FTAI Infrastructure Inc.FIP
FTAI Infrastructure Inc. Income Taxes Disclosure
INCOME TAXES
The current and deferred components of the income tax provision (benefit) included in the Consolidated Statements of Operations are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | — | $ | (1) | $ | 7 | |||||||||||
| State and local | 2,446 | 1,394 | 447 | ||||||||||||||
| Total current provision | 2,446 | 1,393 | 454 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (4,468) | (256) | 1,082 | ||||||||||||||
| State and local | (1,296) | 2,176 | 934 | ||||||||||||||
| Total deferred provision | (5,764) | 1,920 | 2,016 | ||||||||||||||
| Total: | |||||||||||||||||
| Federal | (4,468) | (257) | 1,089 | ||||||||||||||
| State and local | 1,150 | 3,570 | 1,381 | ||||||||||||||
| Total provision | $ | (3,318) | $ | 3,313 | $ | 2,470 | |||||||||||
Taxable income or loss generated by us and our corporate subsidiaries is subject to U.S. federal and state corporate income tax in locations where they conduct business.
A valuation allowance has been established against our net U.S. federal and state deferred tax assets, including net operating loss carryforwards. As a result, our income tax provision is primarily related to separate company state taxes, deferred taxes for tax deductible goodwill, and deferred taxes for certain long-lived assets.
Our effective tax rate differs from the U.S. federal tax rate of 21% primarily due to an increase in the valuation allowances against a significant portion of the deferred tax assets of our corporate subsidiaries, the effects of the derecognition of a deferred tax liability for an equity method investment upon obtaining control of such entity, and the reclassification of certain tax benefits from Accumulated other comprehensive loss. The tax benefit for the year ended December 31, 2025 included a reclassification of the taxes from Accumulated other comprehensive loss in the Consolidated Balance Sheet to (Benefit from) provision for income taxes in the Consolidated Statements of Operations resulting from the acquisition of Long Ridge Energy & Power LLC in February 2025.
The Company has elected to prospectively adopt the guidance in ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, or ASU 2023-09. The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the year ended December 31, 2025, in accordance with ASU 2023-09:
| Year Ended December 31, 2025 | |||||||||||
| Amount | Percent | ||||||||||
| $ | (32,405) | 21.00 | % | ||||||||
| Nontaxable or nondeductible items: | |||||||||||
| Nontaxable earnings from equity investment | (1,937) | 1.26 | % | ||||||||
| Nondeductible transaction costs | 2,195 | (1.42) | % | ||||||||
| Other | (1,075) | 0.70 | % | ||||||||
| Valuation allowance | 55,297 | (35.83) | % | ||||||||
| Other: | |||||||||||
| Tax effects of acquiring control of Long Ridge Energy & Power LLC | (21,054) | 13.65 | % | ||||||||
| Deferred tax remeasurement | (5,497) | 3.56 | % | ||||||||
| Other | 522 | (0.35) | % | ||||||||
State and local income taxes, net of federal income tax (1) | 636 | (0.41) | % | ||||||||
| Provision for income taxes | $ | (3,318) | 2.16 | % | |||||||
______________________________________________________________________________________
(1) State taxes in Pennsylvania, Texas and Indiana made up the majority (greater than 50%) of the tax effect in this category.
The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the years ended December 31, 2024 and 2023:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. federal tax at statutory rate | 21.00 | % | 21.00 | % | |||||||
| State and local taxes | (1.11) | % | 1.79 | % | |||||||
| Noncontrolling interest | (1.66) | % | (2.17) | % | |||||||
Deferred adjustment | (5.17) | % | (3.71) | % | |||||||
| Other | 0.33 | % | (0.61) | % | |||||||
| Change in valuation allowance | (14.65) | % | (17.88) | % | |||||||
| Provision for income taxes | (1.26) | % | (1.58) | % | |||||||
Significant components of our deferred tax assets and liabilities are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 268,055 | $ | 189,612 | |||||||
| Accrued expenses | 21,933 | 13,331 | |||||||||
| Interest expense | 128,152 | 84,348 | |||||||||
| Operating lease liabilities | 13,544 | 84,774 | |||||||||
Derivative | 97,043 | — | |||||||||
| Investment in partnerships | 20,470 | 14,894 | |||||||||
| Other | 27,517 | 19,062 | |||||||||
| Total deferred tax assets | 576,714 | 406,021 | |||||||||
| Less valuation allowance | (304,055) | (249,223) | |||||||||
| Net deferred tax assets | 272,659 | 156,798 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Fixed assets and goodwill | (461,321) | (73,458) | |||||||||
| Operating lease right-of-use assets | (85,722) | (72,664) | |||||||||
Other | (24,969) | (20,315) | |||||||||
Net deferred tax liabilities | $ | (299,353) | $ | (9,639) | |||||||
Deferred tax assets and liabilities are reported net in Other assets or Other liabilities in the Consolidated Balance Sheets. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. We have analyzed our deferred tax assets and have determined, based on the weight of available evidence, that it is more likely than not that a significant portion will not be realized. Accordingly, valuation allowances have been recognized as of December 31, 2025, 2024, and 2023 of $304.1 million, $249.2 million, and $215.1 million, respectively, related to certain deductible temporary differences and net operating loss carryforwards.
A summary of the changes in the valuation allowance is as follows:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Valuation allowance at beginning of period | $ | 249,223 | $ | 215,082 | $ | 214,003 | |||||||||||
| Change in current year | 54,832 | 34,141 | 1,079 | ||||||||||||||
| Valuation allowance at end of period | $ | 304,055 | $ | 249,223 | $ | 215,082 | |||||||||||
As of December 31, 2025, certain of our corporate subsidiaries had U.S. federal and state net operating loss carryforwards of approximately $1.2 billion and $290.8 million, respectively, that are available to offset future taxable income. In regards to federal net operating loss carryforwards, $168.5 million of these carryforwards will begin to expire in the year 2032 and $1.0 billion of these carryforwards have no expiration date. As for state and local net operating loss carryforwards, $279.0 million of these carryforwards will begin to expire in the year 2028, while $12.0 million have no expiration date. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the relevant corporate subsidiary's ability to generate sufficient taxable income prior to the expiration of the carryforward period, if any. In addition, the maximum annual use of net operating loss carryforwards may be limited after certain changes in stock ownership.
As of and for the year ended December 31, 2025, we had not established a liability for uncertain tax positions as no such positions existed. In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S. federal, state and local income tax examinations by tax authorities. Generally, we are not subject to examination by taxing authorities for tax years prior to 2021.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant changes to the U.S. federal tax law, such as an elective deduction for domestic research and experimental expenditures, and changes to interest expense limitations under Internal Revenue Code section 163(j). We have incorporated these amendments into the income tax provision which did not have a material impact on the Company’s effective tax rate.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 27, 2024 | |
| 2022 | Mar 9, 2023 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.