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May 02, 2019
FTAI Reports First Quarter 2019 Results, Dividend of $0.33 per Common Share

NEW YORK, May 02, 2019 (GLOBE NEWSWIRE) -- Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company”) today reported financial results for the three months ended March 31, 2019. 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 Q1’19
Net Cash Provided by Operating Activities $ 20,270  
Net Loss Attributable to Shareholders $ (6,380 )
Basic and Diluted Loss per Share $ (0.07 )
   
Funds Available for Distribution (“FAD”) (1) $ 70,183  
Adjusted EBITDA(1) $ 66,290  

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

For the first quarter of 2019, our total FAD was $70.2 million. This amount includes $101.1 million from aviation leasing activities, offset by $(4.1) million and $(26.8) million from infrastructure and corporate and other activities, respectively.

First Quarter 2019 Dividend

On May 2, 2019, the Company’s Board of Directors declared a cash dividend on its common shares of $0.33 per share for the quarter ended March 31, 2019, payable on May 28, 2019 to the holders of record on May 17, 2019.

“Considering our net loss attributable to shareholders, we achieved our best adjusted EBITDA quarter ever with infrastructure again being a positive EBITDA contributor.  In addition, this was also our best quarter from a value creation perspective.  We increased our products and relationships in our value add engine leasing business, including a new partnership with United Airlines, grew contractual relationships at Jefferson Terminal, signed long-term offtakes at Long Ridge energy terminal and we are seeing strong customer demand for terminal services at Repauno,” said Joe Adams, the Company’s CEO.

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of the Company’s website, www.ftandi.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

The Company will host a conference call on Friday, May 3, 2019 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing 1-877-447-5636 (from within the U.S.) or 1-615-247-0080 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “FTAI First Quarter Earnings Call.” A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.ftandi.com.

Following the call, a replay of the conference call will be available after 12:00 P.M. on Friday, May 3, 2019 through midnight Friday, May 10, 2019 at 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.), Passcode: 5076638.

About Fortress Transportation and Infrastructure Investors LLC

Fortress Transportation and Infrastructure Investors LLC owns and acquires high quality infrastructure and equipment that is essential for the transportation of goods and people globally. FTAI targets assets that, on a combined basis, generate strong and stable cash flows with the potential for earnings growth and asset appreciation. FTAI is externally managed by an affiliate of Fortress Investment Group LLC, a leading, diversified global investment firm.

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 including, but not limited to, statements regarding future value creation. 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 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftandi.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
Fortress Transportation and Infrastructure Investors LLC
(212) 798-6128
aandreini@fortress.com

Withholding Information for Withholding Agents

This announcement is intended to be a qualified notice as provided in the Internal Revenue Code (the “Code”) and the Regulations thereunder. For U.S. federal income tax purposes, the dividend declared in May 2019 will be treated as a partnership distribution.  For tax withholding purposes, the per share distribution components are as follows:

Distribution Components  
Non-U.S. Long Term Capital Gain $
U.S. Portfolio Interest Income(1) $ 0.1100
U.S. Dividend Income(2) $
Income Not from U.S. Sources(3) $ 0.2200
Distribution Per Share  $ 0.3300

(1) Eligible for the U.S. portfolio interest exemption for any holder not considered a 10-percent shareholder under §871(h)(3)(B) of the Code.

(2) This income is subject to withholding under §1441 of the Code.

(3) This income is not subject to withholding under §1441 or §1446 of the Code.

For U.S. shareholders: In computing your U.S. federal taxable income, you should not rely on this qualified notice, but should generally take into account your allocable share of the Company’s taxable income as reported to you on your Schedule K-1.

   
Exhibit - Financial Statements  
   
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
   
  Three Months Ended March 31,
(Dollar amounts in thousands, except share and per share data) 2019   2018
Revenues      
Equipment leasing revenues $ 72,452     $ 55,784  
Infrastructure revenues 52,175     13,060  
Total revenues 124,627     68,844  
       
Expenses      
Operating expenses 61,918     27,579  
General and administrative 4,732     3,586  
Acquisition and transaction expenses 1,474     1,766  
Management fees and incentive allocation to affiliate 3,838     3,739  
Depreciation and amortization 39,533     29,587  
Interest expense 21,303     11,871  
Total expenses 132,798     78,128  
       
Other income (expense)      
Equity in (losses) earnings of unconsolidated entities (384 )   95  
Gain (loss) on sale of equipment, net 1,725     (5 )
Interest income 91     176  
Other (expense) income (2,604 )   180  
Total other (expense) income (1,172 )   446  
       
Loss before income taxes (9,343 )   (8,838 )
Provision for income taxes 453     495  
Net loss (9,796 )   (9,333 )
Less:  Net loss attributable to non-controlling interests in consolidated subsidiaries (3,416 )   (8,761 )
Net loss attributable to shareholders $ (6,380 )   $ (572 )
       
Loss per share      
Basic $ (0.07 )   $ (0.01 )
Diluted $ (0.07 )   $ (0.01 )
       
Weighted Average Shares Outstanding:      
Basic 85,986,453     81,534,454  
Diluted 85,986,453     81,534,454  


         
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED BALANCE SHEETS
    (Unaudited)    
(Dollar amounts in thousands, except share and per share data)   March 31, 2019   December 31, 2018
Assets        
Cash and cash equivalents   $ 120,515     $ 99,601  
Restricted cash   108,058     21,236  
Accounts receivable, net   50,586     53,789  
Leasing equipment, net   1,471,794     1,432,210  
Operating lease right-of-use assets, net   44,241      
Finance leases, net   21,158     18,623  
Property, plant, and equipment, net   788,668     708,853  
Investments   39,778     40,560  
Intangible assets, net   35,604     38,513  
Goodwill   116,584     116,584  
Other assets   150,714     108,809  
Total assets   $ 2,947,700     $ 2,638,778  
         
Liabilities        
Accounts payable and accrued liabilities   $ 97,415     $ 112,188  
Debt, net   1,540,017     1,237,347  
Maintenance deposits   166,749     158,163  
Security deposits   38,638     38,539  
Operating lease liabilities   44,719      
Other liabilities   87,108     38,759  
Total liabilities   $ 1,974,646     $ 1,584,996  
         
Commitments and contingencies        
         
Equity        
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 84,477,791 and 84,050,889 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively)   845     840  
Additional paid in capital   1,001,223     1,029,376  
Accumulated deficit   (39,197 )   (32,817 )
Accumulated other comprehensive loss   (43,012 )    
Shareholders' equity   919,859     997,399  
Non-controlling interest in equity of consolidated subsidiaries   53,195     56,383  
Total equity   973,054     1,053,782  
Total liabilities and equity   $ 2,947,700     $ 2,638,778  


   
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollar amounts in thousands, unless otherwise noted)
   
  Three Months Ended March 31,
  2019   2018
Cash flows from operating activities:      
Net loss $ (9,796 )   $ (9,333 )
Adjustments to reconcile net loss to net cash provided by operating activities:      
Equity in losses (earnings) of unconsolidated entities 384     (95 )
(Gain) loss on sale of equipment, net (1,725 )   5  
Security deposits and maintenance claims included in earnings (2,953 )   (383 )
Equity-based compensation 228     208  
Depreciation and amortization 39,533     29,587  
Change in current and deferred income taxes 338     504  
Change in fair value of non-hedge derivative 3,220     (624 )
Amortization of lease intangibles and incentives 8,334     7,226  
Amortization of deferred financing costs 2,025     1,151  
Bad debt expense 2,950     1,441  
Other 221     9  
Change in:      
Accounts receivable (1,127 )   (7,387 )
Other assets (5,295 )   1,176  
Accounts payable and accrued liabilities (14,348 )   (9,768 )
Management fees payable to affiliate (1,158 )   (1,300 )
Other liabilities (561 )   (947 )
Net cash provided by operating activities 20,270     11,470  
       
Cash flows from investing activities:      
Investment in notes receivable     (912 )
Investment in unconsolidated entities and available for sale securities     (1,115 )
Principal collections on finance leases 1,289     129  
Acquisition of leasing equipment (108,919 )   (86,043 )
Acquisition of property, plant and equipment (81,241 )   (23,641 )
Acquisition of lease intangibles (589 )   (1,029 )
Purchase deposits for acquisitions (4,625 )   (6,886 )
Proceeds from sale of leasing equipment 27,292     6,136  
Proceeds from sale of property, plant and equipment 7     38  
Return of capital distributions from unconsolidated entities 398      
Return of purchase deposit for aircraft and aircraft engines     240  
Return of deposit on sale of engine     (400 )
Net cash used in investing activities   (166,388 )     (113,483 )
Cash flows from financing activities:      
Proceeds from debt   352,680       18,600  
Repayment of debt (47,222 )   (12,612 )
Payment of deferred financing costs (28,611 )   (71 )
Receipt of security deposits 1,935     1,864  
Return of security deposits (233 )   (700 )
Receipt of maintenance deposits 13,495     9,720  
Release of maintenance deposits (9,807 )   (1,840 )
Proceeds from issuance of common shares, net of underwriter's discount     128,450  
Common shares issuance costs     (132 )
Cash dividends (28,383 )   (27,333 )
Net cash provided by financing activities   253,854       115,946  
       
Net increase in cash and cash equivalents and restricted cash 107,736     13,933  
Cash and cash equivalents and restricted cash, beginning of period 120,837     92,806  
Cash and cash equivalents and restricted cash, end of period $ 228,573     $ 106,739  
               

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, 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, 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 months ended March 31, 2019 and 2018:

  Three Months Ended March 31,
(in thousands) 2019   2018
Net loss attributable to shareholders $ (6,380 )   $ (572 )
Add: Provision for income taxes 453     495  
Add: Equity-based compensation expense 228     208  
Add: Acquisition and transaction expenses 1,474     1,766  
Add: Losses on the modification or extinguishment of debt and capital lease obligations      
Add: Changes in fair value of non-hedge derivative instruments 3,220     624  
Add: Asset impairment charges      
Add: Incentive allocations 162      
Add: Depreciation and amortization expense (1) 47,867     36,814  
Add: Interest expense 21,303     11,871  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) (118 )   175  
Less: Equity in losses (earnings) of unconsolidated entities 384     (95 )
Less: Non-controlling share of Adjusted EBITDA (3) (2,303 )   (3,165 )
Adjusted EBITDA (non-GAAP) $ 66,290     $ 48,121  

___________________________________________

(1) Includes the following items for the three months ended March 31, 2019 and 2018: (i) $39,533 and $29,587 of depreciation and amortization expense, (ii) $2,462 and $1,992 of lease intangible amortization and (iii) $5,872 and $5,235 of amortization for lease incentives, respectively.

(2) Includes the following items for the three months ended March 31, 2019 and 2018: (i) net (loss) income of $(420) and $48, (ii) interest expense of $36 and $112 and (iii) depreciation and amortization expense of $266 and $15, respectively.

(3) Includes the following items for the three months ended March 31, 2019 and 2018: (i) equity based compensation of $25 and $37, (ii) provision for income taxes of $36 and $4, (iii) interest expense of $899 and $1,292, (iv) depreciation and amortization expense of $1,164 and $2,076 and (v) changes in fair value of non-hedge derivative instruments of $179 and $(244), respectively.

We use Funds Available for Distribution (“FAD”) in evaluating our ability to meet our stated dividend policy. FAD is not a financial measure in accordance with GAAP. The GAAP measure most directly comparable to FAD is net cash provided by operating activities. We believe FAD is a useful metric for investors and analysts for similar purposes.

We define FAD as: net cash provided by operating activities plus principal collections on finance leases, proceeds from sale of assets, and return of capital distributions from unconsolidated entities, less required payments on debt obligations and capital distributions to non-controlling interest, and excludes changes in working capital.

The following table sets forth a reconciliation of Net Cash provided by Operating Activities to FAD for the three months ended March 31, 2019 and 2018:

  Three Months Ended March 31,
(in thousands) 2019   2018
Net Cash Provided by Operating Activities $ 20,270     $ 11,470  
Add: Principal Collections on Finance Leases 1,289     129  
Add: Proceeds from Sale of Assets 27,299     6,174  
Add: Return of Capital Distributions from Unconsolidated Entities 398      
Less: Required Payments on Debt Obligations (1) (1,562 )   (1,562 )
Less: Capital Distributions to Non-Controlling Interest      
Exclude: Changes in Working Capital 22,489     18,226  
Funds Available for Distribution (FAD) $ 70,183     $ 34,437  

___________________________________________

(1) Required payments on debt obligations for the three months ended March 31, 2019 exclude repayments of $40,000 for the Revolving Credit Facility and $5,660 for the CMQR Credit Agreement, and for the three months ended March 31, 2018 exclude repayment of $11,050 for the CMQR Credit Agreement, all of which were voluntary refinancings as repayments of these amounts were not required at such time.

The following tables set forth a reconciliation of FAD to Net Cash provided by Operating Activities for the three months ended March 31, 2019:

  Three Months Ended March 31, 2019
(in thousands) Aviation
Leasing
  Infrastructure   Corporate and
Other
  Total
Funds Available for Distribution (FAD) $ 101,141     $ (4,185 )   $ (26,773 )   $ 70,183  
Less: Principal Collections on Finance Leases             (1,289 )
Less: Proceeds from Sale of Assets             (27,299 )
Less: Return of Capital Distributions from Unconsolidated Entities             (398 )
Add: Required Payments on Debt Obligations (1)             1,562  
Add: Capital Distributions to Non-Controlling Interest              
Include: Changes in Working Capital             (22,489 )
Net Cash provided by Operating Activities             $ 20,270  

(1) Required payments on debt obligations for the three months ended March 31, 2019 exclude repayments of $40,000 for the Revolving Credit Facility and $5,660 for the CMQR Credit Agreement, both of which were voluntary refinancings as repayments of these amounts were not required at such time.

FAD is subject to a number of limitations and assumptions and there can be no assurance that the Company will generate FAD sufficient to meet its intended dividends. FAD has material limitations as a liquidity measure of the Company because such measure excludes items that are required elements of the Company’s net cash provided by operating activities as described below. FAD should not be considered in isolation nor as a substitute for analysis of the Company’s results of operations under GAAP, and it is not the only metric that should be considered in evaluating the Company’s ability to meet its stated dividend policy. Specifically:

  • FAD does not include equity capital called from the Company’s existing limited partners, proceeds from any debt issuance or future equity offering, historical cash and cash equivalents and expected investments in the Company’s operations.
  • FAD does not give pro forma effect to prior acquisitions, certain of which cannot be quantified.
  • While FAD reflects the cash inflows from sale of certain assets, FAD does not reflect the cash outflows to acquire assets as the Company relies on alternative sources of liquidity to fund such purchases.
  • FAD does not reflect expenditures related to capital expenditures, acquisitions and other investments as the Company has multiple sources of liquidity and intends to fund these expenditures with future incurrences of indebtedness, additional capital contributions and/or future issuances of equity.
  • FAD does not reflect any maintenance capital expenditures necessary to maintain the same level of cash generation from our capital investments.
  • FAD does not reflect changes in working capital balances as management believes that changes in working capital are primarily driven by short term timing differences, which are not meaningful to the Company’s distribution decisions.
  • Management has significant discretion to make distributions, and the Company is not bound by any contractual provision that requires it to use cash for distributions.

If such factors were included in FAD, there can be no assurance that the results would be consistent with the Company’s presentation of FAD.

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Source: Fortress Transportation and Infrastructure Investors LLC

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