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Press Release Details

FTAI Aviation Ltd. Reports Fourth Quarter 2022 Results, Declares Dividend of $0.30 per Ordinary Share

Feb 23, 2023

NEW YORK, Feb. 23, 2023 (GLOBE NEWSWIRE) -- 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 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 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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Source: FTAI Aviation Ltd.