DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

3. DISCONTINUED OPERATIONS

FTAI Infrastructure Inc. (“FTAI Infrastructure”) Spin-Off

On April 28, 2022, the Board of Directors of the Company unanimously approved the previously announced spin-off of the Company’s infrastructure business held by FTAI Infrastructure (a wholly owned subsidiary of the Company). The spin-off was effected as a distribution of all of the shares owned by the Company of common stock of FTAI Infrastructure to the holders of the Company’s ordinary shares as of July 21, 2022. The distribution was completed on August 1, 2022. Under ASC 205-20, Presentation of Financial Statements – Discontinued Operations, the spin-off met the criteria to be reported as a discontinued operation. Therefore, FTAI Infrastructure is presented as a discontinued operation within the Company’s financial statements for the three months ended March 31, 2022.

FTAI Infrastructure is a corporation for U.S. federal income tax purposes and holds, among other things, the Company’s previously held interests in the (i) Jefferson Terminal business, (ii) Repauno business, (iii) Long Ridge investment, and (iv) Transtar business. FTAI Infrastructure retained all related project-level debt of those businesses. In connection with the spin-off, FTAI Infrastructure paid a dividend of $730.3 million to the Company. The Company used these proceeds to repay all outstanding borrowings under its 2021 bridge loans, $200.0 million of its 6.50% senior unsecured notes due 2025, and approximately $175.0 million of the outstanding borrowings under its revolving credit facility. FTAI LLC retained the aviation business and certain other assets, and FTAI LLC’s remaining outstanding corporate indebtedness.

In connection with the spin-off, the Company and the Manager assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Manager executed an amended and restated agreement. The Company and certain of its subsidiaries executed a new management agreement with the Manager. The new management agreement has an initial term of six years. The Manager is entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Manager, which were assigned to FTAI Infrastructure. Prior to the Merger described below, our Manager remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off. Following the Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), pursuant to which Master GP is entitled to incentive payments on substantially similar terms as the previous arrangements.

Financial Information of Discontinued Operations

The following table presents the significant components of net loss from discontinued operations:

	Three Months Ended
	March 31, 2022
Revenues
Total revenues	$	46,148
Expenses
Operating expenses	38,067
General and administrative expenses	1,130
Acquisition and transaction expenses	3,751
Management fees and incentive allocation to affiliate	4,161
Depreciation and amortization	16,996
Interest expense	6,459
Total expenses	70,564
Equity in losses of unconsolidated entities	(24,211)
Other income	69
Total other expense	(24,142)
Loss before income taxes	(48,558)
Provision for income taxes	2,147
Net loss from discontinued operations, net of income taxes	(50,705)
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries	(7,466)
Net loss attributable to shareholders	(43,239)

The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows for the three months ended March 31, 2022. The following table summarizes depreciation and amortization, capital expenditures, and other significant operating and investing noncash items from discontinued operations:

	Three Months Ended
	March 31, 2022
Operating activities:
Equity in losses of unconsolidated entities	$	24,211
Depreciation and amortization	16,996
Equity-based compensation	709
Investing activities:
Acquisition of property, plant and equipment	$	(52,546)
Investment in unconsolidated entities	(1,637)
Proceeds from sale of property, plant and equipment	2,910
Non-cash change in equity method investment	(94,779)

The Company accounted for Long Ridge Terminal LLC, included in discontinued operations for the three months ended March 31, 2022 included above, using the equity method of accounting. Summarized financial data for Long Ridge Terminal LLC are shown in the following table.

	Three Months Ended
Income Statement	March 31, 2022
Total revenue	$	24,411
Expenses
Operating expenses	12,447
Depreciation and amortization	12,544
Interest expense	12,861
Total expenses	37,852
Other expense	(29,234)
Net loss	$	(42,675)