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What changed in FTAI Infrastructure Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of FTAI Infrastructure Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+257 added−246 removedSource: 10-K (2024-03-27) vs 10-K (2023-03-09)

Top changes in FTAI Infrastructure Inc.'s 2023 10-K

257 paragraphs added · 246 removed · 196 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

40 edited+8 added−13 removed87 unchanged
Biggest changeThe following primarily comprise our Sustainability and Energy Transition business: Aleon and Gladieux In September 2021, FTAI acquired 1% of the Class A shares and 50% of the Class B shares of GM-FTAI Holdco LLC for $52.5 million. GM-FTAI Holdco LLC owns a 100% interest in Gladieux and Aleon.
Biggest changeFollowing the sale, we no longer have a controlling interest in Long Ridge WV, but we still maintain significant influence through our retained interest and, therefore, account for this investment in accordance with the equity method as of and subsequent to the November 2023 sale. 10 The following primarily comprise our Sustainability and Energy Transition business: Aleon and Gladieux In September 2021, FTAI acquired 1% of the Class A shares and 50% of the Class B shares of GM-FTAI Holdco LLC for $52.5 million.
Customers 11 Our customers consist of global industrial and energy companies, including corporations that refine crude oil and trade petroleum products, manufacturers and local electricity markets and traders. We maintain ongoing relationships and discussions with our customers and seek to have consistent dialogue.
Customers Our customers consist of global industrial and energy companies, including corporations that refine crude oil and trade petroleum products, manufacturers and local electricity markets and traders. We maintain ongoing relationships and discussions with our 11 customers and seek to have consistent dialogue.
Due to an internal reorganization of GM-FTAI Holdco LLC in June 2022, we now own a 27.4% indirect interest in each of Gladieux and Aleon. Clean Planet USA On November 19, 2021, FTAI and UK green-tech company Clean Planet Energy announced the formation of a joint venture partnership to develop Clean Planet USA ecoPlants in key North American markets.
Due to an internal reorganization of GM-FTAI Holdco LLC in June 2022, we now own a 27.4% indirect equity interest in each of Gladieux and Aleon. Clean Planet USA On November 19, 2021, FTAI and UK green-tech company Clean Planet Energy announced the formation of a joint venture partnership to develop Clean Planet USA ecoPlants in key North American markets.
In particular, Long Ridge has an agreement with a company to develop a biodegradable plastics plant on site which would use on- 10 site power and produce environmentally-friendly plastic products. Long Ridge also continues to explore the possibility for on-site data center development which would utilize Long Ridge’s on-site power capabilities.
In particular, Long Ridge has an agreement with a company to develop a biodegradable plastics plant on site which would use on-site power and produce environmentally-friendly plastic products. Long Ridge also continues to explore the possibility for on-site data center development which would utilize Long Ridge’s on-site power capabilities.
Our Manager has significant prior experience in all of our target sectors, as well as a network of industry relationships, that we believe positions us well to make successful acquisitions and to actively manage and improve operations and cash flows of our existing and newly-acquired assets.
Our Manager has significant prior experience in all of our target sectors, as well as a network of industry relationships, that we believe positions us well to make successful acquisitions and to actively manage and improve operations and cash flows of our 7 existing and newly-acquired assets.
As the production of North American heavy crude grows in excess of existing takeaway 9 capacity, demand for crude-by-rail to the Gulf Coast is expected to increase. Refined products opportunities for storage and logistics are expected to be positively impacted by demand growth in export markets.
As the production of North American heavy crude grows in excess of existing takeaway capacity, demand for crude-by-rail to the Gulf Coast is expected to increase. Refined products opportunities for storage and logistics are expected to be positively impacted by demand growth in export markets.
To meet such increased demand, Jefferson Terminal operates a refined products system that receives three grades of products by direct pipeline connection from a large area refiner, as well as inland tank barge via the barge dock, stores the cargo in six tanks with a combined capacity of approximately 0.7 million barrels, and operates a 20 spot rail car loading system with the capacity to load approximately 70,000 barrels per day.
To meet such increased demand, Jefferson Terminal operates a refined products system that receives three grades of products by direct pipeline connection from a large area refiner, as well as an inland tank barge via the barge dock, which stores the cargo in six tanks with a combined capacity of approximately 0.7 million barrels, and operates a 20 spot rail car loading system with the capacity to load approximately 70,000 barrels per day.
We have invested substantial time and resources into building our team, and our human capital management objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
We have invested substantial time and resources into building our team, and our human capital 12 management objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
Gladieux specializes in recycling spent catalyst produced in the petroleum refining industry. Aleon’s initial battery recycling plant is planned to be build-out at the Freeport site owned by Gladieux, leveraging their existing assets and infrastructure. At full ramp, the plant is expected to process approximately 110,000 tons of spent lithium-ion batteries each year. • Hydrogen-fueled power plant .
Gladieux specializes in recycling spent catalyst produced in the petroleum refining industry. Aleon’s initial battery recycling plant is planned to be build-out at the Freeport site owned by Gladieux, leveraging its existing assets and infrastructure. At full ramp, the plant is expected to process approximately 110,000 tons of spent lithium-ion batteries each year. • Hydrogen-fueled power plant .
In May 2022, we purchased an additional 51% interest in FYX from an unrelated third party for cash consideration of $4.6 million, which resulted in our ownership of a majority stake in the entity and consolidation of the entity, and subsequently purchased an additional approximate 1% interest in FYX for cash consideration of $0.1 million.
In May 2022, FTAI purchased an additional 51% interest in FYX from an unrelated third party for cash consideration of $4.6 million, which resulted in our ownership of a majority stake in the entity and consolidation of the entity, and subsequently purchased an additional approximate 1% interest in FYX for cash consideration of $0.1 million.
In collaboration with New Fortress Energy and GE, Long Ridge has test-blended carbon-free hydrogen as a fuel and intends to continue testing to increase that blend over time by blending hydrogen in the gas stream and transitioning the plant to be capable of burning 100% green hydrogen over the next decade.
In collaboration with New Fortress Energy and General Electric, Long Ridge has test-blended carbon-free hydrogen as a fuel and intends to continue testing to increase that blend over time by blending hydrogen in the gas stream and transitioning the plant to be capable of burning 100% green hydrogen over the next decade.
Management Agreement We are externally managed by our Manager, an affiliate of Fortress, which has a dedicated team of experienced professionals focused on the acquisition of infrastructure assets since 2002. On December 27, 2017, SoftBank Group Corp. (“SoftBank”) completed its acquisition of Fortress (the “SoftBank Merger”).
Management Agreement We are externally managed by our Manager, an affiliate of Fortress, which has a dedicated team of experienced professionals focused on the acquisition of infrastructure assets since 2002. On December 27, 2017, SoftBank completed its acquisition of Fortress (the “SoftBank Merger”).
For initial testing of hydrogen blending, Long Ridge has access to nearby industrial byproduct hydrogen. For the production of green hydrogen with electrolysis, Long Ridge has access to water from the Ohio River. Long Ridge also continues to explore possibilities for on-site development of projects using on-site power generation.
For initial testing of hydrogen blending, Long Ridge has access to nearby industrial byproduct hydrogen. For the production of green hydrogen through electrolysis, Long Ridge has direct access to water from the Ohio River. Long Ridge also continues to explore possibilities for development of projects using on-site power generation.
In addition, Repauno is expanding its storage and transloading capacity, and pursuing accretive sustainable energy projects such as the development of a recycling facility on-site (see discussion of Clean Planet USA below).
In addition, Repauno is expanding its storage and transloading capacity, and pursuing accretive sustainable energy projects such as the export of green hydrogen and the development of a recycling facility on-site (see discussion of Clean Planet USA below).
As of and for the year ended December 31, 2022, our largest customer accounted for 51% of our revenue and 31% of total accounts receivable, net. We derive a significant percentage of our revenue within specific sectors from a limited number of customers.
As of and for the year ended December 31, 2023, our largest customer accounted for 51% of our revenue and 30% of total accounts receivable, net. We derive a significant percentage of our revenue within specific sectors from a limited number of customers.
In April 2022, Long Ridge became the first large scale gas power plant in the U.S. to blend hydrogen as a fuel. This is also the first GE-H class turbine in the world to achieve this milestone. Long Ridge has continued with plans for plant integration for hydrogen blending and to ensure safe and reliable industrial practices.
In April 2022, Long Ridge became the first large scale gas power plant in the U.S. to blend hydrogen as a fuel. This is also the first GE-H class turbine in the world to achieve this milestone. Long Ridge has continued to evaluate opportunities for plant integration of hydrogen blending and to ensure safe and reliable industrial practices.
Corporate and other sources accounted for the remaining 18% of our total revenue. We target sectors that we believe enjoy strong long-term growth potential and proactively seek investment opportunities within those sectors that we believe will generate strong risk-adjusted returns.
Corporate and other sources accounted for the remaining 21% of our total revenue. We target sectors that we believe value strong long-term growth potential and proactively seek investment opportunities within those sectors that we believe will generate strong risk-adjusted returns.
In October 2020, Long Ridge, located in Hannibal, Ohio, announced its plan to transition its 485 MW combined-cycle power plant to run on carbon-free hydrogen, in collaboration with New Fortress Energy, GE, Kiewit Power Constructors Co., Black & Veatch and NAES Corporation.
In October 2020, Long Ridge, located in Hannibal, Ohio, announced its plan to transition its 485 megawatt combined-cycle power plant to run on carbon-free hydrogen, in collaboration with New Fortress Energy, General Electric, Kiewit Power Constructors Co., Black & Veatch and NAES Corporation.
Our Sustainability and Energy Transition business focuses on investments in companies and assets that utilize green technology, produce sustainable fuels and products or enable customers to reduce their carbon footprint. For the year ended December 31, 2022, our Railroad business accounted for 57% of our total revenue and our Ports and Terminals business accounted for 25% of our total revenue.
Our Sustainability and Energy Transition business focuses on investments in companies and assets that utilize green technology, produce sustainable fuels and products or enable customers to reduce their carbon footprint. For the year ended December 31, 2023, our Railroad business accounted for 53% of our total revenue and our Ports and Terminals business accounted for 26% of our total revenue.
Fortress has funds invested in transportation-related infrastructure with approximately $3.8 billion in investments in aggregate as of December 31, 2022 and $3.5 billion as of December 31, 2021.
Fortress has funds invested in transportation-related infrastructure with approximately $3.9 billion in investments in aggregate as of December 31, 2023 and $3.8 billion as of December 31, 2022.
This system may be further expanded to meet additional market demand. Recent expansion projects completed include the construction of 10 new tanks and related infrastructure, consisting of approximately 1.9 million barrels of refined products storage to support international marine exports. Additionally, a second ship dock is currently in development and expected to be in service during 2023.
This system may be further expanded to meet additional market demand. 9 Recent expansion projects completed include the construction of a second ship dock in 2023, as well as 10 new tanks and related infrastructure, consisting of approximately 1.9 million barrels of refined products storage to support international marine exports.
We were formed on December 13, 2021 as FTAI Infrastructure LLC, a Delaware limited liability company and subsidiary of Fortress Transportation and Infrastructure Investors LLC (“Former Parent”).
We were formed on December 13, 2021 as FTAI Infrastructure LLC, a Delaware limited liability company and subsidiary of FTAI Aviation Ltd. (previously Fortress Transportation and Infrastructure Investors LLC; “FTAI” or “Former Parent”).
As of December 31, 2022, we have approximately 690 employees at our subsidiaries across our business segments, approximately 340 of whom are party to 12 collective bargaining agreements. We consider our relationship with our employees to be good and we focus heavily on employee engagement.
As of December 31, 2023, we have approximately 700 employees at our subsidiaries across our business segments, approximately 360 of whom are party to collective bargaining agreements. We consider our relationship with our employees to be good and we focus heavily on employee engagement.
Shortly after the end of 2020, DRP completed its new state-of-the-art rail-to-ship transloading system. This allows DRP to load Liquified Petroleum Gas (“LPG”) marine vessels from its new wharf, including 16 marine vessels loaded in 2022.
Shortly after the end of 2020, DRP completed its new state-of-the-art rail-to-ship transloading system. This allows DRP to load Liquified Petroleum Gas (“LPG”) marine vessels from its new wharf, including 13 fully refrigerated LPG marine vessels loaded in 2023.
As of December 31, 2022, Transtar has approximately 400 employees, of which approximately 300 are subject to collective bargaining agreements. Railway Services Agreement On July 28, 2021, in connection with the closing of the Transtar Acquisition, Transtar, certain Transtar subsidiaries (together with Transtar, the “Transtar Parties”), and U.S. Steel entered into a railway services agreement (the “Railway Services Agreement”).
As of December 31, 2023, Transtar has approximately 440 employees, of which approximately 360 are subject to collective bargaining agreements. Railway Services Agreement On July 28, 2021, in connection with the closing of the Transtar Acquisition, Transtar, certain Transtar subsidiaries (together with Transtar, the “Transtar Parties”), and USS entered into a railway services agreement (the “Railway Services Agreement”).
In addition to the Jefferson Terminal, Jefferson Terminal owns several other energy and infrastructure-related assets, including 299 tank railcars for the purpose of leasing to third parties; pipeline rights-of-way; an approximately 50-acre property with inter-coastal waterway access all of which can be developed as well as an approximately 605-acre industrial property in Nederland, Texas.
In addition to the Jefferson Terminal and Jefferson Terminal South, Jefferson Terminal owns several other energy and infrastructure-related assets, including 299 tank railcars for the purpose of leasing to third parties; pipeline rights-of-way; as well as an approximately 50-acre property with inter-coastal waterway access.
In connection with the spin-off of the infrastructure business (“FTAI Infrastructure”), as described below, FTAI Infrastructure LLC converted into FTAI Infrastructure Inc., a Delaware corporation, which holds all of the material assets and investments that comprised FTAI's former infrastructure business.
In connection with the spin-off, FTAI Infrastructure LLC converted into FTAI Infrastructure Inc., a Delaware corporation, and acquired all of the material assets and investments that comprised FTAI's infrastructure business (“FTAI Infrastructure”).
Jefferson Terminal is located on approximately 250 acres of land at the Port of Beaumont, Texas, a deep-water port near the mouth of the Neches River (the “Port”). Today, Jefferson Terminal leases 185 developed or developable acres from the Port.
The following primarily comprise our Ports and Terminals business: Jefferson Terminal Jefferson Terminal is located on approximately 250 acres of land at the Port of Beaumont, Texas, a deep-water port near the mouth of the Neches River (the “Port”). Today, Jefferson Terminal leases 185 developed or developable acres from the Port.
Our Ports and Terminals business, consisting of our Jefferson Terminal and Repauno segments, develops or acquires industrial properties in strategic locations that store and handle for third parties a variety of energy products including crude oil, refined products and clean fuels.
Our Railroad business primarily invests in and operates short line and regional railroads in North America. Our Ports and Terminals business, consisting of our Jefferson Terminal and Repauno segments, develops or acquires industrial properties in strategic locations that store and handle for third parties a variety of energy products including crude oil, refined products and clean fuels.
FYX is currently recorded as part of the Corporate and Other segment. Asset Management Our Manager actively manages and monitors our portfolios of assets on an ongoing basis, and in some cases engages third parties to assist with the management of those assets. Our Manager frequently reviews the status of all of our assets.
Asset Management Our Manager actively manages and monitors our portfolios of assets on an ongoing basis, and in some cases engages third parties to assist with the management of those assets. Our Manager frequently reviews the status of all of our assets.
Gladieux specializes in recycling spent catalyst produced in the petroleum refining industry. Aleon plans to develop a lithium-ion battery recycling business across the United States. Each planned location will collect, discharge and disassemble lithium-ion batteries to extract various metals in high-purity form for resale into the lithium-ion battery production market. Aleon and Gladieux are governed by separate boards of directors.
Each planned location will collect, discharge and disassemble lithium-ion batteries to extract various metals in high-purity form for resale into the lithium-ion battery production market. Aleon and Gladieux are governed by separate boards of directors.
In connection with the SoftBank Merger, Fortress operates within SoftBank as an independent business headquartered in New York. Pursuant to the terms of the management agreement with our Manager, our Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors.
Pursuant to the terms of the management agreement with our Manager (the “Management Agreement”), our Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors.
In October 2021, Long Ridge completed its construction of its now fully-functional 485 MW combined-cycle power plant at the site and the associated plans to self-supply the natural gas fuel requirements for the plant. Long Ridge continues to evaluate opportunities to deploy its assets for sustainable and traditional energy projects and other value-driving enterprises.
In October 2021, Long Ridge completed its construction of its now fully-functional 485 megawatt combined-cycle power plant at the site and the associated plans to self-supply the natural gas fuel requirements for the plant.
Our Strategy We invest across a number of major sectors including energy, intermodal transport, ports and terminals and rail, and we may pursue acquisitions in other areas as and when opportunities arise in the future.
As of December 31, 2023, we had total consolidated assets of $2.4 billion and redeemable preferred stock and equity of $0.7 billion. Our Strategy We invest across a number of major sectors including energy, intermodal transport, ports and terminals and rail, and we may pursue acquisitions in other areas as and when opportunities arise in the future.
Acquisition of Transtar On July 28, 2021, FTAI completed the purchase of 100% of the equity interests of Transtar, which was a wholly owned short-line railroad subsidiary of U.S. Steel, for a cash purchase price of $640.0 million, subject to certain customary adjustments set forth in the Transtar Purchase Agreement.
Through operational improvements and potential long-term development projects, we intend to enhance performance of under-utilized Transtar assets. 8 Acquisition of Transtar On July 28, 2021, FTAI completed the purchase of 100% of the equity interests of Transtar, which was a wholly owned short-line railroad subsidiary of USS, for a cash purchase price of $640.0 million, subject to certain customary adjustments set forth in the Transtar Purchase Agreement.
Long Ridge Energy & Power is one of the Appalachian Basin’s leading multimodal energy terminals with a 485 megawatt power plant, nearly 300 acres of flat land, two barge docks on the Ohio River, a unit-train-capable loop track and direct highway access.
Long Ridge operates one of the Appalachian Basin’s leading multimodal energy terminals, with nearly 300 acres of flat land, two barge docks on the Ohio River, a unit-train-capable loop track and direct highway access. Long Ridge continues to evaluate opportunities to deploy its assets for sustainable and traditional energy projects and other value-driving enterprises.
Steel’s facilities in and around Gary, Indiana, Pittsburgh, Pennsylvania, Fairfield, Alabama, Ecorse, Michigan, Lorain, Ohio and Lone Star, Texas, including but not limited to: railcar maintenance and repair services, locomotive maintenance, inspection and repair services, maintenance-of-way services, car management services, and rail and material handling services.
Under the Railway Services Agreement, for an initial term of 15 years from and after the closing of the Transtar Acquisition, Transtar will continue to provide USS with rail haulage, switching and transportation services at USS’s facilities in and around Gary, Indiana, Pittsburgh, Pennsylvania, Fairfield, Alabama, Ecorse, Michigan, Lorain, Ohio and Lone Star, Texas, including but not limited to: railcar maintenance and repair services, locomotive maintenance, inspection and repair services, maintenance-of-way services, car management services, and rail and material handling services.
FTAI and USS also entered into an exclusive strategic rail partnership under which we will provide rail service to USS for an initial term of 15 years with minimum volume commitments for the first five years. Through operational improvements and potential long-term development projects, we intend to enhance performance of under-utilized Transtar assets.
Gary Railway Company, Indiana and Union Railroad Company LLC, Pennsylvania connect to two of U.S. Steel Corporation’s (“USS”) largest production facilities in North America. FTAI and USS also entered into an exclusive strategic rail partnership under which we will provide rail service to USS for an initial term of 15 years with minimum volume commitments for the first five years.
Steel Corporation’s (“USS”) largest production facilities in North America: the Gary Railway Company, Indiana; The Lake Terminal Railroad Company, Ohio; Union Railroad Company LLC, Pennsylvania; Fairfield Southern Company Inc., Alabama; Delray Connecting Railroad Company, Michigan; and the Texas & Northern Railroad Company, Texas.
Our Portfolio The following primarily comprise our Railroad business: Transtar Transtar is comprised of six short-line freight railroads and one switching company: the Gary Railway Company, Indiana; The Lake Terminal Railroad Company, Ohio; East Ohio Valley Railroad Company, Ohio; Fairfield Southern Company Inc., Alabama; Delray Connecting Railroad Company, Michigan; Texas & Northern Railroad Company, Texas; and the Union Railroad Company LLC, Pennsylvania.
Spin-Off of FTAI Infrastructure On August 1, 2022, FTAI distributed to the holders of FTAI common shares one share of FTAI Infrastructure Inc. common stock for each FTAI common share held by such shareholder at the close of business on July 21, 2022.
On August 1, 2022 (the “Spin-off Date”), FTAI distributed to the holders of FTAI common shares, one share of FTAI Infrastructure Inc. common stock for each FTAI common share held by such shareholder at the close of business on July 21, 2022 and we became an independent, publicly-traded company trading on The Nasdaq Global Select Market under the symbol “FIP.” Our operations consist of four primary business lines: (i) Railroad, (ii) Ports and Terminals, (iii) Power and Gas and (iv) Sustainability and Energy Transition.
Removed
Former Parent became a subsidiary of FTAI Aviation Ltd., a Cayman Islands exempted company and the surviving parent company (“FTAI Aviation”), upon completion of the transactions contemplated in that certain Agreement and Plan of Merger (the “Merger”) on November 10, 2022, between Former Parent and FTAI Aviation and certain other parties thereto.
Added
In connection with the SoftBank Merger, Fortress operates within SoftBank as an independent business headquartered in New York.
Removed
Except as otherwise specified, prior to the Merger, “FTAI” refers to Former Parent and, following the Merger, “FTAI” refers to FTAI Aviation, in each case including their consolidated subsidiaries.
Added
On May 22, 2023, Fortress and Mubadala announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank.
Removed
Prior to the spin-off, we operated as a subsidiary of FTAI, a Nasdaq-listed company that is externally managed and advised by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”). Following the spin-off, FTAI Infrastructure Inc. became an independent, publicly-traded company with its common stock listed under the symbol “FIP" on The Nasdaq Global Select Market.
Added
While Fortress’s senior investment professionals are expected to remain at Fortress, including those individuals who perform services for us, there can be no assurance that the transaction will not have an adverse impact on us or our relationship with our Manager.
Removed
Our operations consist of four primary business lines: (i) Railroad, (ii) Ports and Terminals, (iii) Power and Gas and (iv) Sustainability and Energy Transition. Our Railroad business primarily invests in and operates short line and regional railroads in North America.
Added
In addition to its property located at the Port, Jefferson Terminal owns an approximately 600-acre industrial property in Nederland, Texas (“Jefferson Terminal South”). Currently, Jefferson Terminal is constructing a new ship dock at Jefferson Terminal South in order to handle ammonia for an adjacent customer under a 15-year throughput agreement.
Removed
As of December 31, 2022, we had total consolidated assets of $2.5 billion and total redeemable preferred stock and equity of $789.4 million.
Added
Jefferson Terminal is currently exploring multiple opportunities for future development at Jefferson Terminal South.
Removed
FTAI Infrastructure Inc. was spun out as an entity taxed as a corporation for U.S. federal income tax purposes and holds FTAI’s former (i) Transtar business, (ii) Jefferson Terminal business, (iii) Repauno business, (iv) Long Ridge investment, (v) Aleon and Gladieux investment, (vi) KRS business, (vii) Clean Planet USA investment, (viii) FYX business, (ix) CarbonFree business, and (x) Containers business.
Added
Long Ridge West Virginia LLC During 2022, Long Ridge West Virginia LLC (“Long Ridge WV”), a wholly owned subsidiary, purchased rights to gas properties in West Virginia. In November 2023, we sold a 49.9% interest for $7.5 million in cash. Long Ridge WV will focus on energy and gas development in the West Virginia region.
Removed
FTAI Infrastructure Inc. retained all related project-level debt of those entities.
Added
GM-FTAI Holdco LLC owns a 100% interest in Gladieux and Aleon. Gladieux specializes in recycling spent catalyst produced in the petroleum refining industry. Aleon plans to develop a lithium-ion battery recycling business across the United States.
Removed
In connection with the spin-off, FTAI Infrastructure Inc. entered into subscription agreements to issue $300.0 million of redeemable preferred stock and warrants and sold $500.0 million of 10.500% senior secured notes due 2027 (the “2027 Notes”), the net proceeds of which were remitted to FTAI in connection with the spin-off. FTAI Infrastructure Inc. is externally managed by the Manager.
Added
In March 2023, we purchased the remaining non-controlling interest of FYX from an affiliate of our Manager for a purchase price of $4.4 million. This resulted in 100% ownership in FYX and the elimination of any non-controlling interest. FYX is currently presented as part of the Corporate and Other segment.
Removed
In connection with the spin-off, FTAI Infrastructure Inc. entered into a management agreement with the Manager (the “Management Agreement”), with substantially the same terms as the previously held management agreement between the Former Parent and the Manager. The Management Agreement has an 7 initial term of six years.
Removed
The Manager is entitled to a management fee, incentive fees (comprised of income incentive fees and capital gains incentive fees) and reimbursement of certain expenses on substantially similar terms as the previously held agreements with the Manager.
Removed
Our Portfolio 8 The following primarily comprise our Railroad business: Transtar Transtar is comprised of five short-line freight railroads and one switching company, including two railroads that connect to U.S.
Removed
Under the Railway Services Agreement, for an initial term of 15 years from and after the closing of the Transtar Acquisition, Transtar will continue to provide U.S. Steel with rail haulage, switching and transportation services at U.S.
Removed
The following primarily comprise our Ports and Terminals business: Jefferson Terminal In August 2014, FTAI and certain other Fortress affiliates purchased substantially all of the assets and assumed certain liabilities of Jefferson Terminal, a Texas-based group of companies developing crude oil and refined products logistics assets since 2012.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+18 added−13 removed291 unchanged
Biggest changeThe North American rail sector is a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements could significantly increase our operational costs of doing business, thereby adversely affecting our profitability. 17 The rail sector is subject to extensive laws, regulations and other requirements, including, but not limited to, those relating to the environment, safety, rates and charges, service obligations, employment, labor, immigration, minimum wages and overtime pay, health care and benefits, working conditions, public accessibility and other requirements.
Biggest changeThe North American rail sector is a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements could significantly increase our operational costs of doing business, thereby adversely affecting our profitability.
Key factors that may affect our operating businesses include, but are not limited to: • competition from market participants; • general economic and/or industry trends, including pricing for the products or services offered by our operating businesses; 16 • the issuance and/or continued availability of necessary permits, licenses, approvals and agreements from governmental agencies and third parties as are required to construct and operate such businesses; • changes or deficiencies in the design or construction of development projects; • unforeseen engineering, environmental or geological problems; • potential increases in construction and operating costs due to changes in the cost and availability of fuel, power, materials and supplies; • the availability and cost of skilled labor and equipment; • our ability to enter into additional satisfactory agreements with contractors and to maintain good relationships with these contractors in order to construct development projects within our expected cost parameters and time frame, and the ability of those contractors to perform their obligations under the contracts and to maintain their creditworthiness; • potential liability for injury or casualty losses which are not covered by insurance; • potential opposition from non-governmental organizations, environmental groups, local or other groups which may delay or prevent development activities; • local and economic conditions; • recent geopolitical events; • changes in legal requirements; and • force majeure events, including catastrophes and adverse weather conditions.
Key factors that may affect our operating businesses include, but are not limited to: • competition from market participants; 16 • general economic and/or industry trends, including pricing for the products or services offered by our operating businesses; • the issuance and/or continued availability of necessary permits, licenses, approvals and agreements from governmental agencies and third parties as are required to construct and operate such businesses; • changes or deficiencies in the design or construction of development projects; • unforeseen engineering, environmental or geological problems; • potential increases in construction and operating costs due to changes in the cost and availability of fuel, power, materials and supplies; • the availability and cost of skilled labor and equipment; • our ability to enter into additional satisfactory agreements with contractors and to maintain good relationships with these contractors in order to construct development projects within our expected cost parameters and time frame, and the ability of those contractors to perform their obligations under the contracts and to maintain their creditworthiness; • potential liability for injury or casualty losses which are not covered by insurance; • potential opposition from non-governmental organizations, environmental groups, local or other groups which may delay or prevent development activities; • local and economic conditions; • recent geopolitical events; • changes in legal requirements; and • force majeure events, including catastrophes and adverse weather conditions.
For example, these covenants significantly restrict our and certain of our subsidiaries’ ability to: 20 • incur indebtedness; • issue equity interests of the Company ranking pari passu with, or senior in priority to, the Series A Redeemable Preferred Stock; • issue equity interests of any subsidiary of the Company; • amend or repeal the certificate of incorporation or bylaws in a manner that is adverse to the holders of the Series A Redeemable Preferred Stock; • pay dividends or make other distributions; • repurchase or redeem capital stock or subordinated indebtedness and make investments; • create liens; • incur dividend or other payment restrictions affecting the Company and certain of its subsidiaries; • transfer or sell assets, including capital stock of subsidiaries; • merge or consolidate with other entities or transfer all or substantially all of the Company’s assets; • take actions to cause the Company to cease to be treated as a domestic C corporation for U.S. tax purposes; • consummate a change of control without concurrently redeeming our shares of Series A Redeemable Preferred Stock; • amend, terminate or permit the assignment or subcontract of, or the transfer of any rights or obligations under, the Management Agreement, in order to alter the (i) scope of services in any material respect, (ii) the compensation, fee payment or other economic terms relating to the Management Agreement, or (iii) the scope of matters expressly required to be approved by the Independent Directors (as such term is defined in the Management Agreement) pursuant to the Management Agreement; • engage in certain intercompany transactions; • engage in certain prohibited business activities; and • enter into transactions with affiliates.
For example, these covenants significantly restrict our and certain of our subsidiaries’ ability to: • incur indebtedness; • issue equity interests of the Company ranking pari passu with, or senior in priority to, the Series A Redeemable Preferred Stock; • issue equity interests of any subsidiary of the Company; 20 • amend or repeal the certificate of incorporation or bylaws in a manner that is adverse to the holders of the Series A Redeemable Preferred Stock; • pay dividends or make other distributions; • repurchase or redeem capital stock or subordinated indebtedness and make investments; • create liens; • incur dividend or other payment restrictions affecting the Company and certain of its subsidiaries; • transfer or sell assets, including capital stock of subsidiaries; • merge or consolidate with other entities or transfer all or substantially all of the Company’s assets; • take actions to cause the Company to cease to be treated as a domestic C corporation for U.S. tax purposes; • consummate a change of control without concurrently redeeming our shares of Series A Redeemable Preferred Stock; • amend, terminate or permit the assignment or subcontract of, or the transfer of any rights or obligations under, the Management Agreement, in order to alter the (i) scope of services in any material respect, (ii) the compensation, fee payment or other economic terms relating to the Management Agreement, or (iii) the scope of matters expressly required to be approved by the Independent Directors (as such term is defined in the Management Agreement) pursuant to the Management Agreement; • engage in certain intercompany transactions; • engage in certain prohibited business activities; and • enter into transactions with affiliates.
These provisions include, among others: • a classified board of directors with staggered three-year terms; 31 • provisions regarding the election of directors, classes of directors, the term of office of directors and the filling of director vacancies; • provisions regarding corporate opportunity; • removal of directors only for cause and only with the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote in the election of directors; • our board of directors to determine the powers, preferences and rights of our preferred stock and to issue such preferred stock without stockholder approval; • advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings; • a prohibition will be in our certificate of incorporation that states that directors will be elected by plurality vote, a provision which means that the holders of a majority of the issued and outstanding shares of common stock can elect all the directors standing for election; • a requirement in our bylaws specifically denying the ability of our stockholders to consent in writing to take any action in lieu of taking such action at a duly called annual or special meeting of our stockholders; and • our Corporation Securities are subject to ownership and transfer restrictions in order to reduce the possibility of an equity ownership shift that could result in limitations on our ability to utilize net operating loss carryforwards for U.S. federal income tax purposes.
These provisions include, among others: • a classified board of directors with staggered three-year terms; • provisions regarding the election of directors, classes of directors, the term of office of directors and the filling of director vacancies; • provisions regarding corporate opportunity; • removal of directors only for cause and only with the affirmative vote of at least 80% of the then issued and outstanding shares of our capital stock entitled to vote in the election of directors; • our board of directors to determine the powers, preferences and rights of our preferred stock and to issue such preferred stock without stockholder approval; • advance notice requirements applicable to stockholders for director nominations and actions to be taken at annual meetings; • a prohibition will be in our certificate of incorporation that states that directors will be elected by plurality vote, a provision which means that the holders of a majority of the issued and outstanding shares of common stock can elect all the directors standing for election; • a requirement in our bylaws specifically denying the ability of our stockholders to consent in writing to take any action in lieu of taking such action at a duly called annual or special meeting of our stockholders; and • our Corporation Securities are subject to ownership and transfer restrictions in order to reduce the possibility of an equity ownership shift that could result in limitations on our ability to utilize net operating loss carryforwards for U.S. federal income tax purposes.
Factors that could lead to such oversupply include, without limitation: 14 • general demand for the type of assets that we purchase; • general macroeconomic conditions, including market prices for commodities that our assets may serve; • geopolitical events, including war, prolonged armed conflict and acts of terrorism; • outbreaks of communicable diseases and natural disasters; • governmental regulation; • interest rates; • the availability of credit; • restructurings and bankruptcies of companies in the industries in which we operate, including our customers; • manufacturer production levels and technological innovation; • manufacturers merging or exiting the industry or ceasing to produce certain asset types; • retirement and obsolescence of the assets that we own; • increases in supply levels of assets in the market due to the sale or merging of our customers; and • reintroduction of previously unused or dormant assets into the industries in which we operate.
Factors that could lead to such oversupply include, without limitation: • general demand for the type of assets that we purchase; • general macroeconomic conditions, including market prices for commodities that our assets may serve; • geopolitical events, including war, prolonged armed conflict and acts of terrorism; • outbreaks of communicable diseases and natural disasters; • governmental regulation; • interest rates; • the availability of credit; • restructurings and bankruptcies of companies in the industries in which we operate, including our customers; • manufacturer production levels and technological innovation; • manufacturers merging or exiting the industry or ceasing to produce certain asset types; • retirement and obsolescence of the assets that we own; • increases in supply levels of assets in the market due to the sale or merging of our customers; and • reintroduction of previously unused or dormant assets into the industries in which we operate.
These factors include, without limitation: • a shift in our investor base; • our quarterly or annual earnings and cash flows, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; 29 • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions, dispositions or other transactions; • the failure of securities analysts to cover our stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • market performance of affiliates and other counterparties with whom we conduct business; • the operating and stock price performance of other comparable companies; • our failure to maintain our exemption under the Investment Company Act or satisfy Nasdaq listing requirements; • negative public perception of us, our competitors or industry; • overall market fluctuations; and • general economic conditions.
These factors include, without limitation: • a shift in our investor base; • our quarterly or annual earnings and cash flows, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions, dispositions or other transactions; • the failure of securities analysts to cover our stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • market performance of affiliates and other counterparties with whom we conduct business; • the operating and stock price performance of other comparable companies; • our failure to maintain our exemption under the Investment Company Act or satisfy Nasdaq listing requirements; • negative public perception of us, our competitors or industry; • overall market fluctuations; and • general economic conditions.
Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our stock include: • a shift in our investor base; • our quarterly or annual earnings, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions or dispositions; • the failure of securities analysts to cover our common stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and share price performance of other comparable companies; • overall market fluctuations; • general economic conditions; and • developments in the markets and market sectors in which we participate.
Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our stock include: • a shift in our investor base; • our quarterly or annual earnings, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; 28 • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions or dispositions; • the failure of securities analysts to cover our common stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and share price performance of other comparable companies; • overall market fluctuations; • general economic conditions; and • developments in the markets and market sectors in which we participate.
In addition, the compensation committee of our board of directors has the authority to grant such other awards to our Manager as it deems advisable; provided that no such award may be granted to our Manager in connection with any issuance by us of equity securities in excess of 10% of (i) the maximum number of shares of our common stock then being issued or (ii) if 30 such equity issuance relates to equity securities other than shares of our common stock, the maximum number of shares of our common stock determined in accordance with the Equity Security Factor.
In addition, the compensation committee of our board of directors has the authority to grant such other awards to our Manager as it deems advisable; provided that no such award may be granted to our Manager in connection with any issuance by us of equity securities in excess of 10% of (i) the maximum number of shares of our common stock then being issued or (ii) if such equity issuance relates to equity securities other than shares of our common stock, the maximum number of shares of our common stock determined in accordance with the Equity Security Factor.
Moreover, any disruptions in the operations of railroads, including those due to shortages of railcars, weather-related problems, flooding, drought, accidents, mechanical difficulties, strikes, lockouts or bottlenecks, could adversely impact our customers’ ability to move their product and, as a result, could affect our business. We could be negatively impacted by environmental, social, and governance (“ESG”) and sustainability-related matters.
Moreover, any disruptions in the operations of railroads, including those due to shortages of railcars, weather-related problems, flooding, drought, accidents, mechanical 18 difficulties, strikes, lockouts or bottlenecks, could adversely impact our customers’ ability to move their product and, as a result, could affect our business. We could be negatively impacted by environmental, social, and governance (“ESG”) and sustainability-related matters.
Because we depend on Class I railroads for a significant portion of our operations in North America, our results of operations, financial condition and liquidity may be adversely affected if our relationships with these carriers deteriorate. 19 The railroad industry in the United States and Canada is dominated by seven Class I carriers that have substantial market control and negotiating leverage.
Because we depend on Class I railroads for a significant portion of our operations in North America, our results of operations, financial condition and liquidity may be adversely affected if our relationships with these carriers deteriorate. The railroad industry in the United States and Canada is dominated by seven Class I carriers that have substantial market control and negotiating leverage.
Therefore, any delay in the Long Ridge Seller’s completion of the environmental work or receipt of related approvals or consents from Ohio EPA or U.S. EPA could delay our redevelopment activities. 22 In addition, a portion of Long Ridge was recently redeveloped as a combined cycle gas-fired electric generating facility, and other portions will likely be redeveloped in the future.
Therefore, any delay in the Long Ridge Seller’s completion of the environmental work or receipt of related approvals or consents from Ohio EPA or U.S. EPA could delay our redevelopment activities. In addition, a portion of Long Ridge was recently redeveloped as a combined cycle gas-fired electric generating facility, and other portions will likely be redeveloped in the future.
The United States federal income tax rules are constantly under review by persons involved in the legislative process, the Internal Revenue Service, and the United States Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations. We cannot predict how changes in the tax laws might affect us and our stockholders. 33 Item 1B.
The United States federal income tax rules are constantly under review by persons involved in the legislative process, the Internal Revenue Service, and the United States Treasury Department, which results in statutory changes as well as frequent revisions to regulations and interpretations. We cannot predict how changes in the tax laws might affect us and our stockholders. Item 1B.
Our failure to accurately assess the risks inherent in new asset categories or the financing risks associated with such assets could adversely affect our results of operations and our financial condition. Our Manager will not be liable to us for any acts or omissions performed in accordance with the Management Agreement, including with respect to the performance of our assets.
Our failure to accurately assess the risks inherent in new asset categories or the financing risks associated with such assets could adversely affect our results of operations and our financial condition. 26 Our Manager will not be liable to us for any acts or omissions performed in accordance with the Management Agreement, including with respect to the performance of our assets.
The Ownership Restrictions may also be waived by the board of directors on a case by case basis. There is no assurance, however, that the Company will not experience a future ownership change under Section 382 that may significantly limit its ability to use its NOL carryforwards as a result of such a waiver or otherwise.
The Ownership Restrictions may also be waived by the 30 board of directors on a case by case basis. There is no assurance, however, that the Company will not experience a future ownership change under Section 382 that may significantly limit its ability to use its NOL carryforwards as a result of such a waiver or otherwise.
Please see “—If we are deemed an investment company under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.” The effects of various environmental regulations may negatively affect the industries in which we operate which could have a material adverse effect on our financial condition, results of operations and cash flows.
Please see “—If we are deemed an investment company under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.” 21 The effects of various environmental regulations may negatively affect the industries in which we operate which could have a material adverse effect on our financial condition, results of operations and cash flows.
Further, after the second anniversary of the issuance date, if the Company fails to pay such cash dividends when required to do so, the dividend rate would be equal to 18.0% per annum, subject to increase as described below, until all such dividends are paid in cash.
Further, after the second 24 anniversary of the issuance date, if the Company fails to pay such cash dividends when required to do so, the dividend rate would be equal to 18.0% per annum, subject to increase as described below, until all such dividends are paid in cash.
See “—Risks Related to Our Manager—There are conflicts of interest in our relationship with our Manager.” We share certain key directors and officers with FTAI, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts.
See “—Risks Related to Our Manager—There are conflicts of interest in our relationship with our Manager.” 27 We share certain key directors and officers with FTAI, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts.
The overall impact of any such decision would depend on which Class I carrier is involved, the routes and freight movements affected, as well as the nature of any changes. Transtar faces competition from other railroads and other transportation providers. Transtar faces competition from other railroads, motor carriers, ships, barges, and pipelines.
The overall impact of any such decision 19 would depend on which Class I carrier is involved, the routes and freight movements affected, as well as the nature of any changes. Transtar faces competition from other railroads and other transportation providers. Transtar faces competition from other railroads, motor carriers, ships, barges, and pipelines.
Risks Related to Our Capital Structure 24 The terms of our Series A Preferred Stock have provisions that could result in the holders of the Series A Preferred Stock having the ability to elect a majority of our board of directors in the case of an Event of Noncompliance, including our failure to pay amounts due upon redemption of Series A Preferred Stock.
Risks Related to Our Capital Structure The terms of our Series A Preferred Stock have provisions that could result in the holders of the Series A Preferred Stock having the ability to elect a majority of our board of directors in the case of an Event of Noncompliance, including our failure to pay amounts due upon redemption of Series A Preferred Stock.
Net operating losses that expire unused will be unavailable to offset future income tax liabilities. In addition, 28 under the Tax Cuts and Jobs Act, federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited.
Net operating losses that expire unused will be unavailable to offset future income tax liabilities. In addition, under the Tax Cuts and Jobs Act, federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited.
Parts of our business depend on the secure operation of our IT systems and the IT systems of our third-party providers to manage, process, store, and transmit information. We have, from time to time, experienced threats to our data and systems, including malware and computer virus attacks.
Parts of our business depend on the secure operation of our IT systems and the IT systems of our third-party providers to manage, process, store, and transmit information. We have, from time to time, experienced cybersecurity threats to our data and systems, including malware and computer virus attacks.
If we are not able to maintain or document effective internal control over financial reporting, our independent registered public accounting firm may issue an adverse opinion as to the effectiveness of our internal control over financial reporting.
If we are not able to maintain or document effective internal control over financial reporting, our 29 independent registered public accounting firm may issue an adverse opinion as to the effectiveness of our internal control over financial reporting.
We have no experience operating as an independent company and cannot assure you that we will be able to successfully operate our business or implement our operating policies and strategies as described in this report. The timing, terms, price and form of consideration that we pay in future transactions may vary meaningfully from prior transactions.
We have limited experience operating as an independent company and cannot assure you that we will be able to successfully operate our business or implement our operating policies and strategies as described in this report. The timing, terms, price and form of consideration that we pay in future transactions may vary meaningfully from prior transactions.
For instance, more recently proposed bills such as the “Rail Shipper Fairness Act of 2017,” or competitive access proposals under consideration by the STB, if adopted, could increase government involvement in railroad pricing, service and operations and significantly change the federal regulatory framework of the railroad industry.
For instance, more recently proposed bills such as the “Rail Shipper Fairness Act of 2020,” or competitive access proposals under consideration by the STB, if adopted, could increase government involvement in railroad pricing, service and operations and significantly change the federal regulatory framework of the railroad industry.
Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs and liabilities. While we devote substantial resources to maintaining adequate levels of cyber-security, our resources and technical sophistication may not be adequate to prevent all types of cyberattacks .
Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs and liabilities. While we devote substantial resources to maintaining adequate levels of cyber-security, our resources and technical sophistication may not be adequate to prevent all types of cyberattacks or incidents .
A cyberattack that bypasses our information technology (“IT”) security systems or the IT security systems of our third-party providers, causing an IT security breach, may lead to a disruption of our IT systems and the loss of business information which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.
A cyberattack that bypasses our information technology (“IT”) security systems or the IT security systems of our third-party providers, causing an IT security breach or cybersecurity incident, may lead to a disruption of our IT systems and the loss of business information which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.
A cyberattack that bypasses our IT security systems or the IT security systems of our third-party providers, causing an IT security breach, could adversely impact our daily operations and lead to the loss of sensitive information, including our own proprietary information and that of our customers, suppliers and employees.
A cyberattack that bypasses our IT security systems or the IT security systems of our third-party providers, causing an IT security breach or cybersecurity incident, could adversely impact our daily operations and lead to the loss of sensitive information, including our own proprietary information and that of our customers, suppliers and employees.
Risks Related to Our Business We have no operating history as an independent company and may not be able to successfully operate our business strategy, generate sufficient revenue to make or sustain distributions to our stockholders or meet our contractual commitments.
Risks Related to Our Business We have limited operating history as an independent company and may not be able to successfully operate our business strategy, generate sufficient revenue to make or sustain distributions to our stockholders or meet our contractual commitments.
Our officers and other individuals who perform services for us (other than Jefferson Terminal, Repauno, Long Ridge, Transtar, Aleon and Gladieux, KRS, Clean Planet USA, FYX, CarbonFree and Containers employees) are employees of our Manager or other Fortress entities.
Our officers and other individuals who perform services for us (other than Jefferson Terminal, Repauno, Long Ridge, Transtar, Aleon and Gladieux, KRS, Clean Planet, FYX, and CarbonFree employees) are employees of our Manager or other Fortress entities.
Our results of operations and our ability to make or sustain distributions to our stockholders depend on several factors, including the availability of opportunities to acquire attractive assets, the level and volatility of interest rates, the availability of adequate short- and long-term financing, the financial markets and economic conditions.
Our results of operations, ability to make or sustain distributions to our stockholders or meet our contractual commitments depend on several factors, including the availability of opportunities to acquire attractive assets, the level and volatility of interest rates, the availability of adequate short- and long-term financing, the financial markets and economic conditions.
Following the second anniversary of the issuance date, the Company is required to pay cash dividends equal to the cash dividend rate. The cash dividend rate will be equal to 14.0% per annum subject to increase in accordance with the terms of the Series A Preferred Stock.
Following August 1, 2024, the second anniversary of the issuance date, the Company is required to pay cash dividends equal to the cash dividend rate. The cash dividend rate will be equal to 14.0% per annum subject to increase in accordance with the terms of the Series A Preferred Stock.
We earned approximately 10% and 15% of our revenue for the years ended December 31, 2022 and 2021 from one customer in the Jefferson Terminal segment, respectively, and 51% and 45% of our revenue from one customer in the Railroad segment during the years ended December 31, 2022 and 2021, respectively.
We earned approximately 12%, 10% and 15% of our revenue for the years ended December 31, 2023, 2022 and 2021 from one customer within the Jefferson Terminal segment, respectively, and 51%, 51% and 45% of our revenue from one customer within the Railroad segment during the years ended December 31, 2023. 2022 and 2021, respectively.
As of December 31, 2022, accounts receivable from three customers from the Jefferson Terminal and Railroad segments represented 55% of total accounts receivable, net.
As of December 31, 2023, accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 56% of total accounts receivable, net. As of December 31, 2022, accounts receivable from three customers within the Jefferson Terminal and Railroad segments represented 55% of total accounts receivable, net.
As a newly independent public company, there can be no assurance that we will be able to generate sufficient returns to pay our operating expenses and make satisfactory distributions to our stockholders, or any distributions at all.
As a newly independent public company, there can be no assurance that we will be able to generate sufficient returns to pay our operating expenses and make or sustain distributions to our stockholders, or any distributions at all, or meet our contractual commitments.
If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services or we could lose a major customer.
If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, or undergo material management or ownership changes, we could be pressured to reduce the prices we charge for our services or we could lose a major customer.
This may lead to a decrease in revenues and other consequences. 18 The adoption of additional federal, state, provincial or local laws or regulations, including any voluntary measures by the rail industry regarding railcar design or crude oil and liquid hydrocarbon rail transport activities, or efforts by local communities to restrict or limit rail traffic involving crude oil, could affect our business by increasing compliance costs and decreasing demand for our services, which could adversely affect our financial position and cash flows.
The adoption of additional federal, state, provincial or local laws or regulations, including any voluntary measures by the rail industry regarding railcar design or crude oil and liquid hydrocarbon rail transport activities, or efforts by local communities to restrict or limit rail traffic involving crude oil, could affect our business by increasing compliance costs and decreasing demand for our services, which could adversely affect our financial position and cash flows.
As of December 31, 2022, the entities that are included in our consolidated group for U.S. federal income tax purposes had approximately $623.6 million of net operating loss (“NOL”) carryforwards, and we may continue to incur NOL carryforwards in the future. $168.5 million of our NOLs will begin to expire, if not utilized, in 2034, and $453.0 of our NOL carryforwards have no expiration date.
As of December 31, 2023, the entities that are included in our consolidated group for U.S. federal income tax purposes had approximately $736.6 million of net operating loss (“NOL”) carryforwards, and we may continue to incur NOL carryforwards in the future. $168.5 million of our NOLs will begin to expire, if not utilized, in 2032, and $568.1 million of our NOL carryforwards have no expiration date.
If, for example, overall volume of crude-by-rail decreases, or if we do not have access to a sufficient number of compliant cars to transport required volumes under our existing contracts, our operations may be negatively affected.
If, for example, overall volume of crude-by-rail decreases, or if we do not have access to a sufficient number of compliant cars to transport required volumes under our existing contracts, our operations may be negatively affected. This may lead to a decrease in revenues and other consequences.
These laws and regulations are enforced by U.S. federal agencies including the U.S. Environmental Protection Agency (the “U.S. EPA”), the U.S. Department of Transportation (the “DOT”), the Occupational Safety and Health Act (the “OSHA”), the U.S. Federal Railroad Administration (the “FRA”), and the U.S. Surface Transportation Board (the “STB”), as well as numerous other state, provincial, local and federal agencies.
Environmental Protection Agency (the “U.S. EPA”), the U.S. Department of Transportation (the “DOT”), the Occupational Safety and Health Act (the “OSHA”), the U.S. Federal Railroad Administration (the 17 “FRA”), and the U.S. Surface Transportation Board (the “STB”), as well as numerous other state, provincial, local and federal agencies.
The agreements related to our spin-off from FTAI, including the Separation and Distribution Agreement (refer to Item 15. Exhibits, included herein), were negotiated in the context of our spin-off from FTAI while we were still part of FTAI and, accordingly, may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties.
Exhibits, included herein), were negotiated in the context of our spin-off from FTAI while we were still part of FTAI and, accordingly, may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties.
There are conflicts of interest in our relationship with our Manager. 25 Our Management Agreement was not negotiated at arm’s-length, and its terms, including fees payable, may not be as favorable to us as if they had been negotiated with an unaffiliated third party.
Our Management Agreement was not negotiated at arm’s-length, and its terms, including fees payable, may not be as favorable to us as if they had been negotiated with an unaffiliated third party.
Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. 32 While we currently intend to pay regular quarterly dividends to our stockholders, we may change our dividend policy at any time.
Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Such remedies could have a material adverse effect on the Company’s financial condition. Risks Related to Our Manager We are dependent on our Manager and other key personnel at Fortress and may not find suitable replacements if our Manager terminates the Management Agreement or if other key personnel depart.
Risks Related to Our Manager We are dependent on our Manager and other key personnel at Fortress and may not find suitable replacements if our Manager terminates the Management Agreement or if other key personnel depart.
Moreover, new, stricter environmental laws, regulations or enforcement policies, including those imposed in response to climate change, could be implemented that significantly increase our compliance costs, or require us to adopt more costly methods of operation.
If there is a delay in obtaining any required regulatory approval, it could delay projects and cause us to incur costs. 22 Moreover, new, stricter environmental laws, regulations or enforcement policies, including those imposed in response to climate change, could be implemented that significantly increase our compliance costs, or require us to adopt more costly methods of operation.
It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers in the end-user marketplace.
There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers in the end-user marketplace.
For example, there can be no assurance that analysts and investors will regard our corporate structure as clearer and simpler than the former FTAI corporate structure or place a greater value on our company as a stand-alone corporation than on our businesses being a part of FTAI. 27 Our agreements with FTAI may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties.
For example, there can be no assurance that analysts and investors will regard our corporate structure as clearer and simpler than the former FTAI corporate structure or place a greater value on our company as a stand-alone corporation than on our businesses being a part of FTAI.
These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or a change in our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.
These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or a change in our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium. 31 Our bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
There can be no assurance that we will continue to pay dividends in amounts or on a basis consistent with prior distributions to our investors, if at all.
There can be no assurance that we will continue to pay dividends in amounts or on a basis consistent with prior distributions to our investors, if at all. Furthermore, our net cash provided by operating activities could be less than the amount of distributions to our stockholders.
Our inability to obtain sufficient capital, or to renew or expand our credit facilities, could result in increased funding costs and would limit our ability to: • meet the terms and maturities of our existing and future debt facilities; • purchase new assets or refinance existing assets; • fund our working capital needs and maintain adequate liquidity; and • finance other growth initiatives. 21 In addition, we conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”).
Our inability to obtain sufficient capital, or to renew or expand our credit facilities, could result in increased funding costs and would limit our ability to: • meet the terms and maturities of our existing and future debt facilities; • purchase new assets or refinance existing assets; • fund our working capital needs and maintain adequate liquidity; and • finance other growth initiatives.
Any such development could have an adverse effect on our margins and financial position, and would negatively affect our revenues and results of operations and/or trading price of our common stock. The acquisition of Transtar may not achieve its intended results and we may be unable to successfully integrate the operations of Transtar.
Any such development could have an adverse effect on our margins and financial position, and would negatively affect our revenues and results of operations and/or trading price of our common stock.
We have not obtained a formal determination from the SEC as to our status under the Investment Company Act and, consequently, any violation of the Investment Company Act would subject us to material adverse consequences.
We have not obtained a formal determination from the SEC as to our status under the Investment Company Act and, consequently, any violation of the Investment Company Act would subject us to material adverse consequences. Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.
Our Manager makes decisions about our investments in accordance with broad investment guidelines adopted by our board of directors. Accordingly, we may, without a stockholder vote, change our target sectors and acquire a variety of assets that differ from, and are possibly riskier than, our current asset portfolio.
Accordingly, we may, without a stockholder vote, change our target sectors and acquire a variety of assets that differ from, and are possibly riskier than, our current asset portfolio.
If any of the analysts who may cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our common stock price may decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who may cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our common stock price may decline.
In addition, when counterparties default, we may fail to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently use or sell them. 15 If we acquire a high concentration of a particular type of asset, or concentrate our investments in a particular sector, our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.
If we acquire a high concentration of a particular type of asset, or concentrate our investments in a particular sector, our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.
In addition, our Manager may assign our Management Agreement to an entity whose business and operations are managed or supervised by Mr. Wesley R.
In addition, our Manager may assign our Management Agreement to an entity whose business and operations are managed or supervised by Mr. Wesley R. Edens, who is a principal and a member of the board of directors of Fortress, an affiliate of our Manager, and a member of the management committee of Fortress since co-founding Fortress in May 1998.
The industries in which we operate have experienced periods of oversupply during which asset values have declined, particularly during the most recent economic downturn, and any future oversupply could materially adversely affect our results of operations and cash flows.
In addition, limitations on the availability of capital, higher costs of capital for financing expenditures or the desire to preserve liquidity, may cause our current or prospective customers to make reductions in future capital budgets and spending. 14 The industries in which we operate have experienced periods of oversupply during which asset values have declined, particularly during the most recent economic downturn, and any future oversupply could materially adversely affect our results of operations and cash flows.
If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. We conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act.
In addition, this material weakness may also have the effect of heightening other risks described in this “Risk Factors” section. 23 If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
In addition, we may change our strategy without a stockholder vote, which may result in our acquiring assets that are different, riskier or less profitable than our current assets. Our Manager is authorized to follow a broad asset acquisition strategy. We may pursue other types of acquisitions as market conditions evolve.
Our directors have approved a broad asset acquisition strategy for our Manager and will not approve each acquisition we make at the direction of our Manager. In addition, we may change our strategy without a stockholder vote, which may result in our acquiring assets that are different, riskier or less profitable than our current assets.
These rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly. For example, as a result of becoming a public company, we must have independent directors and board committees.
These rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly.
If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline. The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
For example, as a result of becoming a public company, we must have independent directors and board committees. 32 If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline.
Our Management Agreement generally does not limit or restrict our Manager or its affiliates from engaging in any business or managing other pooled investment vehicles that invest in assets that meet our asset acquisition objectives.
Fortress funds generally have a fee structure similar to ours, but the fees actually paid will vary depending on the size, terms and performance of each fund. 25 Our Management Agreement generally does not limit or restrict our Manager or its affiliates from engaging in any business or managing other pooled investment vehicles that invest in assets that meet our asset acquisition objectives.
Although we currently intend to pay regular quarterly dividends to holders of our common stock, we may change our dividend policy at any time. Our net cash provided by operating activities could be less than the amount of distributions to our stockholders.
While we currently pay regular quarterly dividends to our stockholders, we may change our dividend policy at any time, including, to the extent necessary, to alleviate liquidity risk. Although we currently pay regular quarterly dividends to holders of our common stock, we may change our dividend policy at any time.
Once received, permits and approvals may be subject to litigation, and projects may be delayed or approvals reversed or modified in litigation. If there is a delay in obtaining any required regulatory approval, it could delay projects and cause us to incur costs.
Once received, permits and approvals may be subject to litigation, and projects may be delayed or approvals reversed or modified in litigation.
Investments with higher yield potential are generally riskier or more speculative than investments with lower yield potential.
Investments with higher yield potential are generally riskier or more speculative than investments with lower yield potential. This could result in increased risk to the value of our portfolio of assets and our common stock.
As such, certain forms of financing such as finance leases may not be available to us.
In addition, we conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”). As such, certain forms of financing such as finance leases may not be available to us.
Removed
In addition, limitations on the availability of capital, higher costs of capital for financing expenditures or the desire to preserve liquidity, may cause our current or prospective customers to make reductions in future capital budgets and spending.
Added
In addition, when counterparties default, we may fail 15 to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently use or sell them.
Removed
As of December 31, 2021, accounts receivable from two customers from the Jefferson Terminal and Railroad segments represented 48% of total accounts receivable, net. 23 There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.
Added
The rail sector is subject to extensive laws, regulations and other requirements, including, but not limited to, those relating to the environment, safety, rates and charges, service obligations, employment, labor, immigration, minimum wages and overtime pay, health care and benefits, working conditions, public accessibility and other requirements. These laws and regulations are enforced by U.S. federal agencies including the U.S.
Removed
On July 28, 2021, FTAI completed the previously announced acquisition of 100% of the equity interests of Transtar (the “Transtar Acquisition”), a wholly owned short-line railroad subsidiary of United States Steel Corporation (the “Seller”).
Added
We have identified a material weakness in our internal control over financial reporting.
Removed
Transtar is comprised of five short-line freight railroads and one switching company, including two that connect to Seller’s largest production facilities in North America: the Gary Railway Company, Indiana; The Lake Terminal Railroad Company, Ohio; Union Railroad Company LLC, Pennsylvania; Fairfield Southern Company Inc., Alabama (switching company); Delray Connecting Railroad Company, Michigan; and the Texas & Northern Railroad Company, Texas.
Added
If we fail to properly remediate this material weakness or if we are otherwise unable to develop and maintain an effective system of internal control over financial reporting, material misstatements in our financial statements could occur and we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us, our business, results of operations and financial condition, and the trading price of our common stock.
Removed
We acquired Transtar from FTAI in connection with the spin-off transaction, along with the rest of our operating businesses. As a result, we are subject to certain risks relating to the Transtar Acquisition, which could have a material adverse effect on our business, results of operations and financial condition, some of which may be exacerbated by the spin-off transaction.
Added
Controls and Procedures of this Annual Report, we have identified a material weakness in our internal control over financial reporting relating to the Company’s review of the cash flow projections and other key assumptions used in the goodwill impairment test analysis as of October 1, 2023, relating to the Jefferson Terminal reporting unit was not timely or in sufficient detail.
Removed
Such risks may include, but are not limited to: • failure to successfully integrate Transtar in a manner that permits us to realize the anticipated benefits of the acquisition; • difficulties and delays integrating Transtar’s personnel, operations and systems and retaining key employees, including as a result of the spin-off transaction; • higher than anticipated costs incurred in connection with the integration of the business and operations of Transtar, including as a result of the spin-off transaction; • challenges in operating and managing rail lines across geographically disparate regions; • disruptions to our ongoing business and diversions of our management’s attention caused by transition or integration activities involving Transtar, including as a result of the spin-off transaction; • challenges with implementing adequate and appropriate controls, procedures and policies in Transtar’s business, including as a result of the spin-off transaction; • Transtar’s dependence on the Seller as its primary customer; • difficulties expanding our customer base; • assumption of pre-existing contractual relationships of Transtar that we may not have otherwise entered into, the termination or modification of which may be costly or disruptive to our business; and • any potential litigation arising from the transaction.
Added
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.
Removed
The successful integration of a new business also depends on our ability to manage the new business, realize forecasted synergies and full value from the combined business. Our business, results of operations, financial condition and cash flows could be materially adversely affected if we are unable to successfully integrate Transtar.
Added
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate and implement steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
Removed
Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed0 unchanged
Biggest changeWe are redeveloping Repauno, located in New Jersey, which includes over 1,600 acres of land, riparian rights, rail tracks and a 186,000 barrel underground storage cavern, to be a multi-purpose, multi-modal deepwater port. Transtar owns or has operating rights on (through easements, leases, licenses, or other arrangements) roughly 2,000 acres of real property in Michigan, Ohio, Pennsylvania, Texas, and Indiana.
Biggest changeJefferson Terminal leases approximately 250 acres of property for its terminal facilities and leases approximately 16,100 square feet of office space in Texas. We are redeveloping Repauno, located in New Jersey, which includes over 1,600 acres of land, riparian rights, rail tracks and a 186,000 barrel underground storage cavern, to be a multi-purpose, multi-modal deepwater port.
Additionally, FYX and our railcar cleaning business lease space in Kentucky and Maine, respectively. We believe that our office facilities and properties are suitable and adequate for our business as it is contemplated to be conducted.
We believe that our office facilities and properties are suitable and adequate for our business as it is contemplated to be conducted.
Item 2. Properties An affiliate of our Manager leases principal executive offices at 1345 Avenue of the Americas, 45th Floor, New York, NY 10105. Jefferson Terminal leases approximately 250 acres of property for its terminal facilities and leases approximately 12,300 square feet of office space in Texas.
Item 2. Properties An affiliate of our Manager leases principal executive offices at 1345 Avenue of the Americas, 45th Floor, New York, NY 10105. We sublease a portion of office space from an entity controlled by certain principals of Fortress in New York.
Added
Transtar owns or has operating rights on (through easements, leases, licenses, or other arrangements) roughly 2,000 acres of real property in Michigan, Ohio, Pennsylvania, Texas, and Indiana. Additionally, FYX and our railcar cleaning business lease space in Kentucky, Florida and Maine, respectively.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−0 removed4 unchanged
Biggest change(in whole dollars) Index 8/1/2022 9/30/2022 12/31/2022 FTAI Infrastructure Inc. $ 100.00 $ 72.73 $ 90.44 S&P SmallCap 600 100.00 86.17 94.09 Dow Jones US Transportation Services 100.00 77.74 95.59 Alerian MLP 100.00 96.06 105.77 36 Item 6. [Reserved]
Biggest change(in whole dollars) Index 8/1/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 FTAI Infrastructure Inc. $ 100.00 $ 72.73 $ 90.44 $ 93.04 $ 115.53 $ 101.65 $ 123.89 S&P SmallCap 600 100.00 86.17 94.09 96.50 99.76 94.85 109.19 Dow Jones US Transportation Services 100.00 77.74 95.59 106.62 125.14 125.39 125.39 Alerian MLP 100.00 96.06 105.77 110.10 116.02 127.51 133.85 36 Item 6. [Reserved]
COMPARISON OF 5 MONTH CUMULATIVE TOTAL RETURN* Among FTAI Infrastructure Inc., the S&P SmallCap 600 Index, the Dow Jones US Transportation Services Index and the Alerian MLP Index ______________________________________________________________________________________ *$100 invested on 8/1/22 in stock or 7/31/22 in index, including reinvestment of dividends. Fiscal year ending December 31.
COMPARISON OF CUMULATIVE TOTAL RETURN* Among FTAI Infrastructure Inc., the S&P SmallCap 600 Index, the Dow Jones US Transportation Services Index and the Alerian MLP Index ______________________________________________________________________________________ *$100 invested on 8/1/22 in stock or 7/31/22 in index, including reinvestment of dividends. Fiscal year ending December 31.
As of December 31, 2022, the Incentive Plan provides for the issuance of up to 30.0 million shares. The following table summarizes the total number of outstanding securities in the Incentive Plan and the number of securities remaining for future issuance, as well as the weighted average strike price of all outstanding securities as of December 31, 2022.
As of December 31, 2023, the Incentive Plan provides for the issuance of up to 30.0 million shares. The following table summarizes the total number of outstanding securities in the Incentive Plan and the number of securities remaining for future issuance, as well as the weighted average strike price of all outstanding securities as of December 31, 2023.
Equity Compensation Plan Information Plan category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance under equity compensation plans (1) Equity compensation plans approved by security holders 14,394,835 $ 2.77 29,985,000 Equity compensation plans not approved by security holders — — — Total 14,394,835 29,985,000 ______________________________________________________________________________________ (1) Excludes 15,000 stock options issued to directors as compensation. 35 Performance Graph The following graph compares the cumulative total return for our common stock (stock price change plus reinvested dividends) with the comparable return of three indices: S&P Small Cap 400, Dow Jones US Transportation Services, and Alerian MLP.
Equity Compensation Plan Information Plan category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance under equity compensation plans (1) Equity compensation plans approved by security holders 16,542,751 $ 2.76 25,177,237 Equity compensation plans not approved by security holders — — — Total 16,542,751 25,177,237 ______________________________________________________________________________________ (1) Excludes 15,000 stock options issued to directors as compensation. 35 Performance Graph The following graph compares the cumulative total return for our common stock (stock price change plus reinvested dividends) with the comparable return of three indices: S&P Small Cap 400, Dow Jones US Transportation Services, and Alerian MLP.
As of March 2, 2023, there were approximately 17 record holders of our common stock. This figure does not reflect the beneficial ownership of stock held in nominee name.
As of March 20, 2024, there were approximately 19 record holders of our common stock. This figure does not reflect the beneficial ownership of stock held in nominee name.
On March 1, 2023, our board of directors declared a cash dividend on our common stock of $0.03 per share for the quarter ended December 31, 2022, payable on March 28, 2023 to the holders of record on March 14, 2023.
On February 29, 2024, our board of directors declared a cash dividend on our common stock of $0.03 per share for the quarter ended December 31, 2023, payable on April 5, 2024 to the holders of record on March 27, 2024.
Although we currently intend to continue to pay regular quarterly dividends to holders of our common stock, we may change our dividend policy at any time and no assurances can be given that any future dividends will be paid or, if paid, as to the amounts or timing.
We may change our dividend policy at any time and no assurances can be given that any future dividends will be paid or, if paid, as to the amounts or timing.
Added
For example, as discussed in Note 2 to the consolidated and combined consolidated financial statements, the Company’s management intends to alleviate liquidity risk by, among other things, eliminating dividends on our common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed1 unchanged
Biggest changeConsolidated and Combined Consolidated Financial Statements of FTAI Infrastructure Inc. 58 Report of Independent Registered Public Accounting Firm 60 Consolidated and Combined Consol idated Balance Sheets as of December 31, 202 2 and 202 1 62 Consolidated and Combined Consolidated Statements of Operations for the years ended December 31, 202 2 , 202 1 and 20 20 63 Consolidated and Co mbined Consolidated Statements of Comprehensive Loss for the years ended December 31, 202 2 , 202 1 and 20 20 64 Consolidated and Combined C onsolidated Statement of Changes in Equity for the years ended December 31, 202 2 , 202 1 and 20 20 65 Consolidated and Combined Consolidated Statements of Cash Flows for the years ended December 31, 202 2 , 202 1 and 20 20 66 Notes to Consolidated and Combined Consolidated Financial Statements 68 Note 1: Organization 68 Note 2: Summary of Significant Accounting Policies 68 Note 3 : Acquisition of Transtar, LLC 75 Note 4 : Leasing Equipment, net 76 Note 5 : Property, Plant and Equipment, net 77 Note 6 : Investments 77 Note 7 : Intangible Assets , net 80 Note 8 : Debt, net 81 Note 9 : Fair Value Measurements 83 Note 1 0 : Derivative Financial Instruments 85 Note 1 1 : Revenues 86 Note 1 2 : Leases 87 Note 1 3 : Equity-Based Compensation 88 Note 1 4 : Retirement Benefit Plans 89 Note 1 5 : Income Taxes 90 Note 1 6 : Management Agreement and Affiliate Transactions 92 Note 1 7 : Segment Information 94 Note 1 8 : Redeemable P re ferred Stock 95 Note 19 : Earnings per Share and Equity 96 Note 2 0 : Commitments and Contingencies 97 Note 2 1 : Subsequent Events 97
Biggest changeConsolidated and Combined Consolidated Financial Statements of FTAI Infrastructure Inc. 59 Report of Independent Registered Public Accounting Firm 60 Consolidated Balance Sheets as of December 31, 2023 and 2022 62 Consolidated and Combined Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 63 Consolidated and Combined Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021 64 Consolidated and Combined Consolidated Statement of Changes in Equity for the years ended December 31, 2023, 2022 and 2021 65 Consolidated and Combined Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 66 Notes to Consolidated and Combined Consolidated Financial Statements 68 Note 1: Organization 68 Note 2: Basis of Presentation and Summary of Significant Accounting Policies 68 Note 3: Leasing Equipment, net and Property 75 Note 4: Property, Plant and Equipment, net 76 Note 5: Investments 77 Note 6: Intangible Assets, net 80 Note 7: Debt, net 81 Note 8: Fair Value Measurements 83 Note 9: Revenues 85 Note 10: Leases 86 Note 11: Equity-Based Compensation 87 Note 12: Retirement Benefit Plans 89 Note 13: Income Taxes 90 Note 14: Management Agreement and Affiliate Transactions 91 Note 15: Segment Information 94 Note 16: Redeemable Preferred Stock 95 Note 17: Earnings per Share and Equity 96 Note 18: Commitments and Contingencies 97 Note 19: Subsequent Events 97

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

76 edited+33 added−23 removed42 unchanged
Biggest changeAdjusted EBITDA is defined as net income (loss) attributable to stockholders and Former Parent, 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, interest expense, interest costs on pension and OPEB liabilities, and dividends and accretion of redeemable preferred stock, (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. 38 The following table presents our consolidated and combined consolidated results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Lease income $ 3,221 $ 2,424 $ 1,186 $ 797 $ 1,238 Rail revenues 147,804 61,514 4,424 86,290 57,090 Terminal services revenues 59,574 45,038 50,887 14,536 (5,849) Crude marketing revenues — — 8,210 — (8,210) Roadside services revenue 47,899 — — 47,899 — Other revenue 3,468 11,243 3,855 (7,775) 7,388 Total revenues 261,966 120,219 68,562 141,747 51,657 Expenses Operating expenses 208,157 98,541 69,391 109,616 29,150 General and administrative 10,891 8,737 8,522 2,154 215 Acquisition and transaction expenses 16,844 14,826 1,658 2,018 13,168 Management fees and incentive allocation to affiliate 12,964 15,638 13,073 (2,674) 2,565 Depreciation and amortization 70,749 54,016 31,114 16,733 22,902 Total expenses 319,605 191,758 123,758 127,847 68,000 Other (expense) income Equity in losses of unconsolidated entities (67,399) (13,499) (3,107) (53,900) (10,392) (Loss) gain on sale of assets, net (1,603) 16 (8) (1,619) 24 Loss on extinguishment of debt — — (4,724) — 4,724 Interest expense (53,239) (16,019) (10,764) (37,220) (5,255) Other (expense) income (3,169) (8,930) 92 5,761 (9,022) Total other expense (125,410) (38,432) (18,511) (86,978) (19,921) Loss before income taxes (183,049) (109,971) (73,707) (73,078) (36,264) Provision for (benefit from) income taxes 4,468 (3,630) (1,984) 8,098 (1,646) Net loss (187,517) (106,341) (71,723) (81,176) (34,618) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (33,933) (26,472) (16,522) (7,461) (9,950) Less: Dividends and accretion of redeemable preferred stock 23,657 — — 23,657 — Net loss attributable to stockholders and Former Parent $ (177,241) $ (79,869) $ (55,201) $ (97,372) $ (24,668) 39 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net loss attributable to stockholders and Former Parent $ (177,241) $ (79,869) $ (55,201) $ (97,372) $ (24,668) Add: Provision for (benefit from) income taxes 4,468 (3,630) (1,984) 8,098 (1,646) Add: Equity-based compensation expense 4,146 4,038 2,325 108 1,713 Add: Acquisition and transaction expenses 16,844 14,826 1,658 2,018 13,168 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — 4,724 — (4,724) Add: Changes in fair value of non-hedge derivative instruments (1,125) (2,220) 181 1,095 (2,401) Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation & amortization expense 70,749 54,016 31,114 16,733 22,902 Add: Interest expense 53,239 16,019 10,764 37,220 5,255 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 13,939 29,095 3,140 (15,156) 25,955 Add: Dividends and accretion of redeemable preferred stock 23,657 — — 23,657 — Add: Interest costs on pension and OPEB liabilities 1,232 445 — 787 445 Less: Equity in losses of unconsolidated entities 67,399 13,499 3,107 53,900 10,392 Less: Non-controlling share of Adjusted EBITDA (2) (16,279) (12,508) (9,637) (3,771) (2,871) Adjusted EBITDA (non-GAAP) $ 61,028 $ 33,711 $ (9,809) $ 27,317 $ 43,520 __________________________________________________ (1) Includes the following items for the years ended December 31, 2022, 2021 and 2020: (i) net loss of $(67,658), $(11,838) and $(3,503), (ii) interest expense of $28,702, $5,611 and $1,138, (iii) depreciation and amortization expense of $28,399, $12,443 and $5,513, (iv) acquisition and transaction expense of $616, $104 and $581, (v) changes in fair value of non-hedge derivative instruments of $21,218, $19,850 and $(589), (vi) asset impairment of $2,280, $2,146 and $— and (vii) equity-based compensation of $382, $779 and $—, respectively.
Biggest changeAdjusted EBITDA is defined as net income (loss) attributable to stockholders or Former Parent, 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, interest expense, interest and other costs on pension and OPEB liabilities, dividends and accretion of redeemable preferred stock, and other non-recurring items, (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. 38 The following table presents our consolidated and combined consolidated results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Lease income $ 3,089 $ 3,221 $ 2,424 $ (132) $ 797 Rail revenues 167,793 147,804 61,514 19,989 86,290 Terminal services revenues 83,350 59,574 45,038 23,776 14,536 Roadside services revenues 68,190 47,899 — 20,291 47,899 Other revenue (1,950) 3,468 11,243 (5,418) (7,775) Total revenues 320,472 261,966 120,219 58,506 141,747 Expenses Operating expenses 253,672 208,157 98,541 45,515 109,616 General and administrative 12,833 10,891 8,737 1,942 2,154 Acquisition and transaction expenses 4,140 16,844 14,826 (12,704) 2,018 Management fees and incentive allocation to affiliate 12,467 12,964 15,638 (497) (2,674) Depreciation and amortization 80,992 70,749 54,016 10,243 16,733 Asset impairment 743 — — 743 — Total expenses 364,847 319,605 191,758 45,242 127,847 Other (expense) income Equity in losses of unconsolidated entities (24,707) (67,399) (13,499) 42,692 (53,900) Gain (loss) on sale of assets, net 6,855 (1,603) 16 8,458 (1,619) Loss on extinguishment of debt (2,036) — — (2,036) — Interest expense (99,603) (53,239) (16,019) (46,364) (37,220) Other income (expense) 6,586 (3,169) (8,930) 9,755 5,761 Total other expense (112,905) (125,410) (38,432) 12,505 (86,978) Loss before income taxes (157,280) (183,049) (109,971) 25,769 (73,078) Provision for (benefit from) income taxes 2,470 4,468 (3,630) (1,998) 8,098 Net loss (159,750) (187,517) (106,341) 27,767 (81,176) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (38,414) (33,933) (26,472) (4,481) (7,461) Less: Dividends and accretion of redeemable preferred stock 62,400 23,657 — 38,743 23,657 Net loss attributable to stockholders/Former Parent $ (183,736) $ (177,241) $ (79,869) $ (6,495) $ (97,372) 39 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net loss attributable to stockholders/Former Parent $ (183,736) $ (177,241) $ (79,869) $ (6,495) $ (97,372) Add: Provision for (benefit from) income taxes 2,470 4,468 (3,630) (1,998) 8,098 Add: Equity-based compensation expense 9,199 4,146 4,038 5,053 108 Add: Acquisition and transaction expenses 4,140 16,844 14,826 (12,704) 2,018 Add: Losses on the modification or extinguishment of debt and capital lease obligations 2,036 — — 2,036 — Add: Changes in fair value of non-hedge derivative instruments 1,125 (1,125) (2,220) 2,250 1,095 Add: Asset impairment charges 743 — — 743 — Add: Incentive allocations — — — — — Add: Depreciation & amortization expense (1) 81,541 70,749 54,016 10,792 16,733 Add: Interest expense 99,603 53,239 16,019 46,364 37,220 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 20,209 13,939 29,095 6,270 (15,156) Add: Dividends and accretion of redeemable preferred stock 62,400 23,657 — 38,743 23,657 Add: Interest and other costs on pension and OPEB liabilities 2,130 1,232 445 898 787 Add: Other non-recurring items (3) 2,470 — — 2,470 — Less: Equity in losses of unconsolidated entities 24,707 67,399 13,499 (42,692) 53,900 Less: Non-controlling share of Adjusted EBITDA (4) (21,515) (16,279) (12,508) (5,236) (3,771) Adjusted EBITDA (Non-GAAP) $ 107,522 $ 61,028 $ 33,711 $ 46,494 $ 27,317 ______________________________________________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) depreciation and amortization expense of $80,992, $70,749 and $54,016 and (ii) capitalized contract costs amortization of $549, $— and $—, respectively.
Expenses Total expenses increased $11.5 million which reflects: • an increase in operating expenses of $8.2 million which primarily reflects additional labor costs due to increased activity as well as higher insurance for the new Jefferson Terminal South property. • an increase in depreciation and amortization of $3.3 million due to additional assets placed into service.
Expenses Total expenses increased $11.5 million which reflects: • an increase in operating expenses of $8.2 million which primarily reflects additional labor costs due to increased activity as well as higher insurance for the new Jefferson Terminal South property; and • an increase in depreciation and amortization of $3.3 million due to additional assets placed into service.
As part of our assessment, we considered numerous factors, including: • macroeconomic conditions and their potential impact on reporting unit fair value; • industry and market conditions; • cost factors such as increases in raw materials, labor or other costs; • actual financial performance compared with budget and prior projections; and • events that may change the composition or carrying value of its net assets.
As part of our assessment, we considered numerous factors, including: • macroeconomic conditions and their potential impact on reporting unit fair value; 57 • industry and market conditions; • cost factors such as increases in raw materials, labor or other costs; • actual financial performance compared with budget and prior projections; and • events that may change the composition or carrying value of its net assets.
The Sustainability and Energy Transition segment is comprised of Aleon/Gladieux, Clean Planet, and CarbonFree, and all three investments are development stage businesses focused on sustainability and recycling. Corporate and Other primarily consists of unallocated corporate general and administrative expenses, management fees, debt and redeemable preferred stock.
The Sustainability and Energy Transition segment is comprised of Aleon/Gladieux, Clean Planet, and CarbonFree, and all three investments are development stage businesses focused on sustainability and recycling. 37 Corporate and Other primarily consists of unallocated corporate general and administrative expenses, management fees, debt and redeemable preferred stock.
Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in the Consolidated and Combined Consolidated Statements of Operations. Recent Accounting Pronouncements Please see Note 2 to our consolidated and combined consolidated financial statements included elsewhere in this filing for recent accounting pronouncements. 57
Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes in the Consolidated and Combined Consolidated Statements of Operations. Recent Accounting Pronouncements Please see Note 2 to our consolidated and combined consolidated financial statements included elsewhere in this filing for recent accounting pronouncements.
Operating expenses increased $109.6 million primarily due to: • an increase of $48.9 million in the Corporate and Other segment primarily due to the acquisition of a majority stake and consolidation of FYX in May 2022; • an increase of $49.0 million in the Railroad segment due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expenses; • an increase of $2.8 million at Repauno which primarily reflects increased activity; 40 • an increase of $8.2 million at Jefferson Terminal which primarily reflects additional labor costs due to increased activity as well as higher insurance for the new Jefferson Terminal South property.
Operating expenses increased $109.6 million primarily due to: • an increase of $48.9 million in the Corporate and Other segment primarily due to the acquisition of a majority stake and consolidation of FYX in May 2022; 41 • an increase of $49.0 million in the Railroad segment due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expenses; • an increase of $2.8 million at Repauno which primarily reflects increased activity; and • an increase of $8.2 million at Jefferson Terminal which primarily reflects additional labor costs due to increased activity as well as higher insurance for the new Jefferson Terminal South property.
Other (expense) income Total other expense increased $87.0 million which primarily reflects: • an increase in equity in losses of unconsolidated entities of $53.9 million which primarily reflects unrealized losses on power swaps at Long Ridge; • an increase in interest expense of $37.2 million which reflects an increase in the average outstanding debt of approximately $198.0 million from the 2027 Notes issued in July 2022 as well as the new EB-5.3 Loan Agreement taken out at Jefferson Terminal; • a decrease in other expense of $5.8 million primarily due to (i) a write-off of an earn-out receivable in 2021 related to the sale of a portion of our Long Ridge investment and (ii) an increase in interest income within the Sustainability and Energy Transition segment in 2022.
Other (expense) income Total other expense increased $87.0 million which primarily reflects: • an increase in equity in losses of unconsolidated entities of $53.9 million which primarily reflects unrealized losses on power swaps at Long Ridge; • an increase in interest expense of $37.2 million which reflects an increase in the average outstanding debt of approximately $198.0 million from the 2027 Notes issued in July 2022 as well as the new EB-5.3 Loan Agreement taken out at Jefferson Terminal; partially offset by • a decrease in other expense of $5.8 million primarily due to (i) a write-off of an earn-out receivable in 2021 related to the sale of a portion of our Long Ridge investment and (ii) an increase in interest income within the Sustainability and Energy Transition segment in 2022.
For our Jefferson Terminal reporting unit, we completed a quantitative analysis. We estimate the fair value of Jefferson Terminal using an income approach, specifically a discounted cash flow analysis. This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, EBITDA margins and discount rates.
For our Jefferson Terminal reporting unit, we completed a quantitative analysis. We estimate the fair value of Jefferson Terminal using an income approach, specifically a discounted cash flow analysis. This analysis requires us to make significant assumptions and estimates about the forecasted revenue growth rates, EBITDA margins, capital expenditures and discount rates.
Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $141.7 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Corporate and Other segments. • Rail revenue increased $86.3 million due to the acquisition of Transtar in July 2021; • Terminal services revenue increased $14.5 million due to higher volumes at Jefferson Terminal; • Roadside services revenue increased $47.9 million due to the acquisition of a majority stake and consolidation of FYX in May 2022; and • Other revenue decreased $7.8 million primarily due to a loss on butane forward purchase contracts and margin compression at Repauno.
Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $141.7 million primarily due to higher revenues in the Railroad, Jefferson Terminal, and Corporate and Other segments. • Rail revenue increased $86.3 million due to the acquisition of Transtar in July 2021; • Terminal services revenue increased $14.5 million due to higher volumes at Jefferson Terminal; and • Roadside services revenue increased $47.9 million due to the acquisition of a majority stake and consolidation of FYX in May 2022; partially offset by • Other revenue decreased $7.8 million primarily due to a loss on butane forward purchase contracts and margin compression at Repauno.
Corporate and other sources accounted for the remaining 18% of our total revenue. We expect to continue to invest in such market sectors, and pursue additional investment opportunities in other infrastructure businesses and assets we believe to be attractive and meet our investment objectives.
Corporate and other sources accounted for the remaining 21% of our total revenue. We expect to continue to invest in such market sectors, and pursue additional investment opportunities in other infrastructure businesses and assets we believe to be attractive and meet our investment objectives.
Further delays in executing anticipated contracts or achieving our projected volumes could adversely affect the fair value of the reporting unit. There were no impairments of goodwill for the years ended December 31, 2022, 2021, and 2020.
Further delays in executing anticipated contracts or achieving our projected volumes could adversely affect the fair value of the reporting unit. There were no impairments of goodwill for the years ended December 31, 2023, 2022 and 2021.
Additionally, Corporate and Other includes an investment in an unconsolidated entity engaged in the acquisition and leasing of shipping containers and an investment in the majority stake of an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.
Additionally, Corporate and Other includes an investment in an unconsolidated entity engaged in the acquisition and leasing of shipping containers and an operating company that provides roadside assistance services for the intermodal and over-the-road trucking industries.
The expansion of refineries in the Beaumont/Port Arthur area, as well as growing crude oil production in the U.S. and Canada, are expected to result in increased demand for storage on the U.S. Gulf Coast.
The expansion of refineries in the Beaumont/Port Arthur area, as well as growing crude oil and natural gas production in the U.S. and Canada, are expected to result in increased demand for storage on the U.S. Gulf Coast.
The Jefferson Terminal reporting unit had an estimated fair value that exceeded its carrying value by more than 10% but less than 20% as of October 1, 2022.
The Jefferson Terminal reporting unit had an estimated fair value that exceeded its carrying value by more than 10% but less than 20% as of October 1, 2023.
Application of Critical Accounting Policies 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 their estimated useful lives, to estimated residual values which are summarized as follows: Asset Range of Estimated Useful Lives Residual Value Estimates Railcars and locomotives 40 - 50 years from date of manufacture Scrap value at end of useful life Track and track related assets 15 - 50 years from date of manufacture Scrap value at end of useful life Land, site improvements and rights N/A N/A Bridges and tunnels 15 - 55 years Scrap value at end of useful life Buildings and site improvements 20 - 30 years Scrap value at end of useful life Railroad equipment 3 - 15 years from date of manufacture Scrap value at end of useful life Terminal machinery and equipment 15 - 25 years from date of manufacture Scrap value at end of useful life Vehicles 5 - 7 years from date of manufacture Scrap value at end of useful life Furniture and fixtures 3 - 6 years from date of purchase None Computer hardware and software 3 - 5 years from date of purchase None Construction in progress N/A N/A Impairment of Long-Lived Assets — We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable.
See Note 2 for additional information related to other cash requirements. 56 Application of Critical Accounting Policies 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 their estimated useful lives, to estimated residual values which are summarized as follows: Asset Range of Estimated Useful Lives Residual Value Estimates Railcars and locomotives 40 - 50 years from date of manufacture Scrap value at end of useful life Track and track related assets 15 - 50 years from date of manufacture Scrap value at end of useful life Land, site improvements and rights N/A N/A Bridges and tunnels 15 - 55 years Scrap value at end of useful life Buildings and site improvements 20 - 30 years Scrap value at end of useful life Railroad equipment 3 - 15 years from date of manufacture Scrap value at end of useful life Terminal machinery and equipment 15 - 25 years from date of manufacture Scrap value at end of useful life Vehicles 5 - 7 years from date of manufacture Scrap value at end of useful life Furniture and fixtures 3 - 6 years from date of purchase None Computer hardware and software 3 - 5 years from date of purchase None Construction in progress N/A N/A Impairment of Long-Lived Assets — We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable.
We did not make any principal repayments of debt during the year ended December 31, 2022. • During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Series 2021 Bonds (as defined in Note 8 of the consolidated and combined consolidated financial statements) of $425.0 million and (ii) EB-5 Loan Agreement of $26.1 million. • During the year ended December 31, 2020, additional borrowings were obtained in connection with the Series 2020 Bonds (as defined in Note 8 of the consolidated and combined consolidated financial statements) of $264.0 million.
We did not make any principal repayments of debt during the year ended December 31, 2022. • During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Series 2021 Bonds (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $425.0 million and (ii) EB-5 Loan Agreement of $26.1 million.
Geographic Information Please refer to Note 17 of our consolidated and combined consolidated financial statements for information by geographic area for each segment, all located in North America, of revenues from our external customers, for the years ended December 31, 2022, 2021 and 2020, as well as the geographic area for each segment of our total property, plant and equipment as of December 31, 2022 and 2021.
Geographic Information Please refer to Note 15 of our consolidated and combined consolidated financial statements for information by geographic area for each segment, all located in North America, of revenues from our external customers, for the years ended December 31, 2023, 2022 and 2021, as well as the geographic area for each segment of our total property, plant and equipment as of December 31, 2023 and 2022.
The Jefferson Terminal reporting unit forecasted revenue is dependent on the ramp up of volumes under current and expected future contracts for storage and throughput of heavy and light crude and refined products, expansion of refined product distribution to Mexico and movements in future oil spreads.
The Jefferson Terminal reporting unit forecasted revenue is dependent on the ramp up of volumes under current and expected future contracts for storage and throughput of heavy and light crude and refined products, expansion of refined product distribution to Mexico, expansion of volumes and execution of contracts related to sustainable fuels and movements in future oil spreads.
Our principal uses of liquidity have been and continue to be (i) acquisitions of and investments in infrastructure assets, (ii) expenses associated with our operating activities and (iii) debt service obligations associated with our investments. • Cash used for the purpose of making investments was $267.3 million, $828.7 million and $252.2 million during the years ended December 31, 2022, 2021 and 2020, respectively. • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.
Our principal uses of liquidity have been and continue to be (i) a cquisitions of and investments in infrastructure assets, (ii) expenses associated with our operating activities and (iii) debt service obligations associated with our investments. • Cash used for the purpose of making investments was $147.2 million, $267.3 million and $828.7 million during the years ended December 31, 2023, 2022 and 2021, respectively. • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.
Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $87.4 million which is primarily due to the acquisition of Transtar on July 28, 2021. Expenses Total expenses increased $58.2 million which is primarily due to the acquisition of Transtar on July 28, 2021.
Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $87.4 million which is primarily due to the acquisition of Transtar on July 28, 2021.
Our Sustainability and Energy Transition business focuses on investments in companies and assets that utilize green technology, produce sustainable fuels and products or enable customers to reduce their carbon footprint. For the year ended December 31, 2022, our Railroad business accounted for 57% of our total revenue and our Ports and Terminals business accounted for 25% of our total revenue.
Our Sustainability and Energy Transition business focuses on investments in companies and assets that utilize green technology, produce sustainable fuels and products or enable customers to reduce their carbon footprint. For the year ended December 31, 2023, our Railroad business accounted for 53% of our total revenue and our Ports and Terminals business accounted for 26% of our total revenue.
Goodwill — Goodwill includes the excess of the purchase price over the fair value of the net tangible and intangible assets associated with the acquisition of Jefferson Terminal, Transtar and FYX. As of December 31, 2022, the carrying amount of goodwill within the Jefferson Terminal, Railroad and Corporate and Other segments was $122.7 million, $132.1 million, and $5.4 million, respectively.
Goodwill — Goodwill includes the excess of the purchase price over the fair value of the net tangible and intangible assets associated with the acquisition of Jefferson Terminal, Transtar and FYX. As of December 31, 2023, the carrying amount of goodwill within the Jefferson Terminal, Railroad and Corporate and Other segments was $122.7 million, $147.2 million, and $5.4 million, respectively.
Debt Covenants We are in compliance with all of our debt covenants as of December 31, 2022 and 2021. See Note 8 to the consolidated and combined consolidated financial statements for information related to our debt obligations and respective covenants.
Debt Covenants We are in compliance with all of our debt covenants as of December 31, 2023. See Note 7 to the consolidated and combined consolidated financial statements for information related to our debt obligations and respective covenants.
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.
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.
See Note 8 of the consolidated and combined consolidated financial statements for additional information about our debt obligations. Lease Obligations — As of December 31, 2022, we had operating and finance lease obligations of $171.8 million, of which $8.2 million is due within the next twelve months.
See Note 7 of the consolidated and combined consolidated financial statements for additional information about our debt obligations. Lease Obligations — As of December 31, 2023, we had operating and finance lease obligations of $169.1 million, of which $8.8 million is due within the next twelve months.
Overview We are in the business of acquiring, developing and operating assets and businesses that represent critical infrastructure for customers in the transportation and energy industries. We were formed on December 13, 2021 as FTAI Infrastructure LLC, a Delaware limited liability company and subsidiary of Fortress Transportation and Infrastructure Investors LLC (“Former Parent”).
Overview We are in the business of acquiring, developing and operating assets and businesses that represent critical infrastructure for customers in the transportation, energy and industrial products industries. We were formed on December 13, 2021 as FTAI Infrastructure LLC, a Delaware limited liability company and subsidiary of FTAI Aviation Ltd.
Contractual Obligations and Cash Requirements Our material cash requirements include the following contractual and other obligations: Debt Obligations — As of December 31, 2022, we have outstanding principal and interest payment obligations of $1.3 billion and $569.6 million, respectively, of which, there is no principal payment due and $83.6 million of interest payments due within the next twelve months.
Contractual Obligations and Cash Requirements Our material cash requirements include the following contractual and other obligations: Debt Obligations — As of December 31, 2023, we have outstanding principal and interest payment obligations of $1.4 billion and $531.3 million, respectively, of which, there is no principal payment due and $97.2 million of interest payments due within the next twelve months.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $23.6 million due to an increase in the pro rata share of adjusted EBITDA from unconsolidated entities of $26.1 million and the changes noted above. 50 Sustainability and Energy Transition Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Other revenue $ — $ — $ — $ — $ — Total revenues — — — — — Expenses Operating expenses 10 — — 10 — Acquisition and transaction expenses 280 — — 280 — Total expenses 290 — — 290 — Other (expense) income Equity in losses of unconsolidated entities (7,012) (372) — (6,640) (372) Other income 2,123 — — 2,123 — Total other expense (4,889) (372) — (4,517) (372) Net loss attributable to stockholders and Former Parent $ (5,179) $ (372) $ — $ (4,807) $ (372) The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net loss attributable to stockholders and Former Parent $ (5,179) $ (372) $ — $ (4,807) $ (372) Add: Provision for income taxes — — — — — Add: Equity-based compensation expense — — — — — Add: Acquisition and transaction expenses 280 — — 280 — Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense — — — — — Add: Interest expense — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) (4,447) (372) — (4,075) (372) Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest costs on pension and OPEB liabilities — — — — — Less: Equity in losses of unconsolidated entities 7,012 372 — 6,640 372 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ (2,334) $ (372) $ — $ (1,962) $ (372) __________________________________________________ (1) Includes the following items for the years ended December 31, 2022 and 2021: (i) net loss of $(7,069) and $(372), (ii) depreciation expense of $774 and $—, and (iii) interest expense of $1,848 and $—, respectively.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased $7.5 million due to the changes noted above. 50 Sustainability and Energy Transition Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Other revenue $ — $ — $ — $ — $ — Total revenues — — — — — Expenses Operating expenses 29 10 — 19 10 Acquisition and transaction expenses 1 280 — (279) 280 Total expenses 30 290 — (260) 290 Other (expense) income Equity in losses of unconsolidated entities (14,814) (7,012) (372) (7,802) (6,640) Other income 2,529 2,123 — 406 2,123 Total other expense (12,285) (4,889) (372) (7,396) (4,517) Net loss attributable to stockholders/Former Parent $ (12,315) $ (5,179) $ (372) $ (7,136) $ (4,807) The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net loss attributable to stockholders/Former Parent $ (12,315) $ (5,179) $ (372) $ (7,136) $ (4,807) Add: Provision for income taxes — — — — — Add: Equity-based compensation expense — — — — — Add: Acquisition and transaction expenses 1 280 — (279) 280 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense — — — — — Add: Interest expense — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) (9,753) (4,447) (372) (5,306) (4,075) Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest and other costs on pension and OPEB liabilities — — — — — Add: Other non-recurring items — — — — — Less: Equity in (earnings) losses of unconsolidated entities 14,814 7,012 372 7,802 6,640 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (Non-GAAP) $ (7,253) $ (2,334) $ (372) $ (4,919) $ (1,962) ______________________________________________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net loss of $(14,814), $(7,069) and $(372), (ii) depreciation expense of $1,539, $774 and $—, and (iii) interest expense of $3,522, $1,848 and $—, respectively.
Our principal sources of liquidity to fund these uses have been and continue to be (i) cash and restricted cash on hand as of December 31, 2022 (ii) revenues from our infrastructure businesses net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales. • During the year ended December 31, 2022, additional borrowings were obtained in connection with the (i) 2027 Notes (as defined in Note 8 of the consolidated and combined consolidated financial statements) of $473.8 million; (ii) Transtar Revolver of $10.0 million and (iii) EB-5.3 Loan Agreement of $26.4 million.
Our principal sources of liquidity to fund these uses have been and continue to be (i) cash and restricted cash on hand as of December 31, 2023 (ii) revenues from our infrastructure businesses net of operating expenses, (iii) proceeds from borrowings and (iv) proceeds from asset sales. • During the year ended December 31, 2023, additional borrowings were obtained in connection with the (i) EB-5 Loan Agreement of $1.6 million, (ii) Transtar Revolver of $40.0 million, (iii) Credit Agreement of $25.0 million, (iv) 2027 Notes (as defined in Note 7 of the consolidated and combined consolidated financial statements) of $100.0 million, and (v) DRP Revolver of $19.3 million.
During the third quarter of 2022, we reorganized our historical operating segments into five operating segments as described below. Additionally, during the third quarter of 2022, we modified our definition of Adjusted EBITDA to exclude the impact of interest costs on pension and other post-employment benefits (“OPEB”) liabilities and dividends and accretion of redeemable preferred stock.
Additionally, during the third quarter of 2022, we modified our definition of Adjusted EBITDA to exclude the impact of interest and other costs on pension and other post-employment benefits (“OPEB”) liabilities and dividends and accretion of redeemable preferred stock.
Other (expense) income Total other expense increased $42.6 million primarily due to increases in equity in losses in unconsolidated entities primarily due to realized and unrealized losses on power swaps at Long Ridge, as well as an unexpected power plant outage at the end of 2022. Adjusted EBITDA (non-GAAP) Adjusted EBITDA decreased $7.5 million due to the changes noted above.
Other (expense) income Total other expenses increased $42.6 million primarily due to increases in equity in losses in unconsolidated entities primarily due to realized and unrealized losses on power swaps at Long Ridge, as well as an unexpected power plant outage at the end of 2022.
Liquidity and Capital Resources The liquidity required to fund our working capital, capital expenditures and other cash needs is provided from a combination of internally generated cash flows and external debt financing. In July 2022, we issued $500 million aggregate principal amount of the 2027 Notes.
Liquidity and Capital Resources The liquidity required to fund our working capital, capital expenditures and other cash needs is provided from a combination of internally generated cash flows and external debt financing. In July 2023, we issued an additional $100.0 million aggregate principal amount of the Senior Notes due 2027 (the “2027 Notes”) .
Comparison of the years ended December 31, 2022 and 2021 Other (expense) income Total other expense decreased $4.5 million which reflects an increase of $6.6 million in equity method losses in unconsolidated entities primarily due to increased losses at GM-FTAI Holdco LLC and Clean Planet Energy USA, as well as an increase in other income of $2.1 million due to interest income earned on outstanding notes. 51 Adjusted EBITDA (non-GAAP) Adjusted EBITDA decreased $2.0 million primarily due to the changes noted above.
Comparison of the years ended December 31, 2022 and 2021 Other (expense) income Other expense increased $4.5 million which reflects an increase of $6.6 million in equity method losses in unconsolidated entities primarily due to increased losses at GM-FTAI Holdco LLC and Clean Planet Energy USA, offset by an increase in other income of $2.1 million due to interest income earned on outstanding notes.
The Jefferson Terminal segment consists of a multi-modal crude oil and refined products terminal and other related assets. The Repauno segment consists of 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.
The Repauno segment consists of 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.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA decreased $5.5 million primarily due to the changes noted above.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased $8.6 million due to the changes noted above.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $0.4 million due to the changes noted above.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased $2.0 million due to the changes noted above.
Repauno Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Rail revenues $ 86 $ — $ — $ 86 $ — Terminal services revenues 563 374 — 189 374 Other revenue 3,468 11,243 3,855 (7,775) 7,388 Total revenues 4,117 11,617 3,855 (7,500) 7,762 Expenses Operating expenses 17,072 14,304 8,971 2,768 5,333 Depreciation and amortization 9,322 9,052 1,497 270 7,555 Total expenses 26,394 23,356 10,468 3,038 12,888 Other (expense) income Gain on sale of assets, net — 16 — (16) 16 Interest expense (1,590) (1,147) (1,335) (443) 188 Total other expense (1,590) (1,131) (1,335) (459) 204 Loss before income taxes (23,867) (12,870) (7,948) (10,997) (4,922) Provision for income taxes 165 — — 165 — Net loss (24,032) (12,870) (7,948) (11,162) (4,922) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (1,242) (222) (39) (1,020) (183) Net loss attributable to stockholders and Former Parent $ (22,790) $ (12,648) $ (7,909) $ (10,142) $ (4,739) 47 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net loss attributable to stockholders and Former Parent $ (22,790) $ (12,648) $ (7,909) $ (10,142) $ (4,739) Add: Provision for income taxes 165 — — 165 — Add: Equity-based compensation expense 595 823 649 (228) 174 Add: Acquisition and transaction expenses — — — — — Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments (1,125) (2,220) — 1,095 (2,220) Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 9,322 9,052 1,497 270 7,555 Add: Interest expense 1,590 1,147 1,335 443 (188) Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest costs on pension and OPEB liabilities — — — — — Less: Equity in losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA (1) (500) (303) (120) (197) (183) Adjusted EBITDA (non-GAAP) $ (12,743) $ (4,149) $ (4,548) $ (8,594) $ 399 __________________________________________________ (1) Includes the following items for the years ended December 31, 2022, 2021 and 2020: (i) equity-based compensation of $28, $28 and $22, (ii) provision for income taxes of $8, $— and $—, (iii) interest expense of $75, $39 and $46, (iv) depreciation and amortization expense of $442, $312 and $52, and (v) changes in fair value of non-hedge derivative instruments of $(53), $(76) and $— respectively.
Repauno Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Rail revenues $ — $ 86 $ — $ (86) $ 86 Terminal services revenues 12,641 563 374 12,078 189 Other revenue (1,950) 3,468 11,243 (5,418) (7,775) Total revenues 10,691 4,117 11,617 6,574 (7,500) Expenses Operating expenses 22,203 17,072 14,304 5,131 2,768 Depreciation and amortization 9,336 9,322 9,052 14 270 Total expenses 31,539 26,394 23,356 5,145 3,038 Other income (expense) Gain on sale of assets, net — — 16 — (16) Interest expense (2,557) (1,590) (1,147) (967) (443) Total other expense (2,557) (1,590) (1,131) (967) (459) Loss before income taxes (23,405) (23,867) (12,870) 462 (10,997) Provision for income taxes 496 165 — 331 165 Net loss (23,901) (24,032) (12,870) 131 (11,162) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (1,412) (1,242) (222) (170) (1020) Net loss attributable to stockholders/Former Parent $ (22,489) $ (22,790) $ (12,648) $ 301 $ (10,142) 47 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net loss attributable to stockholders/Former Parent $ (22,489) $ (22,790) $ (12,648) $ 301 $ (10,142) Add: Provision for income taxes 496 165 — 331 165 Add: Equity-based compensation expense 1,770 595 823 1,175 (228) Add: Acquisition and transaction expenses — — — — — Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments 1,125 (1,125) (2,220) 2,250 1,095 Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 9,336 9,322 9,052 14 270 Add: Interest expense 2,557 1,590 1,147 967 443 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest and other costs on pension and OPEB liabilities — — — — — Add: Other non-recurring items — — — — — Less: Equity in losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA (1) (856) (500) (303) (356) (197) Adjusted EBITDA (Non-GAAP) $ (8,061) $ (12,743) $ (4,149) $ 4,682 $ (8,594) ______________________________________________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) equity-based compensation of $99, $28 and $28, (ii) provision for income taxes of $28, $8 and $—, (iii) interest expense of $143, $75 and $39, (iv) depreciation and amortization expense of $523, $442 and $312, and (v) changes in fair value of non-hedge derivative instruments of $63, $(53) and $(76), respectively.
Power and Gas Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Other revenue $ — $ — $ — $ — $ — Total revenues — — — — — Expenses Operating expenses 826 99 1,356 727 (1,257) Acquisition and transaction expenses 458 — 907 458 (907) Total expenses 1,284 99 2,263 1,185 (2,164) Other (expense) income Equity in losses of unconsolidated entities (60,538) (13,597) (3,222) (46,941) (10,375) Other income (expense) 524 (3,782) — 4,306 (3,782) Total other expense (60,014) (17,379) (3,222) (42,635) (14,157) Loss before income taxes (61,298) (17,478) (5,485) (43,820) (11,993) Benefit from income taxes — (3,930) (2,265) 3,930 (1,665) Net loss (61,298) (13,548) (3,220) (47,750) (10,328) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — Net loss attributable to stockholders and Former Parent $ (61,298) $ (13,548) $ (3,220) $ (47,750) $ (10,328) 49 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net loss attributable to stockholders and Former Parent $ (61,298) $ (13,548) $ (3,220) $ (47,750) $ (10,328) Add: Benefit from income taxes — (3,930) (2,265) 3,930 (1,665) Add: Equity-based compensation expense — — — — — Add: Acquisition and transaction expenses 458 — 907 458 (907) Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense — — — — — Add: Interest expense — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 18,341 29,405 3,304 (11,064) 26,101 Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest costs on pension and OPEB liabilities — — — — — Less: Equity in losses of unconsolidated entities 60,538 13,597 3,222 46,941 10,375 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 18,039 $ 25,524 $ 1,948 $ (7,485) $ 23,576 __________________________________________________ (1) Includes the following items for the years ended December 31, 2022, 2021 and 2020: (i) net loss of $(60,538), $(11,430) and $(3,222), (ii) depreciation expense of $27,625, $12,443 and $5,513, (iii) interest expense of $26,758, $5,513 and $1,021, (iv) acquisition and transaction expense of $616, $104 and $581, (v) changes in fair value of non-hedge derivative instruments of $21,218, $19,850 and $(589), (vi) asset impairment of $2,280, $2,146 and $— and (vii) equity-based compensation of $382, $779, and $—, respectively.
Power and Gas Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Other revenue $ — $ — $ — $ — $ — Total revenues — — — — — Expenses Operating expenses 2,726 826 99 1,900 727 Acquisition and transaction expenses 94 458 — (364) 458 Total expenses 2,820 1,284 99 1,536 1,185 Other (expense) income Equity in losses of unconsolidated entities (9,949) (60,538) (13,597) 50,589 (46,941) Interest expense (3) — — (3) — Other income (expense) 7,523 524 (3,782) 6,999 4,306 Total other expense (2,429) (60,014) (17,379) 57,585 (42,635) Loss before income taxes (5,249) (61,298) (17,478) 56,049 (43,820) Benefit from income taxes — — (3,930) — 3,930 Net loss attributable to stockholders/Former Parent $ (5,249) $ (61,298) $ (13,548) $ 56,049 $ (47,750) 49 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net loss attributable to stockholders/Former Parent $ (5,249) $ (61,298) $ (13,548) $ 56,049 $ (47,750) Add: Benefit from income taxes — — (3,930) — 3,930 Add: Equity-based compensation expense — — — — — Add: Acquisition and transaction expenses 94 458 — (364) 458 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense — — — — — Add: Interest expense 3 — — 3 — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 29,987 18,341 29,405 11,646 (11,064) Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest and other costs on pension and OPEB liabilities — — — — — Add: Other non-recurring items — — — — — Less: Equity in losses of unconsolidated entities 9,949 60,538 13,597 (50,589) 46,941 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (Non-GAAP) $ 34,784 $ 18,039 $ 25,524 $ 16,745 $ (7,485) ______________________________________________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net loss of $(8,858), $(60,538) and $(11,430), (ii) depreciation expense of $26,146, $27,625 and $12,443, (iii) interest expense of $31,109, $26,758 and $5,513, (iv) acquisition and transaction expense of $445, $616 and $104, (v) changes in fair value of non-hedge derivative instruments of $(18,904), $21,218 and $19,850, (vi) asset impairment of $1,135, $2,280 and $2,146, (vii) equity-based compensation of $5, $382, and $779 and (viii) equity method basis adjustments of $(1,091), $— and $—, respectively.
In connection with the spin-off, as described below, FTAI Infrastructure LLC converted into FTAI Infrastructure Inc., a Delaware corporation, and acquired all of the material assets and investments that comprised FTAI's infrastructure business (“FTAI Infrastructure”).
(previously Fortress Transportation and Infrastructure Investors LLC; “FTAI” or “Former Parent”). In connection with the spin-off, FTAI Infrastructure LLC converted into FTAI Infrastructure Inc., a Delaware corporation, and acquired all of the material assets and investments that comprised FTAI's infrastructure business (“FTAI Infrastructure”).
(2) Includes the following items for the years ended December 31, 2022, 2021 and 2020: (i) equity-based compensation of $470, $751 and $374, (ii) provision for income taxes of $670, $52 and $59, (iii) interest expense of $5,491, $3,370 and $2,025, (iv) depreciation and amortization expense of $9,699, $8,411 and $6,149, (v) changes in fair value of non-hedge derivative instruments of $(53), $(76) and $38 (vi) loss on extinguishment of debt of $—, $— and $992, (vii) acquisition and transaction expenses of $1, $— and $—, and (vii) interest costs on pension and OPEB liabilities of $1, $—, and $—, respectively.
(4) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) equity-based compensation of $1,412, $470 and $751, (ii) provision for income taxes of $578, $670 and $52, (iii) interest expense of $7,391, $5,491 and $3,370, (iv) depreciation and amortization expense of $11,752, $9,699 and $8,411, (v) changes in fair value of non-hedge derivative instruments of $63, $(53) and $(76), (vi) acquisition and transaction expenses of $307, $1 and $—, (vii) interest and other costs on pension and OPEB liabilities of $6, $1, and $—, (viii) asset impairment of $2, $— and $— and (ix) other recurring items of $4, $— and $— respectively.
Expenses Total expenses increased $3.0 million primarily due to: • an increase in operating expenses of $2.8 million due to increased terminal activity; and • an increase in depreciation expense of $0.3 million due to assets being placed into service.
Expenses Total expenses increased $3.0 million primarily due to: • an increase in operating expenses of $2.8 million due to increased terminal activity; and • an increase in depreciation expense of $0.3 million due to assets being placed into service. 48 Other (expense) income Total other expense increased $0.5 million primarily due to an increase in interest expense for the period relating to the revolver loan.
Corporate and Other The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Roadside services revenues $ 47,899 $ — $ — $ 47,899 $ — Total revenues 47,899 — — 47,899 — Expenses Operating expenses 48,969 59 — 48,910 59 General and administrative 10,891 8,737 8,522 2,154 215 Acquisition and transaction expenses 15,279 11,985 751 3,294 11,234 Management fees and incentive allocation to affiliate 12,964 15,638 13,073 (2,674) 2,565 Depreciation and amortization 1,945 — — 1,945 — Total expenses 90,048 36,419 22,346 53,629 14,073 Other (expense) income Equity in earnings of unconsolidated entities 151 470 115 (319) 355 Interest expense (26,639) — — (26,639) — Other income 133 — — 133 — Total other (expense) income (26,355) 470 115 (26,825) 355 Loss before income taxes (68,504) (35,949) (22,231) (32,555) (13,718) Provision for income taxes — 7 3 (7) 4 Net loss (68,504) (35,956) (22,234) (32,548) (13,722) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries: (688) — — (688) — Less: Dividends and accretion of redeemable preferred stock 23,657 — — 23,657 — Net loss attributable to stockholders and Former Parent $ (91,473) $ (35,956) $ (22,234) $ (31,860) $ (13,722) 52 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net loss attributable to stockholders and Former Parent $ (91,473) $ (35,956) $ (22,234) $ (55,517) $ (13,722) Add: Provision for income taxes — 7 3 (7) 4 Add: Equity-based compensation expense — — — — — Add: Acquisition and transaction expenses 15,279 11,985 751 3,294 11,234 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 1,945 — — 1,945 — Add: Interest expense 26,639 — — 26,639 — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 45 62 (164) (17) 226 Add: Dividends and accretion of redeemable preferred stock 23,657 — — 23,657 — Add: Interest costs on pension and OPEB liabilities — — — — — Less: Equity in (earnings) losses of unconsolidated entities (151) (470) (115) 319 (355) Less: Non-controlling share of Adjusted EBITDA (2) (651) — — (651) — Adjusted EBITDA (non-GAAP) $ (24,710) $ (24,372) $ (21,759) $ (338) $ (2,613) __________________________________________________ (1) Includes the following items for the years ended December 31, 2022, 2021 and 2020: (i) net loss of $(51), $(36) and $(281) and (ii) interest expense of $96, $98 and $117, respectively.
Corporate and Other The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Roadside services revenues $ 68,190 $ 47,899 $ — $ 20,291 $ 47,899 Total revenues 68,190 47,899 — 20,291 47,899 Expenses Operating expenses 69,166 48,969 59 20,197 48,910 General and administrative 12,833 10,891 8,737 1,942 2,154 Acquisition and transaction expenses 1,938 15,279 11,985 (13,341) 3,294 Management fees and incentive allocation to affiliate 12,467 12,964 15,638 (497) (2,674) Depreciation and amortization 3,150 1,945 — 1,205 1,945 Total expenses 99,554 90,048 36,419 9,506 53,629 Other income (expense) Equity in earnings of unconsolidated entities 56 151 470 (95) (319) Loss on extinguishment of debt (1,099) — — (1,099) — Interest expense (62,316) (26,639) — (35,677) (26,639) Other income — 133 — (133) 133 Total other (expense) income (63,359) (26,355) 470 (37,004) (26,825) Loss before income taxes (94,723) (68,504) (35,949) (26,219) (32,555) Provision for income taxes 67 — 7 67 (7) Net loss (94,790) (68,504) (35,956) (26,286) (32,548) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries: (228) (688) — 460 (688) Less: Dividends and accretion of redeemable preferred stock 62,400 23,657 — 38,743 23,657 Net loss attributable to stockholders/Former Parent $ (156,962) $ (91,473) $ (35,956) $ (65,489) $ (55,517) 52 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net loss attributable to stockholders/Former Parent $ (156,962) $ (91,473) $ (35,956) $ (65,489) $ (55,517) Add: Provision for income taxes 67 — 7 67 (7) Add: Equity-based compensation expense 170 — — 170 — Add: Acquisition and transaction expenses 1,938 15,279 11,985 (13,341) 3,294 Add: Losses on the modification or extinguishment of debt and capital lease obligations 1,099 — — 1,099 — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 3,150 1,945 — 1,205 1,945 Add: Interest expense 62,316 26,639 — 35,677 26,639 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) (25) 45 62 (70) (17) Add: Dividends and accretion of redeemable preferred stock 62,400 23,657 — 38,743 23,657 Add: Interest and other costs on pension and OPEB liabilities — — — — — Add: Other non-recurring items — — — — — Less: Equity in (earnings) losses of unconsolidated entities (56) (151) (470) 95 319 Less: Non-controlling share of Adjusted EBITDA (2) (260) (651) — 391 (651) Adjusted EBITDA (Non-GAAP) $ (26,163) $ (24,710) $ (24,372) $ (1,453) $ (338) ______________________________________________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net loss of $(80), $(51) and $(36) and (ii) interest expense of $55, $96 and $98, respectively.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $43.5 million primarily due to (i) the changes noted above and (ii) an increase in the Pro-rata share of Adjusted EBITDA from unconsolidated entities. 42 Railroad Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Lease income $ 1,943 $ 736 $ — $ 1,207 $ 736 Rail revenues 147,718 61,514 4,424 86,204 57,090 Total revenues 149,661 62,250 4,424 87,411 57,826 Expenses Operating expenses 84,863 35,824 5,992 49,039 29,832 Acquisition and transaction expenses 763 2,841 — (2,078) 2,841 Depreciation and amortization 20,164 8,951 583 11,213 8,368 Total expenses 105,790 47,616 6,575 58,174 41,041 Other expense Loss on sale of assets, net (1,603) — — (1,603) — Interest expense (212) (60) (3) (152) (57) Other expense (1,632) (422) — (1,210) (422) Total other expense (3,447) (482) (3) (2,965) (479) Income (loss) before income taxes 40,424 14,152 (2,154) 26,272 16,306 Provision for income taxes 1,287 64 — 1,223 64 Net income (loss) 39,137 14,088 (2,154) 25,049 16,242 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries 15 — — 15 — Net income (loss) attributable to stockholders and Former Parent $ 39,122 $ 14,088 $ (2,154) $ 25,034 $ 16,242 43 The following table sets forth a reconciliation of net income (loss) attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net income (loss) attributable to stockholders and Former Parent $ 39,122 $ 14,088 $ (2,154) $ 25,034 $ 16,242 Add: Provision for income taxes 1,287 64 — 1,223 64 Add: Equity-based compensation expense 1,531 — — 1,531 — Add: Acquisition and transaction expenses 763 2,841 — (2,078) 2,841 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation & amortization expense 20,164 8,951 583 11,213 8,368 Add: Interest expense 212 60 3 152 57 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest costs on pension and OPEB liabilities 1,232 445 — 787 445 Less: Equity in losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA (1) (25) — — (25) — Adjusted EBITDA (non-GAAP) $ 64,286 $ 26,449 $ (1,568) $ 37,837 $ 28,017 __________________________________________________ (1) Includes the following items for the year ended December 31, 2022: (i) equity-based compensation of $2, (ii) provision for income taxes of $2, (iii) acquisition and transaction expenses of $1, (iv) interest costs on pension and OPEB liabilities of $1, and (v) depreciation and amortization expense of $19.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $27.3 million primarily due to the changes noted above. 42 Railroad Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Lease income $ 1,652 $ 1,943 $ 736 (291) 1,207 Rail revenues 167,793 147,718 61,514 20,075 86,204 Total revenues 169,445 149,661 62,250 19,784 87,411 Expenses Operating expenses 92,972 84,863 35,824 8,109 49,039 Acquisition and transaction expenses 737 763 2,841 (26) (2,078) Depreciation and amortization 19,590 20,164 8,951 (574) 11,213 Asset impairment 743 — — 743 — Total expenses 114,042 105,790 47,616 8,252 58,174 Other expense Loss on sale of assets, net (437) (1,603) — 1,166 (1,603) Loss on extinguishment of debt (937) — — (937) — Interest expense (2,284) (212) (60) (2,072) (152) Other expense (2,164) (1,632) (422) (532) (1,210) Total other expense (5,822) (3,447) (482) (2,375) (2,965) Income before income taxes 49,581 40,424 14,152 9,157 26,272 (Benefit from) provision for income taxes (561) 1,287 64 (1,848) 1,223 Net income 50,142 39,137 14,088 11,005 25,049 Less: Net income attributable to non-controlling interest in consolidated subsidiaries 143 15 — 128 15 Net income attributable to stockholders/Former Parent $ 49,999 $ 39,122 $ 14,088 $ 10,877 $ 25,034 43 The following table sets forth a reconciliation of net income attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net income attributable to stockholders/Former Parent $ 49,999 $ 39,122 $ 14,088 $ 10,877 25,034 Add: (Benefit from) provision for income taxes (561) 1,287 64 (1,848) 1,223 Add: Equity-based compensation expense 1,394 1,531 — (137) 1,531 Add: Acquisition and transaction expenses 737 763 2,841 (26) (2,078) Add: Losses on the modification or extinguishment of debt and capital lease obligations 937 — — 937 — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges 743 — — 743 — Add: Incentive allocations — — — — — Add: Depreciation & amortization expense 19,590 20,164 8,951 (574) 11,213 Add: Interest expense 2,284 212 60 2,072 152 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest and other costs on pension and OPEB liabilities 2,130 1,232 445 898 787 Add: Other non-recurring items (1) 1,339 — — 1,339 — Less: Equity in losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA (2) (71) (25) — (46) (25) Adjusted EBITDA (Non-GAAP) $ 78,521 $ 64,286 $ 26,449 $ 14,235 $ 37,837 ______________________________________________________________________________________ (1) Includes the following items for the year ended December 31, 2023: Railroad severance expense of $1,339.
Comparison of the years ended December 31, 2021 and 2020 Net cash used in operating activities increased $14.9 million, which primarily reflects (i) an increase in net loss of $34.6 million and (ii) changes in management fees payable to affiliate, accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $7.6 million, partially offset by (iii) an increase in depreciation and amortization of $22.9 million, and (iv) a change in equity in losses of unconsolidated entities of $10.4 million.
Comparison of the years ended December 31, 2022 and 2021 Net cash used in operating activities decreased $19.0 million, which primarily reflects (i) an increase in net loss of $81.2 million, partially offset by (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $14.7 million, (iii) an increase in depreciation and amortization of $16.7 million, (iv) a change in equity in losses of unconsolidated entities of $53.9 million, and (v) an increase in deferred income taxes of $7.8 million.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $37.8 million due to the changes noted above. Comparison of the years ended December 31, 2021 and 2020 Revenues Total revenues increased $57.8 million which is primarily due to the acquisition of Transtar on July 28, 2021.
Expenses Total expenses increased $58.2 million which is primarily due to the acquisition of Transtar on July 28, 2021. 44 Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $37.8 million due to the changes noted above.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $28.0 million due to the changes noted above. 44 Jefferson Terminal Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Revenues Lease income $ 1,278 $ 1,688 $ 1,186 $ (410) $ 502 Terminal services revenues 59,011 44,664 50,887 14,347 (6,223) Crude marketing revenues — — 8,210 — (8,210) Total revenues 60,289 46,352 60,283 13,937 (13,931) Expenses Operating expenses 56,417 48,255 53,072 8,162 (4,817) Acquisition and transaction expenses 64 — — 64 — Depreciation and amortization 39,318 36,013 29,034 3,305 6,979 Total expenses 95,799 84,268 82,106 11,531 2,162 Other (expense) income Loss on sale of assets, net — — (8) — 8 Loss on extinguishment of debt — — (4,724) — 4,724 Interest expense (24,798) (14,812) (9,426) (9,986) (5,386) Other (expense) income (4,317) (4,726) 92 409 (4,818) Total other expense (29,115) (19,538) (14,066) (9,577) (5,472) Loss before income taxes (64,625) (57,454) (35,889) (7,171) (21,565) Provision for income taxes 3,016 229 278 2,787 (49) Net loss (67,641) (57,683) (36,167) (9,958) (21,516) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (32,018) (26,250) (16,483) (5,768) (9,767) Net loss attributable to stockholders and Former Parent $ (35,623) $ (31,433) $ (19,684) $ (4,190) $ (11,749) 45 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2022 2021 2020 '22 vs ‘21 '21 vs '20 Net loss attributable to stockholders and Former Parent $ (35,623) $ (31,433) $ (19,684) $ (4,190) $ (11,749) Add: Provision for income taxes 3,016 229 278 2,787 (49) Add: Equity-based compensation expense 2,020 3,215 1,676 (1,195) 1,539 Add: Acquisition and transaction expenses 64 — — 64 — Add: Losses on the modification or extinguishment of debt and capital lease obligations — — 4,724 — (4,724) Add: Changes in fair value of non-hedge derivative instruments — — 181 — (181) Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 39,318 36,013 29,034 3,305 6,979 Add: Interest expense 24,798 14,812 9,426 9,986 5,386 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest costs on pension and OPEB liabilities — — — — — Less: Equity in losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA (1) (15,103) (12,205) (9,517) (2,898) (2,688) Adjusted EBITDA (non-GAAP) $ 18,490 $ 10,631 $ 16,118 $ 7,859 $ (5,487) __________________________________________________ (1) Includes the following items for the years ended December 31, 2022, 2021, and 2020: (i) equity-based compensation of $440, $723 and $352, (ii) provision for income taxes of $660, $52 and $59, (iii) interest expense of $5,416, $3,331 and $1,979, (iv) loss on extinguishment of debt of $—, $— and $992, (v) depreciation and amortization expense of $8,587, $8,099 and $6,097, and (vi) changes in fair value of non-hedge derivative instruments of $—, $— and $38 respectively.
Jefferson Terminal Segment The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Revenues Lease income $ 1,437 $ 1,278 $ 1,688 $ 159 $ (410) Terminal services revenues 70,709 59,011 44,664 11,698 14,347 Total revenues 72,146 60,289 46,352 11,857 13,937 Expenses Operating expenses 66,576 56,417 48,255 10,159 8,162 Acquisition and transaction expenses 1,370 64 — 1,306 64 Depreciation and amortization 48,916 39,318 36,013 9,598 3,305 Total expenses 116,862 95,799 84,268 21,063 11,531 Other income (expense) Gain on sale of assets, net 7,292 — — 7,292 — Interest expense (32,443) (24,798) (14,812) (7,645) (9,986) Other expense (1,302) (4,317) (4,726) 3,015 409 Total other expense (26,453) (29,115) (19,538) 2,662 (9,577) Loss before income taxes (71,169) (64,625) (57,454) (6,544) (7,171) Provision for income taxes 2,468 3,016 229 (548) 2,787 Net loss (73,637) (67,641) (57,683) (5,996) (9,958) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries (36,917) (32,018) (26,250) (4,899) (5,768) Net loss attributable to stockholders/Former Parent $ (36,720) $ (35,623) $ (31,433) $ (1,097) $ (4,190) 45 The following table sets forth a reconciliation of net loss attributable to stockholders and Former Parent to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs ‘22 '22 vs '21 Net loss attributable to stockholders/Former Parent $ (36,720) $ (35,623) $ (31,433) $ (1,097) $ (4,190) Add: Provision for income taxes 2,468 3,016 229 (548) 2787 Add: Equity-based compensation expense 5,865 2,020 3,215 3,845 (1,195) Add: Acquisition and transaction expenses 1,370 64 — 1,306 64 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense (1) 49,465 39,318 36,013 10,147 3,305 Add: Interest expense 32,443 24,798 14,812 7,645 9,986 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Add: Dividends and accretion of redeemable preferred stock — — — — — Add: Interest and other costs on pension and OPEB liabilities — — — — — Add: Other non-recurring items (2) 1,131 — — 1,131 — Less: Equity in losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA (3) (20,328) (15,103) (12,205) (5,225) (2,898) Adjusted EBITDA (Non-GAAP) $ 35,694 $ 18,490 $ 10,631 $ 17,204 $ 7,859 ______________________________________________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022, and 2021: (i) depreciation and amortization expense of $48,916, $39,318 and $36,013 and (ii) capitalized contract costs amortization of $549, $— and $—, respectively.
Other (expense) income Total other expense increased $0.5 million primarily due to an increase in interest expense for the period relating to the revolver loan. Adjusted EBITDA (non-GAAP) Adjusted EBITDA decreased $8.6 million due to the changes noted above.
Other income (expense) Total other expense increased $1.0 million primarily due to an increase in interest expense due to an increase in the borrowing rate on the revolver. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $4.7 million due to the changes noted above.
Results of Operations Adjusted EBITDA (non-GAAP) The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S.GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions.
Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.
We made principal payments of $240.0 million related to the Jefferson Terminal Revolver and the Series 2016 and 2012 Bonds. 54 Historical Cash Flow The following table presents our historical cash flow: Year Ended December 31, (in thousands) 2022 2021 2020 Cash flow data: Net cash used in operating activities $ (42,690) $ (61,716) $ (46,860) Net cash used in investing activities (267,266) (828,716) (252,216) Net cash provided by financing activities 157,743 1,136,866 337,628 Comparison of the years ended December 31, 2022 and 2021 Net cash used in operating activities decreased $19.0 million, which primarily reflects (i) an increase in net loss of $81.2 million, partially offset by (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $14.7 million, (iii) an increase in depreciation and amortization of $16.7 million, (iv) a change in equity in losses of unconsolidated entities of $53.9 million, and (v) an increase in deferred income taxes of $7.8 million.
Historical Cash Flow The following table presents our historical cash flow: Year Ended December 31, (in thousands) 2023 2022 2021 Cash Flow Data: Net cash provided by (used in) operating activities $ 5,513 $ (42,690) $ (61,716) Net cash used in investing activities (147,123) (267,266) (828,716) Net cash provided by financing activities 79,447 157,743 1,136,866 Comparison of the years ended December 31, 2023 and 2022 Net cash provided by operating activities increased $48.2 million, which primarily reflects (i) a decrease in net loss of $27.8 million, (ii) changes in accounts receivable, accounts payable and accrued liabilities, other assets and other liabilities of $46.5 million, (iii) an increase in depreciation and amortization of $10.2 million, (iv) an increase in equity-based compensation of $5.1 million, and (v) an increase in bad debt expense of $1.4 million, partially offset by (vi) a change in equity in losses of unconsolidated entities of $42.7 million.
Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $13.9 million during the year ended December 31, 2022 primarily due to an increase in terminal services revenues of $14.3 million due to higher volumes. This increase was partially offset by a decrease in lease income of $0.4 million.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $17.2 million primarily due to the changes noted above. 46 Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $13.9 million during the year ended December 31, 2022 primarily due to an increase in terminal services revenues of $14.3 million due to higher volumes.
Additionally, we review the carrying value of goodwill whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The determination of fair value involves significant management judgment. For an annual goodwill impairment assessment, an optional qualitative analysis may be performed.
The determination of fair value involves significant management judgment. For an annual goodwill impairment assessment, an optional qualitative analysis may be performed.
Comparison of the years ended December 31, 2022 and 2021 Expenses Total expenses increased $1.2 million primarily due to the acquisition and development of natural gas reserves.
Comparison of the years ended December 31, 2023 and 2022 Expenses Total expenses increased $1.5 million primarily due to an increase in professional fees.
If the estimated fair value of the reporting unit is less than the carrying amount, a goodwill impairment is recorded to the extent that the carrying value of the reporting unit exceeds the fair value. 56 As of October 1, 2022, we elected to complete a qualitative impairment assessment of the goodwill related to our Railroad reporting unit and concluded that it was more likely than not that the fair value of the Railroad reporting unit exceeded its carrying value.
As of October 1, 2023, we elected to complete a qualitative impairment assessment of the goodwill related to our Transtar and FYX reporting units and concluded that it was more likely than not that the fair value of the Transtar and FYX reporting units exceeded their respective carrying values. Therefore, no quantitative impairment evaluation was completed.
At October 1, 2022, approximately 4.3 million barrels of storage was operational with 1.9 million barrels under construction for new contracts that came online in December 2022 and completed our storage development for our main terminal. Our discount rate for our 2022 goodwill impairment analysis was 9.5% and our assumed terminal growth rate was 2.0%.
At October 1, 2023, approximately 6.2 million barrels of storage was operational. Our discount rate for our 2023 goodwill impairment analysis was 10.3% and our assumed terminal growth rate was 2.5%.
Other Cash Requirements —In addition to our contractual obligations, we intend to pay quarterly cash dividends on our common stock, which are subject to change at the discretion of our board of directors. 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 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.
(2) Includes the following items for the year ended December 31, 2022: (i) depreciation expense of $651. Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $47.9 million due to the acquisition of a majority stake and consolidation of FYX in May 2022.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased $1.5 million primarily due to the changes noted above. 53 Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $47.9 million due to the acquisition of a majority stake and consolidation of FYX in May 2022.
In December 2022, Transtar entered into a $25.0 million revolver agreement (the “Transtar Revolver”). Refer to Note 8 to the consolidated and combined consolidated financial statements for more information on our debt obligations.
Additionally, in December 2023, Repauno entered into an amendment to an existing revolver agreement (the “DRP Revolver”) that provides for revolving loans in the aggregate amount of an additional $25.0 million, for a total facility of $50.0 million. Refer to Note 7 to the consolidated and combined consolidated financial statements for more information on our debt obligations.
Our reportable segments are (i) Railroad, (ii) Jefferson Terminal, (iii) Repauno, (iv) Power and Gas and (v) Sustainability and Energy Transition. The Railroad segment is comprised of five freight railroads and one switching company that provide rail service to certain manufacturing and production facilities, in addition to KRS, a railcar cleaning operation.
The Railroad segment is comprised of six freight railroads and one switching company that provide rail service to certain manufacturing and production facilities, in addition to KRS, a railcar cleaning operation. The Jefferson Terminal segment consists of a multi-modal crude oil and refined products terminal, Jefferson Terminal South and other related assets.
Depreciation and amortization increased $22.9 million which primarily reflects (i) additional assets placed into service at Jefferson Terminal and Repauno and (ii) the acquisition of Transtar.
Depreciation and amortization increased $10.2 million which primarily reflects (i) additional assets placed into service at Jefferson Terminal and (ii) the acquisition and consolidation of FYX in May 2022. General and administrative increased $1.9 million primarily due to higher professional fees in the Corporate and Other segment.
The 2027 Notes bear interest at a rate of 10.500% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2022. Additionally, in November 2022, Jefferson Terminal entered into a new EB-5 loan agreement maximum aggregate principal amount available of $28.0 million (the “EB5.3 Loan Agreement”).
The 2027 Notes bear interest at a rate of 10.500% per annum, payable semi-annually in arrears on June 1 and December 1 of each year.
All segment data and related disclosures for earlier periods presented herein have been recast to reflect the new segment reporting structure. Our reportable segments represent strategic business units comprised of investments in different types of infrastructure assets. We have five reportable segments which operate in infrastructure businesses across several market sectors, all in North America.
Our reportable segments represent strategic business units comprised of investments in different types of infrastructure assets. We have five reportable segments which operate in infrastructure businesses across several market sectors, all in North America. Our reportable segments are (i) Railroad, (ii) Jefferson Terminal, (iii) Repauno, (iv) Power and Gas and (v) Sustainability and Energy Transition.
As of December 31, 2021, the carrying amount of goodwill within the Jefferson Terminal, Railroad and Corporate and Other segments was $122.7 million, $134.4 million, and $—, respectively. We review the carrying values of goodwill at least annually to assess impairment since these assets are not amortized. An annual impairment review is conducted as of October 1st of each year.
We review the carrying values of goodwill at least annually to assess impairment since these assets are not amortized. An annual impairment review is conducted as of October 1st of each year. Additionally, we review the carrying value of goodwill whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.
Net cash used in investing activities increased $576.5 million primarily due to (i) an increase in the acquisition of business, net of cash acquired for $627.1 million, (ii) an increase in the investment in unconsolidated entities of $50.5 million, and (iii) an increase in investment in convertible promissory notes of $10.0 million partially offset by (iv) an increase in proceeds from sale of property, plant and equipment of $4.5 million, and (v) a decrease in acquisitions of property, plant and equipment of $106.6 million.
Net cash used in investing activities decreased $120.1 million primarily due to (i) a decrease in acquisitions of property, plant and equipment of $118.1 million and (ii) a decrease in investment in convertible promissory notes of $11.4 million, partially offset by (iii) an increase in cash used for the acquisition of additional ownership interest in FYX of $0.6 million in 2023 as compared to 2022, (iv) an increase in the investment in unconsolidated entities of $1.1 million, (v) a decrease in the proceeds from sale of property, plant and equipment of $6.1 million and (vi) an increase in the acquisition of leasing equipment of $1.7 million. 55 Net cash provided by financing activities decreased $78.3 million primarily due to (i) a decrease in the proceeds from the issuance of Redeemable Preferred Stock of $274.6 million, (ii) a decrease in proceeds from debt of $337.7 million, (iii) repayment of debt proceeds of $75.1 million, (iv) cash dividends paid of $9.3 million, and (v) a decrease in settlement of equity-based compensation of $1.6 million, partially offset by (vi) a decrease in net transfers to Former Parent of $617.3 million and (vii) a decrease in payment of deferred financing costs of $4.8 million.
Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $27.3 million primarily due to the changes noted above. Comparison of the years ended December 31, 2021 and 2020 Revenues Rail revenue increased $57.1 million due to the acquisition of Transtar in July 2021. Crude marketing revenues decreased $8.2 million.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $16.7 million due to an increase in the pro-rata share of adjusted EBITDA from unconsolidated entities of $11.6 million, and the changes noted above. Comparison of the years ended December 31, 2022 and 2021 Expenses Total expenses increased $1.2 million primarily due to the acquisition and development of natural gas reserves.
Spin-Off of FTAI Infrastructure On August 1, 2022, FTAI distributed to the holders of FTAI common shares one share of FTAI Infrastructure Inc. common stock for each FTAI common share held by such shareholder at the close of business on July 21, 2022.
On August 1, 2022 (the “Spin-off Date”), FTAI distributed to the holders of FTAI common shares, one share of FTAI Infrastructure Inc. common stock for each FTAI common share held by such shareholder at the close of business on July 21, 2022 and we became an independent, publicly-traded company trading on The Nasdaq Global Select Market under the symbol “FIP.” Our operations consist of four primary business lines: (i) Railroad, (ii) Ports and Terminals, (iii) Power and Gas and (iv) Sustainability and Energy Transition.
As of December 31, 2022, we had total consolidated assets of $2.5 billion and total redeemable preferred stock and equity of $789.4 million.
As of December 31, 2023, we had total consolidated assets of $2.4 billion and redeemable preferred stock and equity of $0.7 billion. Operating Segments Prior to the third quarter of 2022, we operated as three reportable segments. During the third quarter of 2022, we reorganized our historical operating segments into five operating segments as described below.
Other (expense) income Total other expenses increased $14.2 million primarily due to increases in equity in losses in unconsolidated entities primarily due to unrealized losses on power swaps at Long Ridge.
Other (expense) income Total other expense decreased $57.6 million primarily due to decreases in equity in losses in unconsolidated entities primarily due to unrealized gains on power swaps at Long Ridge as power prices decreased, as well as increases in other income due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC.
Comparison of the years ended December 31, 2021 and 2020 Revenues Total revenues increased $7.8 million, primarily due to (i) an increase in butane sales of $5.2 million, (ii) a gain of $2.2 million on butane forward purchase contracts and (iii) an increase of $0.4 million due to the commencement of transloading.
Comparison of the years ended December 31, 2023 and 2022 Revenues Total revenues increased $11.9 million during the year ended December 31, 2023 primarily due to (i) an increase in terminal services revenues of $11.7 million due to an increase in average refined products throughput volumes and (ii) an increase in lease income of $0.2 million.
Management fees and incentive allocation to affiliate increased $2.6 million which reflects an increase in the base management fee as our average total equity was higher in 2021, primarily due to the acquisition of Transtar. Adjusted EBITDA (non-GAAP) 53 Adjusted EBITDA decreased $2.6 million primarily due to the changes noted above.
Other expense Total other expense increased $2.4 million which primarily reflects an increase in interest expense due to a higher outstanding balance on the revolver and an increase in interest rate during 2023. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $14.2 million due to the changes noted above.
Expenses Total expenses increased $12.9 million primarily due to: 48 • an increase in operating expenses of $5.3 million which primarily reflects increases in (i) property taxes due to new assets, (ii) facility operating expenses due to higher butane volumes, (iii) compensation and benefits due to additional headcount and (iv) professional fees; and • an increase in depreciation expense of $7.6 million due to assets being placed into service.
Expenses Total expenses increased $21.1 million which reflects: • an increase in operating expenses of $10.2 million primarily due to costs associated with equity-based compensation, higher labor and other costs, including repairs and maintenance, associated with increased terminal throughput activity; • an increase in depreciation and amortization of $9.6 million due to additional assets placed into service; and • an increase in acquisition and transaction expenses of $1.3 million associated with professional fees for a potential acquisition.
Other (expense) income Total other (expense) income increased $5.5 million which reflects: • 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; • an increase in other expense of $4.8 million due to losses related to crude oil forward transactions; and • a decrease in loss on extinguishment of debt of $4.7 million due to a debt refinancing in 2020.
Other income (expense) Total other expense decreased $2.7 million which primarily reflects (i) a benefit from the decrease in prior period losses related to the termination of a pipeline contract, (ii) a gain on the sales-type lease, and (iii) a gain from the sale of land, partially offset by an increase in interest expense due to additional borrowings for the EB-5 Loan Agreement.
Expenses Total expenses increased $2.2 million which reflects (i) an increase in depreciation and amortization of $7.0 million due to additional assets placed into service, partially offset by (ii) 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, partially offset by (ii) higher insurance and other facility operating expenses.
Expenses Total expenses increased $45.2 million primarily due to an increase in (i) operating expenses, (ii) depreciation and amortization and (iii) general and administrative expense, partially offset by a decrease in (iv) acquisition and transaction expenses.
Other (expense) income Total other expense increased $19.9 million which primarily reflects: • an increase in other expense of $9.0 million primarily due to (i) losses related to crude oil forward transactions at Jefferson Terminal and (ii) a write-off of an earn-out receivable related to the sale of a portion of our Long Ridge investment; • an increase in equity in losses of unconsolidated entities of $10.4 million which primarily reflects unrealized losses on power swaps at Long Ridge; • an increase in interest expense of $5.3 million due to the issuance of the Series 2021 Bonds for $425 million and the commencement of the EB-5 Loan Agreement; and • a decrease in loss on extinguishment of debt of $4.7 million due to a debt refinancing at Jefferson Terminal in 2020.
Other (expense) income Total other expense decreased $12.5 million which primarily reflects: • a decrease in equity in losses of unconsolidated entities of $42.7 million which primarily reflects unrealized gains on power swaps at Long Ridge partially offset by operating losses at GM-FTAI Holdco LLC in the Sustainability and Energy Transition segment; • an increase in gain on the sale of assets of $8.5 million due to a gain on a sales-type lease and a gain from the sale of land at Jefferson Terminal; and • an increase in other income of $9.8 million primarily due to interest income from a loan agreement entered into at the end of 2022 between the Company and Long Ridge Energy and Power LLC; partially offset by • an increase in interest expense of $46.4 million primarily due to an increase in the average outstanding debt of approximately $397.1 million which consists of (i) $327 million for the Senior Notes due 2027, (ii) $24.2 million for the Transtar Revolver, (iii) $25.5 million for the EB-5 Loan Agreement and (iv) $4.1 million for the Credit Agreement; and • an increase in loss on extinguishment of debt of $2.0 million due to repayment of amounts outstanding under the Transtar Revolver and Credit Agreement in full.
Comparison of the years ended December 31, 2021 and 2020 Other expense Other expense decreased $0.4 million primarily due to the investment in unconsolidated entities in the sustainability and energy transition sectors in the second half of 2021. Adjusted EBITDA (non-GAAP) Adjusted EBITDA decreased $0.4 million due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022 Other (expense) income Total other expense increased $7.4 million which reflects an increase of $7.8 million in equity in losses of unconsolidated entities primarily due to operating losses at GM-FTAI Holdco LLC, offset by an increase in other income of $0.4 million due to interest income earned on outstanding notes. 51 Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased $4.9 million primarily due to a decrease in the pro-rata share of adjusted EBITDA from unconsolidated entities of $5.3 million, and the changes noted above.
Comparison of the years ended December 31, 2021 and 2020 Expenses Total expenses decreased $2.2 million which primarily reflects a decrease in acquisition and transaction expense due to no acquisitions in 2021.
Comparison of the years ended December 31, 2023 and 2022 Revenues Total revenues increased $20.3 million primarily due to the acquisition and consolidation of FYX in May 2022, in addition to FYX price increases during the year.
Operating expenses increased $29.2 million primarily due to: • an increase of $29.8 million in the Railroad segment due to the acquisition of Transtar, which primarily consists of compensation and benefits and facility operating expenses; • an increase of $5.3 million at Repauno which primarily reflects increases in (i) property taxes due to new assets, (ii) facility operating expenses due to higher butane volumes, (iii) compensation and benefits due to additional headcount and (iv) professional fees; and • a decrease of $4.8 million at Jefferson Terminal 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, partially offset by (ii) higher insurance and other facility operating expenses. 41 Acquisition and transaction expenses increased $13.2 million primarily due to an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.
Operating expenses increased $45.5 million primarily due to: • an increase of $20.2 million in the Corporate and Other segment primarily due to the acquisition and consolidation of FYX in May 2022; 40 • an increase of $8.1 million in the Railroad segment primarily due to (i) an increase in labor and other costs associated with higher carload activity and severance costs at Transtar and (ii) an increase in repairs and maintenance expense due to increased activity at Transtar; • an increase of $5.1 million at Repauno which primarily reflects (i) an increase in compensation and benefits due to costs associated with equity-based compensation and (ii) an increase in labor costs and professional fees related to the continued development of the site; • an increase of $10.2 million at Jefferson Terminal which primarily reflects (i) an increase in compensation and benefits due to costs associated with equity-based compensation and (ii) an increase in repairs and maintenance expense due to increased activity at Jefferson Terminal; and • an increase of $1.9 million at Power and Gas primarily due to an increase in professional fees.
Removed
Former Parent became a subsidiary of FTAI Aviation Ltd., a Cayman Islands exempted company and the surviving parent company (“FTAI Aviation”), upon completion of the transactions contemplated in that certain Agreement and Plan of Merger (the “Merger”) on November 10, 2022, between Former Parent and FTAI Aviation and certain other parties thereto.
Added
During the first quarter of 2023, we modified our definition of Adjusted EBITDA to exclude the impact of other non-recurring items, such as severance expense. All segment data and related disclosures for earlier periods presented herein have been recast to reflect the new segment reporting structure.
Removed
Except as otherwise specified, prior to the Merger, “FTAI” refers to Former Parent and, following the Merger, “FTAI” refers to FTAI Aviation, in each case including their consolidated subsidiaries.
Added
Our Manager On May 22, 2023, Fortress and Mubadala announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe are monitoring related reform proposals and evaluating the related risks and, as a result of LIBOR’s phase out, amended our revolving credit facility to incorporate the Secured Overnight Financing Rate (“SOFR”) as the successor rate to LIBOR; however, it is not possible to predict the effects of any of these developments, and any future initiatives to regulate, reform or change the manner of administration of LIBOR, SOFR or other benchmark indices could result in adverse consequences to the rate of interest payable and receivable on, market value of and market liquidity for financial instruments tied to variable interest rate indices.
Biggest changeWe are monitoring related reform proposals and evaluating the related risks; however, it is not possible to predict the effects of any of these developments, and any future initiatives to regulate, reform or change the manner of administration of benchmark indices could result in adverse consequences to the rate of interest payable and receivable on, market value of and market liquidity for financial instruments tied to variable interest rate indices.
Some of our borrowing agreements require payments based on a variable interest rate index, such as SOFR. Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our leases.
Some of our borrowing agreements require payments based on a variable interest rate index, such as Secured Overnight Financing Rate (“SOFR”). Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our leases.
As of December 31, 2022, assuming we do not hedge our exposure to interest rate fluctuations related to our outstanding floating rate debt, a hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would result in an increase of approximately $0.4 million or a decrease of approximately $0.4 million in interest expense, respectively, over the next 12 months. 58
As of December 31, 2023, assuming we do not hedge our exposure to interest rate fluctuations related to our outstanding floating rate debt, a hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would result in an increase of ap proximately $1.3 million or a decrease of approximately $1.3 million in interest expense over the next 12 months.
We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposure relates to our term loan arrangements.
We are exposed to changes in the level of interest rates and to 58 changes in the relationship or spread between interest rates. Our primary interest rate exposure relates to our term loan arrangements. Indices which are deemed “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform.
Removed
The London Interbank Offered Rate (“LIBOR”) and other indices which are deemed “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform. The ICE Benchmark Administration ceased publication of one-week and two-month USD LIBOR settings after December 31, 2021 and intends to cease publishing the remaining USD LIBOR settings after June 30, 2023.

Other FIP 10-K year-over-year comparisons