follows:

Classification in Consolidated Statements of Operations Three Months Ended March 31,

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

2022 2021 2022 2021

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

1 unchanged sentence

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

As of March 31, 2022, estimated net annual amortization of intangibles is as follows:

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

Remainder of 2022 $ 9,508

5 unchanged sentences

Our debt, net is summarized as follows:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

34 unchanged sentences

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

(3) Includes an unamortized discount of $ 3,302 and $ 3,509 at March 31, 2022 and December 31, 2021, respectively, and an unamortized premium of $ 5,377 and $ 5,707 at March 31, 2022 and December 31, 2021, respectively.

(4) Includes an unamortized premium of $ 2,336 and $ 2,416 at March 31, 2022 and December 31, 2021, respectively.

We were in compliance with all debt covenants as of March 31, 2022.

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

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

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

FAIR VALUE MEASUREMENTS

5 unchanged sentences

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

• Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts.

• Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

The following tables set forth our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021, by level within the fair value hierarchy.

The following tables set forth our financial assets measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, by level within the fair value hierarchy.

Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of

March 31, 2022 March 31, 2022

June 30, 2022 June 30, 2022

Total Level 1 Level 2 Level 3 Valuation Technique

1 unchanged sentence

Restricted cash 177,951 177,951 — — Market

Derivative assets 748 — 748 — Income

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

Derivative liabilities $ 766 $ — $ 766 $ — Income

Total liabilities $ 766 $ — $ 766 $ —

Fair Value as of Fair Value Measurements Using Fair Value Hierarchy as of

7 unchanged sentences

These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy.

The fair value of our commodity derivative assets and liabilities are classified as Level 2 measurements are estimated by applying the income and market approaches, based on quotes of observable market transactions, and adjusted for estimated differential factors based on quality and delivery locations.

The fair value of our commodity derivative assets are classified as Level 2 measurements are estimated by applying the income and market approaches, based on quotes of observable market transactions, and adjusted for estimated differential factors based on quality and delivery locations.

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

3 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Series 2020 A Bonds (1)

12 unchanged sentences

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

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

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

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

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

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

Fair value measurements for assets subject to impairment tests are based on an income approach which uses Level 3 inputs, which include our assumptions as to future cash flows from operation of the underlying businesses and the leasing and eventual sale of assets.

2 unchanged sentences

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

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

16 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

12 unchanged sentences

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

Presented below are the contracted minimum future annual revenues to be received under existing operating leases across several market sectors as of March 31, 2022:

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Equipment leasing revenues

Lease income $ 71,043 $ — $ — $ — $ 7,709 $ 78,752

Maintenance revenue 76,664 — — — — 76,664

Finance lease income 213 — — — — 213

Other revenue 46,036 — — — 2,090 48,126

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

Infrastructure revenues

Lease income — 666 — 1,041 — 1,707

Rail revenues — — 86 71,089 — 71,175

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

Other revenue — — ( 535 ) — 12,658 12,123

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Equipment leasing revenues

Lease income $ 79,997 $ — $ — $ — $ 3,132 $ 83,129

Maintenance revenue 47,511 — — — — 47,511

Finance lease income 846 — — — — 846

Other revenue 6,190 — — — 502 6,692

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

Infrastructure revenues

Lease income — 862 — — — 862

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

Crude marketing revenues — — — — — —

Other revenue — — 10,283 — 3,200 13,483

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

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

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

Operating Leases

4 unchanged sentences

In 2015, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to grant equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

As of March 31, 2022, the Incentive Plan provides for the issuance of up to 29.8 million shares.

As of June 30, 2022, the Incentive Plan provides for the issuance of up to 29.8 million shares.

We account for equity-based compensation expense in accordance with ASC 718 Compensation-Stock Compensation and is reported within operating expenses and general and administrative in the Consolidated Statements of Operations.

The Consolidated Statements of Operations includes the following expense related to our stock-based compensation arrangements:

Three Months Ended March 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

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

2022 2021 2022 2021

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

1 unchanged sentence

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

During the three months ended March 31, 2022, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 336,862 of its options to certain of the Manager’s employees.

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

These awards are subject to continued employment, and the compensation expense is recognized ratably over the vesting periods.

The fair value of these awards was based on the fair value of the operating subsidiary on the grant date, which was estimated using a discounted cash flow analysis that requires the application of discount factors and terminal multiples to projected cash flows.

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

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

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

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

RETIREMENT BENEFIT PLANS

1 unchanged sentence

Defined Benefit Pensions

Our unfunded pension plan is a tax qualified plan.

Our partially funded pension plan is a tax qualified plan.

Our pension plan covers certain eligible Transtar employees.

5 unchanged sentences

The remaining healthcare and life insurance plans are non-contributory.

The following table summarizes our retirement benefit plan costs for the three months ended March 31, 2022.

The following table summarizes our retirement benefit plan costs for the three and six months ended June 30, 2022.

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

Pension Benefits Postretirement Benefits

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

Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits

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

1 unchanged sentence

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

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

Three Months Ended March 31,

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

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

2022 2021 2022 2021

Federal $ 36 $ 37 $ 413 $ 56

1 unchanged sentence

Foreign ( 224 ) ( 64 ) 69 ( 56 )

Total current provision 1,098 98

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

Federal 3,346 ( 1,622 ) 4,967 ( 1,467 )

1 unchanged sentence

Foreign ( 9 ) ( 81 ) 303 ( 165 )

Total deferred provision 2,388 71

Provision for income taxes $ 3,486 $ 169

Total deferred provision (benefit) 3,812 ( 1,703 ) 6,200 ( 1,632 )

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

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

5 unchanged sentences

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

As of and for the three months ended March 31, 2022, we had not established a liability for uncertain tax positions as no such positions existed.

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

In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S.

1 unchanged sentence

Generally, we are not subject to examination by taxing authorities for tax years prior to 2018.

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of March 31, 2022.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date of June 30, 2022.

MANAGEMENT AGREEMENT AND AFFILIATE TRANSACTIONS

7 unchanged sentences

Pre-incentive allocation net income does not include any Income Incentive Allocation or Capital Gains Incentive Allocation (described below) paid to the Master GP during the relevant quarter.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

One of our subsidiaries allocates and distributes to the Master GP an Income Incentive Allocation with respect to its pre-incentive allocation net income in each calendar quarter as follows:

5 unchanged sentences

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

Three Months Ended March 31,

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

2022 2021 2022 2021

Management fees $ 3,062 $ 4,113 $ 7,226 $ 8,103

11 unchanged sentences

The following table summarizes our reimbursements to the Manager:

Three Months Ended March 31,

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

2022 2021 2022 2021

Classification in the Consolidated Statements of Operations:

9 unchanged sentences

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Accrued management fees $ 929 $ 1,495

Other payables 1,063 2,326

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

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

Other Affiliate Transactions

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

The carrying amount of this non-controlling interest at March 31, 2022 and December 31, 2021 was $( 16.2 ) million and $( 9.1 ) million, respectively.

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

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

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

Three Months Ended March 31,

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

2022 2021 2022 2021

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

5 unchanged sentences

In July 2020, we purchased a 14 % interest in FYX from an affiliate of our Manager, which retained a non-controlling interest in FYX subsequent to the transaction.

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

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

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

See Note 5 for additional information related to FYX.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

22 unchanged sentences

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

For the Three Months Ended March 31, 2022

Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

17 unchanged sentences

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

(Loss) income before income taxes ( 127,675 ) ( 15,986 ) ( 32,074 ) 9,622 ( 60,060 ) ( 226,173 )

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

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

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

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 8,135 ) ( 320 ) — ( 25 ) ( 8,480 )

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

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Adjusted EBITDA $ 158,345 $ 4,158 $ 3,675 $ 18,826 $ ( 19,677 ) $ 165,327

Non-controlling share of Adjusted EBITDA 3,716

Equity in losses of unconsolidated entities ( 13,823 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 6,977 )

Interest expense ( 54,373 )

Depreciation and amortization expense ( 68,427 )

Incentive allocations —

Asset impairment charges ( 886 )

Changes in fair value of non-hedge derivative instruments 1,514

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

Acquisition and transaction expenses ( 9,626 )

Equity-based compensation expense ( 1,585 )

Provision for income taxes ( 3,411 )

Net income attributable to shareholders $ 11,449

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

Three Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

Asia $ 20,953 $ — $ — $ — $ 3,133 $ 24,086

Europe 32,060 — — — — 32,060

North America 40,902 14,528 1,640 38,060 11,640 106,770

South America 15,016 — — — — 15,016

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2022

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

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

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

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

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

Operating expenses 92,428 27,384 8,166 38,889 26,053 192,920

General and administrative — — — — 10,695 10,695

Acquisition and transaction expenses 1,949 — — 355 13,346 15,650

Management fees and incentive allocation to affiliate — — — — 7,226 7,226

Depreciation and amortization 76,657 19,439 4,745 9,455 4,627 114,923

Asset impairment 123,676 — — — — 123,676

Interest expense — 12,237 629 75 92,030 104,971

Total expenses 294,710 59,060 13,540 48,774 153,977 570,061

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 233 — ( 36,520 ) — ( 1,549 ) ( 37,836 )

Gain on sale of assets, net 79,933 — — — — 79,933

Interest income 203 — — — 1,043 1,246

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

Total other income (expense) 80,369 ( 1,390 ) ( 36,520 ) ( 665 ) ( 506 ) 41,288

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

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

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

6 unchanged sentences

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

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

15 unchanged sentences

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

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

Equipment Leasing Infrastructure

9 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended March 31, 2021

Three Months Ended March 31, 2021

For the Three Months Ended June 30, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

13 unchanged sentences

Gain on sale of assets, net 3,971 — 16 — — 3,987

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

Interest income 357 — 91 — 6 454

Other income — 181 — — — 181

Total other income 738 181 1,542 — 190 2,651

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

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

Income (loss) before income taxes 38,628 ( 13,664 ) ( 10,903 ) — ( 52,309 ) ( 38,248 )

1 unchanged sentence

Net income (loss) 38,632 ( 13,723 ) ( 9,282 ) — ( 52,235 ) ( 36,608 )

Net (loss) income attributable to non-controlling interests in consolidated subsidiaries — ( 5,016 ) 55 — — ( 4,961 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 6,538 ) ( 87 ) — — ( 6,625 )

Dividends on preferred shares — — — — 6,551 6,551

4 unchanged sentences

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

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

12 unchanged sentences

Equity-based compensation expense ( 1,439 )

Provision for income taxes ( 169 )

Benefit from income taxes 1,640

Net loss attributable to shareholders $ ( 36,534 )

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

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Africa $ 235 $ — $ — $ — $ — $ 235

Asia 32,479 — — — 3,128 35,607

6 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2021

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

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

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

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

Operating expenses 13,395 23,498 6,930 — 12,357 56,180

General and administrative — — — — 7,907 7,907

Acquisition and transaction expenses 2,032 — — — 4,010 6,042

Management fees and incentive allocation to affiliate — — — — 8,103 8,103

Depreciation and amortization 66,295 17,033 4,427 — 4,151 91,906

Asset impairment 2,189 — — — — 2,189

Interest expense — 4,416 574 — 65,504 70,494

Total expenses 83,911 44,947 11,931 — 102,032 242,821

Other income (expense)

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

Gain on sale of assets, net 4,782 — 16 — — 4,798

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

Interest income 624 — 91 — 24 739

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

Total other income (expense) 4,725 ( 705 ) ( 5,366 ) — ( 2,852 ) ( 4,198 )

Income (loss) before income taxes 55,358 ( 23,406 ) ( 6,857 ) — ( 98,050 ) ( 72,955 )

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

Net income (loss) 55,404 ( 23,522 ) ( 5,390 ) — ( 97,976 ) ( 71,484 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — ( 11,554 ) ( 32 ) — — ( 11,586 )

Dividends on preferred shares — — — — 11,176 11,176

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Adjusted EBITDA $ 140,866 $ 6,383 $ 508 $ — $ ( 32,649 ) $ 115,108

Non-controlling share of Adjusted EBITDA 5,286

Equity in losses of unconsolidated entities ( 5,778 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 2,391 )

Interest expense ( 70,494 )

Depreciation and amortization expense ( 106,811 )

Incentive allocations —

Asset impairment charges ( 2,189 )

Changes in fair value of non-hedge derivative instruments 6,573

Losses on the modification or extinguishment of debt and capital lease obligations ( 3,254 )

Acquisition and transaction expenses ( 6,042 )

Equity-based compensation expense ( 2,553 )

Benefit from income taxes 1,471

Net loss attributable to shareholders $ ( 71,074 )

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

Six Months Ended June 30, 2021

Equipment Leasing Infrastructure

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

Africa $ 235 $ — $ — $ — $ — $ 235

Asia 57,503 — — — 3,634 61,137

Europe 53,401 — — — — 53,401

North America 20,950 22,246 10,440 — 3,200 56,836

South America 2,455 — — — — 2,455

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

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Balance Sheet and Location of Long-Lived Assets

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

March 31, 2022

June 30, 2022

Equipment Leasing Infrastructure

6 unchanged sentences

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

March 31, 2022

June 30, 2022

Equipment Leasing Infrastructure

16 unchanged sentences

Total liabilities and equity $ 2,098,979 $ 1,284,432 $ 316,899 $ 762,294 $ 401,250 $ 4,863,854

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

December 31, 2021

7 unchanged sentences

Total $ 1,718,588 $ 786,566 $ 280,210 $ 481,826 $ 180,316 $ 3,447,506

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

EARNINGS PER SHARE AND EQUITY

Basic earnings per common share (“EPS”) is calculated by dividing net loss attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities.

Basic earnings per common share (“EPS”) is calculated by dividing net income (loss) attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities.

Diluted EPS is calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding, plus any participating securities and potentially dilutive securities.

1 unchanged sentence

The calculation of basic and diluted EPS is presented below:

Three Months Ended March 31,

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

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

Net loss $ ( 229,659 ) $ ( 34,876 )

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

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 8,480 ) ( 6,625 ) ( 15,946 ) ( 11,586 )

Dividends on preferred shares 6,791 6,551 13,582 11,176

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

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

Weighted Average Common Shares Outstanding - Basic (1)

2 unchanged sentences

99,805,455 86,030,652 99,367,597 86,029,305

Loss per share:

Income (loss) per share:

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

1 unchanged sentence

________________________________________________________

(1) Three months ended March 31, 2022 and 2021 include participating securities which can be converted into a fixed amount of our shares.

For the three months ended March 31, 2022 and 2021, 771,689 and 803,800 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the three months ended March 31, 2022, we issued 8,311 common shares to certain directors as compensation.

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

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

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

COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

The $ 5.0 million payment was included in the cost of the asset acquisition.

Jefferson entered into a two-year pipeline capacity agreement for a recently completed pipeline.

Under the agreement, which took effect in the second quarter of 2021, Jefferson is obligated to pay fixed marketing fees over the two-year agreement, which totals a minimum of $ 9.2 million for the next twelve months.

SUBSEQUENT EVENTS

On July 26, 2022, our Board of Directors declared a cash dividend on our common shares and eligible participating securities of $ 0.33 per share for the quarter ended June 30, 2022, payable on August 29, 2022 to the holders of record on August 15, 2022.

Additionally, on July 26, 2022, our Board of Directors also declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 , $ 0.50 and $ 0.52 per share, respectively, payable on September 15, 2022 to the holders of record on September 1, 2022.

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Jefferson entered into a two-year pipeline capacity agreement for a recently completed pipeline.

Under th e agreement, which took effect in the second quarter of 2021, Jefferson is obligated to pay fixed marketing fees over the two-year agreement, which totals a minimum of $ 10.2 million per year.

SUBSEQUENT EVENTS

Transfer of Listing

In April 2022, the Company voluntarily transferred the listing of its Class A common shares, par value $ 0.01 per share (“Class A Common Shares”), its 8.25 % Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (the “Series A Preferred Shares”), its 8.00 % Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (the “Series B Preferred Shares”) and its 8.25 % Fixed Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (the “Series C Preferred Shares” and, together with the Series A Preferred Shares and Series B Preferred Shares, the “Preferred Shares”) from the New York Stock Exchange to The Nasdaq Stock Market LLC (“Nasdaq”).

The Company’s Class A Common Shares and the Preferred Shares commenced trading on the Nasdaq on April 26, 2022.

The Company’s Class A Common Shares, the Series A Preferred Shares, Series B Preferred Shares and the Series C Preferred Shares trade on Nasdaq under the ticker symbols “FTAI,” “FTAIP,” “FTAIO” and “FTAIN,” respectively.

On April 28, 2022, our Board of Directors declared a cash dividend on our common shares and eligible participating securities of $ 0.33 per share for the quarter ended March 31, 2022, payable on May 24, 2022 to the holders of record on May 13, 2022.

Additionally, on April 28, 2022, our Board of Directors also declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares of $ 0.52 , $ 0.50 and $ 0.52 per share, respectively, payable on June 15, 2022 to the holders of record on June 1, 2022.

Spin-off of Infrastructure Business

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

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

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

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

What changed 10-Q

Item 1. Financial Statements