FTAI Aviation Ltd. Reports Third Quarter 2023 Results, Declares Dividend of $0.30 per Ordinary Share

NEW YORK, Oct. 25, 2023 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the third quarter 2023. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.

Financial Overview

(in thousands, except per share data)
Selected Financial ResultsQ3’23
Net Income Attributable to Shareholders$32,973
Basic Earnings per Ordinary Share from Continuing Operations$0.33
Diluted Earnings per Ordinary Share from Continuing Operations$0.33
Adjusted EBITDA(1)$154,218

_______________________________
(1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

Third Quarter 2023 Dividends

On October 25, 2023, the Company’s Board of Directors (the “Board”) declared a cash dividend on FTAI’s ordinary shares of $0.30 per share for the quarter ended September 30, 2023, payable on November 28, 2023 to the holders of record on November 14, 2023.

Additionally, on October 25, 2023, the Board declared cash dividends on FTAI’s Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”), Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”), Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”) and Fixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares (“Series D Preferred Shares”) of $0.51563, $0.50000, $0.51563 and $0.59375 per share, respectively, for the quarter ended September 30, 2023, payable on December 15, 2023 to the holders of record on December 1, 2023.

Business Highlights

  • $107.1 million Aerospace Products revenue in Q3 2023 generating $40.6 million of Adjusted EBITDA(1) at a 38% margin.
  • 41 modules sold in Q3’23 to 11 unique customers including 2 new customers and 9 repeat customers.
  • Generated $492 million year to date positive free cashflow available for asset acquisition & investment activity.
  • Closed on 23 Engines & 10 Aircraft at attractive prices to help generate future growth in Aviation Leasing Adjusted EBITDA(1).

    (1)  For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Center section of the Company’s website, https://www.ftaiaviation.com, and the Company’s Quarterly Report on Form 10-Q, when available on the Company’s website. Nothing on the Company’s website is included or incorporated by reference herein.

Conference Call

In addition, management will host a conference call on Thursday, October 26, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BIc75f7efaa03d41108edf9a7cf4d4ec2f. Once registered, participants will receive a dial-in and unique pin to access the call.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at https://www.ftaiaviation.com/. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A replay of the conference call will be available after 11:30 A.M. on Thursday, October 26, 2023 through 11:30 A.M. on Thursday, November 2, 2023 on https://ir.ftaiaviation.com/news-events/presentations.

The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and should not be considered a part of, this press release.

About FTAI Aviation Ltd.

FTAI owns and maintains commercial jet engines with a focus on CFM56 engines. FTAI’s propriety portfolio of products, including The Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to our airline, lessor, and maintenance, repair, and operations customer base. Additionally, FTAI owns and leases jet aircraft which often facilitates the acquisition of engines at attractive prices. FTAI invests in aviation assets and aerospace products that generate strong and stable cash flows with the potential for earnings growth and asset appreciation.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftaiaviation.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

For further information, please contact:

Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
aandreini@fortress.com


Exhibit - Financial Statements
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2023  2022   2023   2022 
Revenues       
Lease income$45,622 $50,198  $161,141  $129,163 
Maintenance revenue 63,925  35,507   141,131   112,171 
Asset sales revenue 72,990  85,488   283,167   85,488 
Aerospace products revenue 107,085  53,401   260,273   94,211 
Other revenue 1,474  5,771   12,447   13,087 
Total revenues 291,096  230,365   858,159   434,120 
Expenses       
Cost of sales 116,707  95,948   366,909   120,139 
Operating expenses 33,887  27,393   81,218   108,197 
General and administrative 3,015  3,354   10,270   11,821 
Acquisition and transaction expenses 4,261  2,848   10,195   8,340 
Management fees and incentive allocation to affiliate 4,577  4   13,137   4 
Depreciation and amortization 43,959  34,853   123,399   115,461 
Asset impairment   4,495   1,220   128,171 
Interest expense 40,185  40,171   117,976   132,197 
Total expenses 246,591  209,066   724,324   624,330 
Other income (expense)       
Equity in earnings (losses) of unconsolidated entities 46  (358)  (1,669)  (125)
Gain on sale of assets, net         79,933 
Loss on extinguishment of debt   (19,861)     (19,861)
Other income (expense) 461  (1,038)  877   208 
Total other income (expense) 507  (21,257)  (792)  60,155 
Income (loss) from continuing operations before income taxes 45,012  42   133,043   (130,055)
Provision for income taxes 3,705  4,189   7,586   7,357 
Net income (loss) from continuing operations 41,307  (4,147)  125,457   (137,412)
Net loss from discontinued operations, net of income taxes   (14,782)     (101,416)
Net income (loss) 41,307  (18,929)  125,457   (238,828)
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries:       
Continuing operations          
Discontinued operations   (2,871)     (18,817)
Less: Dividends on preferred shares 8,334  6,791   23,460   20,373 
Net income (loss) attributable to shareholders$32,973 $(22,849) $101,997  $(240,384)
        


 Three Months Ended
September 30,
  Nine Months Ended
September 30,

 2023  2022  2023 2022 
Earnings (loss) per share:       
Basic       
Continuing operations$0.33 $(0.11) $1.02 $(1.59)
Discontinued operations$ $(0.12) $ $(0.83)
Diluted       
Continuing operations$0.33 $(0.11) $1.02 $(1.59)
Discontinued operations$ $(0.12) $ $(0.83)
Weighted average shares outstanding:       
Basic 99,927,594  99,378,771   99,796,736  99,372,016 
Diluted 100,482,309  99,378,771   100,269,203  99,372,016 


  FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
  
 (Unaudited)   
 September 30, 2023 December 31, 2022 
Assets    
Cash and cash equivalents$52,879  $33,565  
Restricted cash    19,500  
Accounts receivable, net 107,825   99,443  
Leasing equipment, net 1,924,198   1,913,553  
Property, plant, and equipment, net 13,454   10,014  
Investments 39,868   22,037  
Intangible assets, net 41,471   41,955  
Inventory, net 274,832   163,676  
Other assets 179,259   125,834  
Total assets$2,633,786  $2,429,577  
     
Liabilities    
Accounts payable and accrued liabilities$108,579  $86,452  
Debt, net 2,279,330   2,175,727  
Maintenance deposits 61,497   78,686  
Security deposits 39,901   32,842  
Other liabilities 49,417   36,468  
Total liabilities$2,538,724  $2,410,175  
     
Commitments and contingencies    
     
Equity    
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 100,238,075 and 99,716,621 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively)$1,002  $997  
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 15,920,000 and 13,320,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) 159   133  
Additional paid in capital 293,512   343,350  
Accumulated deficit (200,145)  (325,602) 
Shareholders' equity 94,528   18,878  
Non-controlling interest in equity of consolidated subsidiaries 534   524  
Total equity 95,062   19,402  
Total liabilities and equity$2,633,786  $2,429,577  


FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)
 Nine Months Ended September 30,
  2023   2022 
Cash flows from operating activities:   
Net income (loss)$125,457  $(238,828)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:   
Equity in losses of unconsolidated entities 1,669   46,727 
Gain on sale of assets, net (110,511)  (106,427)
Security deposits and maintenance claims included in earnings (34,458)  (31,558)
Loss on extinguishment of debt    19,861 
Equity-based compensation 1,128   2,623 
Depreciation and amortization 123,399   155,780 
Asset impairment 1,220   128,171 
Change in deferred income taxes 5,974   14,923 
Change in fair value of non-hedge derivative    (1,567)
Change in fair value of guarantees (1,677)   
Amortization of lease intangibles and incentives 33,685   30,315 
Amortization of deferred financing costs 6,429   17,142 
Provision for credit losses 6,583   47,226 
Other (995)  (693)
Change in:   
Accounts receivable (34,358)  (61,892)
Inventory (4,845)  (13,370)
Other assets (3,727)  (23,576)
Accounts payable and accrued liabilities 321   4,329 
Management fees payable to affiliate 824   (2,530)
Other liabilities 648   (7,955)
Net cash provided by (used in) operating activities 116,766   (21,299)
    
Cash flows from investing activities:   
Investment in unconsolidated entities (19,500)  (7,344)
Principal collections on notes receivable 2,438    
Principal collections on finance leases 3,624   2,165 
Acquisition of business, net of cash acquired    (3,819)
Acquisition of leasing equipment (506,923)  (360,642)
Acquisition of property, plant and equipment (3,906)  (138,750)
Acquisition of lease intangibles (10,474)  (6,542)
Investment in promissory notes (11,500)   
Purchase deposits for acquisitions (10,533)  (28,621)
Proceeds from sale of leasing equipment 366,065   262,096 
Proceeds from sale of property, plant and equipment    5,289 
(Refunds) proceeds for deposit on sale of aircraft and engine (683)  7,801 
Return of purchase deposits 300    
Net cash used in investing activities$(191,092) $(268,367)
    
Cash flows from financing activities:   
Proceeds from debt$430,000  $503,980 
Repayment of debt (330,000)  (984,529)
Payment of deferred financing costs (1,805)  (18,151)
Receipt of security deposits 7,355   2,636 
Return of security deposits (2,385)  (941)
Receipt of maintenance deposits 22,747   37,586 
Release of maintenance deposits (275)  (878)
Capital contributions from non-controlling interests 10   1,187 
Settlement of equity-based compensation    (148)
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 61,729    
Dividend from spin-off of FTAI Infrastructure, net of cash transferred    500,562 
Cash dividends - ordinary shares (89,776)  (98,584)
Cash dividends - preferred shares (23,460)  (20,373)
Net cash provided by (used in) financing activities$74,140  $(77,653)
    
Net decrease in cash and cash equivalents and restricted cash (186)  (367,319)
Cash and cash equivalents and restricted cash, beginning of period 53,065   440,061 
Cash and cash equivalents and restricted cash, end of period$52,879  $72,742 


Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure.

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

The following table sets forth a reconciliation of net income (loss) attributable to shareholders from continuing operations to Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022:

 Three Months Ended
September 30,
 Change
 Nine Months Ended
September 30,
 Change
(in thousands) 2023   2022    2023  2022  
Net income (loss) attributable to shareholders from continuing operations$32,973  $(10,938) $43,911  $101,997 $(157,785) $259,782 
Add: Provision for income taxes 3,705   4,189   (484)  7,586  7,357   229 
Add: Equity-based compensation expense 510      510   1,128     1,128 
Add: Acquisition and transaction expenses 4,261   2,848   1,413   10,195  8,340   1,855 
Add: Losses on the modification or extinguishment of debt and capital lease obligations    19,861   (19,861)    19,861   (19,861)
Add: Changes in fair value of non-hedge derivative instruments                
Add: Asset impairment charges    4,495   (4,495)  1,220  128,171   (126,951)
Add: Incentive allocations 4,274      4,274   12,540     12,540 
Add: Depreciation and amortization expense(1) 59,380   41,329   18,051   157,084  145,754   11,330 
Add: Interest expense and dividends on preferred shares 48,519   46,962   1,557   141,436  152,570   (11,134)
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities(2) 642   (241)  883   96  165   (69)
Less: Equity in (earnings) losses of unconsolidated entities (46)  358   (404)  1,669  125   1,544 
Less: Non-controlling share of Adjusted EBITDA                
Adjusted EBITDA (non-GAAP)$154,218  $108,863  $45,355  $434,951 $304,558  $130,393 

___________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022: (i) depreciation and amortization expense of $43,959 and $34,853, (ii) lease intangible amortization of $3,726 and $3,291 and (iii) amortization for lease incentives of $11,695 and $3,185, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) depreciation and amortization expense of $123,399 and $115,461, (ii) lease intangible amortization of $11,325 and $10,259 and (iii) amortization for lease incentives of $22,360 and $20,034, respectively.

(2) Includes the following items for the three months ended September 30, 2023 and 2022: (i) net income (loss) of $46 and $(358), (ii) depreciation and amortization expense of $367 and $117 and (iii) acquisition and transaction expense of $229 and $0, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) net loss of $1,669 and $125, (ii) depreciation and amortization expense of $1,202 and $290 and (iii) acquisition and transaction expense of $563 and $0, respectively.


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