FTAI Aviation Ltd. Reports Fourth Quarter 2022 Results, Declares Dividend of $0.30 per Ordinary Share
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 |
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(1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.
Fourth Quarter 2022 Dividends
On
Additionally, on
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
“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
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
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 owns and maintains commercial jet engines with a focus on CFM56 engines. FTAI’s propriety portfolio of products, including
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:
Investor Relations
(646) 734-9414
aandreini@fortress.com
Exhibit - Financial Statements
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
Three Months Ended |
Year Ended |
||||||||||||||
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 | |||||||||||
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
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 ( |
$ | 997 | $ | 992 | |||
Preferred shares ( |
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 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)
Year Ended |
|||||||
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 |
|||||||
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
Three Months Ended |
Year Ended |
||||||||||||||
(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 |
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(1) | Includes the following items for the three months ended |
Includes the following items for the years ended |
|
(2) | Includes the following items for the three months ended |
Includes the following items for the years ended |
|
Source: FTAI Aviation Ltd.