FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today
reported financial results for the fourth quarter and full year
2022. 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
Results |
Q4’22 |
Net Income Attributable to Shareholders |
$ |
20,010 |
|
Basic Earnings per
Ordinary Share for Continuing Operations |
$ |
0.20 |
|
Diluted Earnings per
Ordinary Share for Continuing Operations |
$ |
0.20 |
|
Adjusted EBITDA(1) |
$ |
123,539 |
|
_______________________________(1) For
definitions and reconciliations of non-GAAP measures, please refer
to the exhibit to this press release.
Fourth Quarter 2022
Dividends
On February 23, 2023, the Company’s Board of
Directors (the “Board”) declared a cash dividend on its ordinary
shares of $0.30 per share for the quarter ended December 31, 2022,
payable on March 22, 2023 to the holders of record on March 10,
2023.
Additionally, on February 23, 2023, the Board
declared cash dividends on its 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”)
and Fixed-Rate Reset Series C Cumulative Perpetual Redeemable
Preferred Shares (“Series C Preferred Shares”) of $0.51563,
$0.50000 and $0.51563 per share, respectively, for the quarter
ended December 31, 2022, payable on March 15, 2023 to the holders
of record on March 7, 2023.
Business Highlights
FTAI purchased $298mm of assets in Q4 comprised
of 16 aircraft and 19 engines. In addition, FTAI sold non-core
aviation assets, comprised of 8 aircraft/airframes and 18 engines,
generating net proceeds of $123mm.
“With green time severely depleted and the
supply chain unable to service engines on a timely basis, airlines
are struggling to find power,” said Joe Adams, FTAI’s CEO.
“New aircraft delivery delays are driving
airlines to extend the lives of their 737NG and A320ceo fleets,
which further increases CFM56 flight hours.”
“With airlines experiencing record high CASM
(cost per available seat mile), maintenance cost-saving products
and practices are in high demand. We believe our suite of propriety
products is allowing us to add and retain customers across the
entire ecosystem of users, owners, and maintenance providers.”
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, www.ir.ftaiaviation.com, and the Company’s Annual Report
on Form 10-K, when available on the Company’s website. Nothing on
the Company’s website is included or incorporated by reference
herein.
Conference Call
The Company will host a conference call on Friday, February
24, 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/BI68b0c783afb44b589fdfbb0fe47182a5.
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 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 Friday, February 24, 2023 through 11:30 A.M. on Friday,
March 3, 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 JV to manufacture
engine PMA, enables it to provide cost savings and flexibility to
our airline, lessor, and MRO 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 AndreiniInvestor RelationsFTAI Aviation
Ltd.(646) 734-9414aandreini@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 December 31 |
|
Year Ended December 31, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenues |
$ |
274,291 |
|
|
$ |
98,231 |
|
|
$ |
708,411 |
|
|
$ |
335,583 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Cost of sales |
|
128,246 |
|
|
|
5,731 |
|
|
|
248,385 |
|
|
|
14,308 |
|
Operating expenses |
|
24,067 |
|
|
|
25,424 |
|
|
|
132,264 |
|
|
|
59,615 |
|
General and
administrative |
|
2,343 |
|
|
|
3,831 |
|
|
|
14,164 |
|
|
|
13,448 |
|
Acquisition and transaction
expenses |
|
4,867 |
|
|
|
5,285 |
|
|
|
13,207 |
|
|
|
17,911 |
|
Management fees and incentive
allocation to affiliate |
|
3,558 |
|
|
|
(21 |
) |
|
|
3,562 |
|
|
|
684 |
|
Depreciation and
amortization |
|
37,456 |
|
|
|
41,366 |
|
|
|
152,917 |
|
|
|
147,740 |
|
Asset impairment |
|
9,048 |
|
|
|
7,415 |
|
|
|
137,219 |
|
|
|
10,463 |
|
Interest expense |
|
36,997 |
|
|
|
39,419 |
|
|
|
169,194 |
|
|
|
155,017 |
|
Total expenses |
|
246,582 |
|
|
|
128,450 |
|
|
|
870,912 |
|
|
|
419,186 |
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
Equity in losses of
unconsolidated entities |
|
(244 |
) |
|
|
(353 |
) |
|
|
(369 |
) |
|
|
(1,403 |
) |
(Loss) gain on sale of assets,
net |
|
(2,722 |
) |
|
|
31,548 |
|
|
|
77,211 |
|
|
|
49,015 |
|
Gain (loss) on extinguishment
of debt |
|
2 |
|
|
|
— |
|
|
|
(19,859 |
) |
|
|
(3,254 |
) |
Other (expense) income |
|
(1 |
) |
|
|
227 |
|
|
|
207 |
|
|
|
(490 |
) |
Total other (expense)
income |
|
(2,965 |
) |
|
|
31,422 |
|
|
|
57,190 |
|
|
|
43,868 |
|
Income (loss) from
continuing operations before income taxes |
|
24,744 |
|
|
|
1,203 |
|
|
|
(105,311 |
) |
|
|
(39,735 |
) |
(Benefit from) provision for
income taxes |
|
(2,057 |
) |
|
|
2,302 |
|
|
|
5,300 |
|
|
|
3,126 |
|
Net income (loss) from continuing operations |
|
26,801 |
|
|
|
(1,099 |
) |
|
|
(110,611 |
) |
|
|
(42,861 |
) |
Net loss from discontinued operations, net of income taxes |
|
— |
|
|
|
(18,680 |
) |
|
|
(101,416 |
) |
|
|
(87,845 |
) |
Net income
(loss) |
|
26,801 |
|
|
|
(19,779 |
) |
|
|
(212,027 |
) |
|
|
(130,706 |
) |
Less: Net income (loss)
attributable to non-controlling interests in consolidated
subsidiaries: |
|
|
|
|
|
|
|
Continuing operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Discontinued operations |
|
— |
|
|
|
(7,523 |
) |
|
|
(18,817 |
) |
|
|
(26,472 |
) |
Less: Dividends on preferred
shares |
|
6,791 |
|
|
|
6,791 |
|
|
|
27,164 |
|
|
|
24,758 |
|
Net income (loss)
attributable to shareholders |
$ |
20,010 |
|
|
$ |
(19,047 |
) |
|
$ |
(220,374 |
) |
|
$ |
(128,992 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.20 |
|
|
$ |
(0.08 |
) |
|
$ |
(1.39 |
) |
|
$ |
(0.75 |
) |
Discontinued operations |
$ |
— |
|
|
$ |
(0.11 |
) |
|
$ |
(0.83 |
) |
|
$ |
(0.68 |
) |
Diluted |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.20 |
|
|
$ |
(0.08 |
) |
|
$ |
(1.39 |
) |
|
$ |
(0.75 |
) |
Discontinued operations |
$ |
— |
|
|
$ |
(0.11 |
) |
|
$ |
(0.83 |
) |
|
$ |
(0.68 |
) |
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
99,566,387 |
|
|
|
99,224,907 |
|
|
|
99,421,008 |
|
|
|
89,922,088 |
|
Diluted |
|
100,180,524 |
|
|
|
99,224,907 |
|
|
|
99,421,008 |
|
|
|
89,922,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FTAI AVIATION
LTD.CONSOLIDATED BALANCE SHEETS
(Unaudited)(Dollar amounts in thousands, except share and
per share data)
|
December 31, |
|
2022 |
|
2021 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
33,565 |
|
|
$ |
138,206 |
|
Restricted cash |
|
19,500 |
|
|
|
— |
|
Accounts receivable, net |
|
99,443 |
|
|
|
124,924 |
|
Leasing equipment, net |
|
1,913,553 |
|
|
|
1,855,637 |
|
Property, plant, and
equipment, net |
|
10,014 |
|
|
|
38,263 |
|
Investments |
|
22,037 |
|
|
|
22,917 |
|
Intangible assets, net |
|
41,955 |
|
|
|
30,962 |
|
Inventory, net |
|
163,676 |
|
|
|
100,307 |
|
Other assets |
|
125,834 |
|
|
|
110,337 |
|
Assets of discontinued
operations |
|
— |
|
|
|
2,442,301 |
|
Total assets |
$ |
2,429,577 |
|
|
$ |
4,863,854 |
|
|
|
|
|
Liabilities |
|
|
|
Accounts payable and accrued
liabilities |
$ |
86,452 |
|
|
$ |
87,035 |
|
Debt, net |
|
2,175,727 |
|
|
|
2,501,587 |
|
Maintenance deposits |
|
78,686 |
|
|
|
106,836 |
|
Security deposits |
|
32,842 |
|
|
|
40,149 |
|
Other liabilities |
|
36,468 |
|
|
|
23,892 |
|
Liabilities of discontinued
operations |
|
— |
|
|
|
980,255 |
|
Total liabilities |
$ |
2,410,175 |
|
|
$ |
3,739,754 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Ordinary shares ($0.01 par
value per share; 2,000,000,000 shares authorized; 99,716,621 and
99,180,385 shares issued and outstanding as of December 31, 2022
and 2021, respectively) |
$ |
997 |
|
|
$ |
992 |
|
Preferred shares ($0.01 par
value per share; 200,000,000 shares authorized; 13,320,000 and
13,320,000 shares issued and outstanding as of December 31, 2022
and 2021, respectively) |
|
133 |
|
|
|
133 |
|
Additional paid in
capital |
|
343,350 |
|
|
|
1,411,940 |
|
Accumulated deficit |
|
(325,602 |
) |
|
|
(132,392 |
) |
Accumulated other
comprehensive loss |
|
— |
|
|
|
(156,381 |
) |
Shareholders' equity |
|
18,878 |
|
|
|
1,124,292 |
|
Non-controlling interest in
equity of consolidated subsidiaries |
|
524 |
|
|
|
(192 |
) |
Total equity |
$ |
19,402 |
|
|
$ |
1,124,100 |
|
Total liabilities and
equity |
$ |
2,429,577 |
|
|
$ |
4,863,854 |
|
|
|
|
|
|
|
|
|
FTAI AVIATION
LTD.CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(Dollar amounts in thousands, unless otherwise
noted)
|
Year Ended December 31, |
|
2022 |
|
2021 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(212,027 |
) |
|
$ |
(130,706 |
) |
Adjustments to reconcile net
loss to net cash (used in) provided by operating activities: |
|
|
|
Equity in losses of
unconsolidated entities |
|
46,971 |
|
|
|
12,734 |
|
Gain on sale of assets,
net |
|
(141,677 |
) |
|
|
(49,031 |
) |
Security deposits and
maintenance claims included in earnings |
|
(41,845 |
) |
|
|
(39,067 |
) |
Loss on extinguishment of
debt |
|
19,859 |
|
|
|
3,254 |
|
Equity-based compensation |
|
2,623 |
|
|
|
4,038 |
|
Depreciation and
amortization |
|
193,236 |
|
|
|
201,756 |
|
Asset impairment |
|
137,219 |
|
|
|
10,463 |
|
Change in deferred income
taxes |
|
2,161 |
|
|
|
(2,057 |
) |
Change in fair value of
non-hedge derivatives |
|
(1,567 |
) |
|
|
(2,220 |
) |
Amortization of lease
intangibles and incentives |
|
37,135 |
|
|
|
27,978 |
|
Amortization of deferred
financing costs |
|
19,018 |
|
|
|
21,723 |
|
Provision for credit
losses |
|
47,975 |
|
|
|
12,953 |
|
Other |
|
(1,010 |
) |
|
|
(440 |
) |
Change in: |
|
|
|
Accounts receivable |
|
(65,969 |
) |
|
|
(88,872 |
) |
Other assets |
|
(23,037 |
) |
|
|
(30,789 |
) |
Inventory |
|
(23,267 |
) |
|
|
— |
|
Accounts payable and accrued liabilities |
|
(19,599 |
) |
|
|
25,079 |
|
Management fees payable to affiliate |
|
804 |
|
|
|
1,042 |
|
Other liabilities |
|
2,340 |
|
|
|
118 |
|
Net cash used in
operating activities |
|
(20,657 |
) |
|
|
(22,044 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Investment in unconsolidated
entities |
|
(7,344 |
) |
|
|
(54,655 |
) |
Principal collections on
finance leases |
|
2,227 |
|
|
|
7,387 |
|
Acquisition of business, net
of cash acquired |
|
(3,819 |
) |
|
|
(627,090 |
) |
Acquisition of leasing
equipment |
|
(638,329 |
) |
|
|
(572,624 |
) |
Acquisition of property, plant
and equipment |
|
(144,196 |
) |
|
|
(157,332 |
) |
Acquisition of lease
intangibles |
|
(31,127 |
) |
|
|
(24,017 |
) |
Investment in convertible
promissory notes |
|
— |
|
|
|
(10,000 |
) |
Purchase deposit for
acquisitions |
|
(6,671 |
) |
|
|
(13,658 |
) |
Proceeds from sale of leasing
equipment |
|
408,937 |
|
|
|
158,927 |
|
Proceeds from sale of
property, plant and equipment |
|
5,289 |
|
|
|
4,494 |
|
Proceeds for deposit on sale
of aircraft and engine |
|
3,780 |
|
|
|
600 |
|
Return of purchase
deposits |
|
— |
|
|
|
1,010 |
|
Net cash used in
investing activities |
$ |
(411,253 |
) |
|
$ |
(1,286,958 |
) |
|
Year Ended December 31, |
|
2022 |
|
2021 |
Cash flows from
financing activities: |
|
|
|
Proceeds from debt |
$ |
813,980 |
|
|
$ |
2,894,127 |
|
Repayment of debt |
|
(1,144,529 |
) |
|
|
(1,553,231 |
) |
Payment of deferred financing
costs |
|
(18,607 |
) |
|
|
(52,739 |
) |
Receipt of security
deposits |
|
3,882 |
|
|
|
8,770 |
|
Return of security
deposits |
|
(2,141 |
) |
|
|
(1,201 |
) |
Receipt of maintenance
deposits |
|
47,846 |
|
|
|
31,507 |
|
Release of maintenance
deposits |
|
(1,471 |
) |
|
|
(20,724 |
) |
Proceeds from issuance of
ordinary shares, net of underwriter's discount |
|
— |
|
|
|
323,124 |
|
Proceeds from issuance of
preferred shares, net of underwriter's discount and issuance
costs |
|
— |
|
|
|
101,200 |
|
Capital contributions from
non-controlling interests |
|
1,187 |
|
|
|
— |
|
Dividend from spin-off of FTAI
Infrastructure, net of cash transferred |
|
500,562 |
|
|
|
— |
|
Settlement of equity-based
compensation |
|
(148 |
) |
|
|
(421 |
) |
Cash dividends - ordinary
shares |
|
(128,483 |
) |
|
|
(118,009 |
) |
Cash dividends - preferred
shares |
|
(27,164 |
) |
|
|
(24,758 |
) |
Net cash provided by
financing activities |
|
44,914 |
|
|
|
1,587,645 |
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents and restricted
cash |
|
(386,996 |
) |
|
|
278,643 |
|
Cash and cash equivalents and
restricted cash, beginning of period |
|
440,061 |
|
|
|
161,418 |
|
Cash and cash
equivalents and restricted cash, end of period |
$ |
53,065 |
|
|
$ |
440,061 |
|
|
|
|
|
|
|
|
|
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 loss attributable to shareholders to Adjusted EBITDA for the
three and twelve months ended December 31, 2022 and 2021:
|
Three Months Ended December 31 |
|
Year Ended December 31, |
(in thousands) |
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income (loss) attributable to shareholders from
continuing operations |
$ |
20,010 |
|
|
$ |
(7,890 |
) |
|
$ |
(137,775 |
) |
|
$ |
(67,619 |
) |
Add: Provision for (benefit
from) income taxes |
|
(2,057 |
) |
|
|
2,302 |
|
|
|
5,300 |
|
|
|
3,126 |
|
Add: Equity-based compensation
expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Add: Acquisition and
transaction expenses |
|
4,867 |
|
|
|
5,285 |
|
|
|
13,207 |
|
|
|
17,911 |
|
Add: Losses on the
modification or extinguishment of debt and capital lease
obligations |
|
(2 |
) |
|
|
— |
|
|
|
19,859 |
|
|
|
3,254 |
|
Add: Changes in fair value of
non-hedge derivative instruments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Add: Asset impairment
charges |
|
9,048 |
|
|
|
7,415 |
|
|
|
137,219 |
|
|
|
10,463 |
|
Add: Incentive
allocations |
|
3,489 |
|
|
|
— |
|
|
|
3,489 |
|
|
|
— |
|
Add: Depreciation &
amortization expense(1) |
|
44,277 |
|
|
|
47,995 |
|
|
|
190,031 |
|
|
|
175,718 |
|
Add: Interest expense and
dividends on preferred shares |
|
43,788 |
|
|
|
46,210 |
|
|
|
196,358 |
|
|
|
179,775 |
|
Add: Pro-rata share of
Adjusted EBITDA from unconsolidated entities(2) |
|
(125 |
) |
|
|
(297 |
) |
|
|
40 |
|
|
|
(1,203 |
) |
Less: Equity in losses of
unconsolidated entities |
|
244 |
|
|
|
353 |
|
|
|
369 |
|
|
|
1,403 |
|
Less: Non-controlling share of
Adjusted EBITDA |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted EBITDA
(non-GAAP) |
$ |
123,539 |
|
|
$ |
101,373 |
|
|
$ |
428,097 |
|
|
$ |
322,828 |
|
__________________________________________________
(1) |
Includes the following items for the three months ended December
31, 2022 and 2021: (i) depreciation and amortization expense of
$37,456 and $41,366, (ii) lease intangible amortization of $3,654
and $1,777 and (iii) amortization for lease incentives of $3,167
and $4,852, respectively. |
|
Includes the following items for the years ended December 31, 2022
and 2021: (i) depreciation and amortization expense of $152,917 and
$147,740, (ii) lease intangible amortization of $13,913 and $4,993
and (iii) amortization for lease incentives of $23,201 and $22,985,
respectively. |
(2) |
Includes the following items for the three months ended December
31, 2022 and 2021: (i) net loss of $(244) and $(353),
(ii) depreciation and amortization expense of $119 and $56,
respectively. |
|
Includes the following items for the years ended December 31, 2022
and 2021: (i) net loss of $(369) and $(1,403),
(ii) depreciation and amortization expense of $409 and $200,
respectively. |
|
|
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