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Feb 25, 2021
FTAI Reports Fourth Quarter and Full Year 2020 Results, Dividend of $0.33 per Common Share

NEW YORK, Feb. 25, 2021 (GLOBE NEWSWIRE) -- Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company” or “FTAI”) today reported financial results for the quarter and full year ended December 31, 2020. 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 Q4’20   FY20
Net Cash Provided by Operating Activities $ 34,713     $ 63,106  
Net Loss Attributable to Shareholders $ (60,523 )   $ (105,039 )
Basic and Diluted Loss per Common Share $ (0.70 )   $ (1.24 )
               
Funds Available for Distribution (“FAD”) (1) $ 54,216     $ 237,418  
Adjusted EBITDA(1) $ 46,203     $ 243,306  

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

For the fourth quarter of 2020, total FAD was $54.2 million. This amount includes $89.9 million from our aviation leasing portfolio, offset by $(1.8) million from our infrastructure business and $(33.9) million from corporate and other.

Fourth Quarter 2020 Dividends

On February 25, 2021, the Company’s Board of Directors (the “Board”) declared a cash dividend on its common shares of $0.33 per share for the quarter ended December 31, 2020, payable on March 23, 2021 to the holders of record on March 12, 2021.

Additionally, on February 25, 2021, the Board declared cash dividends on its Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”) and Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”) of $0.51563 and $0.50000 per share, respectively, for the quarter ended December 31, 2020, payable on March 15, 2021 to the holders of record on March 8, 2021.

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 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 26, 2021 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing (877) 447-5636 (from within the U.S.) or (615) 247-0080 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “FTAI 2020 Fourth 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 11:30 A.M. on Friday, February 26, 2021 through 11:30 A.M. on Friday, March 5, 2021 at (855) 859-2056 (from within the U.S.) or (404) 537-3406 (from outside of the U.S.), Passcode: 4656159.

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. 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.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 common dividend and the Series A Preferred and Series B Preferred dividends declared in February 2021 will be treated as a partnership distribution and guaranteed payments, respectively. For U.S. tax withholding purposes, the per share distribution components are as follows:

Common Distribution Components  
Non-U.S. Long Term Capital Gain $  
U.S. Portfolio Interest Income(1) $ 0.04003  
U.S. Dividend Income(2) $  
Income Not from U.S. Sources(3) $ 0.28997  
U.S. Long Term Capital Gain (4)                   $  
Distribution Per Share
$ 0.33000  


Series A Preferred Distribution Components  
Guaranteed Payments(5) $ 0.51563  
Distribution Per Share
$ 0.51563  


Series B Preferred Distribution Components  
Guaranteed Payments(5) $ 0.50000  
Distribution Per Share
$ 0.50000  

(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 or §1442 of the Code.

(3) This income is not subject to withholding under §1441, §1442 or §1446 of the Code.

(4) U.S. Long Term Capital Gain attributable to the sale of a U.S. Real Property Holding Corporation. As a result, the gain will be treated as income that is effectively connected with a U.S. trade or business and be subject to withholding.                        

(5) Brokers and nominees should treat this income as subject to withholding under §1441 or §1442 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)
(Dollar amounts in thousands, except per share data)

  Three Months Ended December 31,   Year Ended December 31,
  2020   2019   2020   2019
Revenues              
Equipment leasing revenues $ 61,852     $ 110,411     $ 297,934      $ 349,322  
Infrastructure revenues 13,786     50,921     68,562      229,452  
Total revenues 75,638     161,332     366,496      578,774  
               
Expenses              
Operating expenses 28,368     68,760     109,512      291,572  
General and administrative 4,867     3,635     18,159      16,905  
Acquisition and transaction expenses 571     8,498     9,868      17,623  
Management fees and incentive allocation to affiliate 4,406     19,133     18,519      36,059  
Depreciation and amortization 45,857     44,843     172,400      169,023  
Asset impairment 19,587     4,726     33,978      4,726  
Interest expense 26,647     24,267     98,206      95,585  
Total expenses 130,303     173,862     460,642      631,493  
               
Other (expense) income              
Equity in earnings (losses) of unconsolidated entities 406     (848 )   (5,039 )   (2,375 )
Gain (loss) on sale of assets, net 1,857     141,850     (308 )   203,250  
Loss on extinguishment of debt (6,943 )       (11,667 )    
Interest income 41     79     162      531  
Other income (expense) 38     (20 )   70      3,445  
Total other (expense) income (4,601 )   141,061     (16,782 )   204,851  
(Loss) income from continuing operations before income taxes (59,266 )   128,531     (110,928 )   152,132  
Provision for (benefit from) income taxes 429     18,999     (5,905 )   17,810  
Net (loss) income from continuing operations (59,695 )   109,532     (105,023 )   134,322  
Net income from discontinued operations, net of income taxes     71,579     1,331      73,462  
Net (loss) income (59,695 )   181,111     (103,692 )   207,784  
Less: Net (loss) income attributable to non-controlling interests in consolidated subsidiaries:              
Continuing operations (3,798 )   (4,520 )   (16,522 )   (17,571 )
Discontinued operations     146     —      247  
Less: Dividends on preferred shares 4,626     1,838     17,869      1,838  
Net (loss) income attributable to shareholders $ (60,523 )   $ 183,647     $ (105,039 )   $ 223,270  
               
(Loss) earnings per share:              
Basic              
Continuing operations $ (0.70 )   $ 1.30     $ (1.24 )   $ 1.74  
Discontinued operations $ 0.00     $ 0.83     $ 0.02      $ 0.85  
Diluted              
Continuing operations $ (0.70 )   $ 1.30     $ (1.24 )   $ 1.74  
Discontinued operations $ 0.00     $ 0.83     $ 0.02      $ 0.85  
Weighted average shares outstanding:              
Basic 86,022,302     85,997,619     86,015,702      85,992,019  
Diluted 86,022,302     86,090,207     86,015,702      86,029,363  
                       
                       

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except per share data)

  December 31,
  2020   2019
Assets      
Cash and cash equivalents $ 121,703     $ 226,512  
Restricted cash 39,715     16,005  
Accounts receivable, net 91,691     49,470  
Leasing equipment, net 1,635,259     1,707,059  
Operating lease right-of-use assets, net 62,355     37,466  
Finance leases, net 6,927     8,315  
Property, plant, and equipment, net 964,363     732,109  
Investments 146,515     180,550  
Intangible assets, net 18,786     27,692  
Goodwill 122,735     122,639  
Other assets 177,928     129,105  
Total assets $ 3,387,977     $ 3,236,922  
       
Liabilities      
Accounts payable and accrued liabilities $ 113,185     $ 144,855  
Debt, net 1,904,762     1,420,928  
Maintenance deposits 148,293     208,944  
Security deposits 37,064     45,252  
Operating lease liabilities 62,001     36,968  
Other liabilities 23,351     41,118  
Total liabilities $ 2,288,656     $ 1,898,065  
       
Commitments and contingencies      
       
Equity      
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 85,617,146 and 84,917,448 shares issued and outstanding as of December 31, 2020 and 2019, respectively) $ 856     $ 849  
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 9,120,000 and 8,050,000 shares issued and outstanding as of December 31, 2020 and 2019, respectively) 91     81  
Additional paid in capital 1,130,106     1,110,122  
(Accumulated deficit) retained earnings (28,158 )   190,453  
Accumulated other comprehensive (loss) income (26,237 )   372  
Shareholders' equity 1,076,658     1,301,877  
Non-controlling interest in equity of consolidated subsidiaries 22,663     36,980  
Total equity $ 1,099,321     $ 1,338,857  
Total liabilities and equity $ 3,387,977     $ 3,236,922  
               

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)

  Year Ended December 31,
  2020   2019
Cash flows from operating activities:      
Net (loss) income $ (103,692 )   $ 207,784  
Adjustments to reconcile net (loss) income to cash provided by operating activities:      
Equity in losses of unconsolidated entities 5,039     2,375  
Gain on sale of subsidiaries (1,331 )   (198,764 )
Loss (gain) on sale of assets, net 308     (81,954 )
Security deposits and maintenance claims included in earnings (6,362 )   (20,385 )
Loss on extinguishment of debt 11,667      
Equity-based compensation 2,325     8,404  
Depreciation and amortization 172,400     171,225  
Asset impairment 33,978     4,726  
Change in deferred income taxes (5,851 )   14,495  
Change in fair value of non-hedge derivatives 181     4,555  
Amortization of lease intangibles and incentives 30,346     30,162  
Amortization of deferred financing costs 7,315     8,333  
Bad debt expense 3,595     3,986  
Other 1,502     827  
Change in:      
Accounts receivable (59,734 )   (22,622 )
Other assets 3,660     (17,890 )
Accounts payable and accrued liabilities (5,258 )   31,543  
Management fees payable to affiliate (20,622 )   19,080  
Other liabilities (6,360 )   (14,837 )
Net cash provided by operating activities 63,106     151,043  
       
Cash flows from investing activities:      
Investment in unconsolidated entities and available for sale securities (4,690 )   (13,500 )
Principal collections on finance leases 13,823     13,398  
Acquisition of leasing equipment (321,606 )   (568,569 )
Acquisition of property, plant and equipment (264,829 )   (331,171 )
Acquisition of lease intangibles 1,997     606  
Acquisition of remaining interest in JV investment     (28,828 )
Purchase deposit for aircraft and aircraft engines (8,343 )   (1,000 )
Proceeds from sale of subsidiaries     183,819  
Proceeds from sale of leasing equipment 72,175     248,454  
Return of deposit on sale of leasing equipment 2,350      
Return of capital distributions from unconsolidated entities     1,555  
Net cash used in investing activities $ (509,123 )   $ (495,236 )
               

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)

  Year Ended December 31,
  2020   2019
Cash flows from financing activities:      
Proceeds from debt $ 1,340,981     $ 788,829  
Repayment of debt (852,197 )   (405,131 )
Payment of deferred financing costs (28,243 )   (34,218 )
Receipt of security deposits 3,242     7,887  
Return of security deposits (4,655 )   (368 )
Receipt of maintenance deposits 33,369     65,279  
Release of maintenance deposits (15,712 )   (26,940 )
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 19,694     193,992  
Settlement of equity-based compensation (120 )   (8,078 )
Cash dividends - common shares (113,572 )   (113,541 )
Cash dividends - preferred shares (17,869 )   (1,838 )
Net cash provided by financing activities 364,918     465,873  
       
Net (decrease) increase in cash and cash equivalents and restricted cash (81,099 )   121,680  
Cash and cash equivalents and restricted cash, beginning of period 242,517     120,837  
Cash and cash equivalents and restricted cash, end of period $ 161,418     $ 242,517  
       
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of capitalized interest $ 71,637     $ 83,164  
Cash paid for taxes     1,072  

Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure.   Adjusted EBITDA is not a financial measure in accordance with GAAP. This performance measure provides the CODM with the information necessary to assess operational performance, as well as making resource and allocation decisions. The Company believes Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing its operational performance.

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 (losses) 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, 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 attributable to shareholders to Adjusted EBITDA for the three months and years ended December 31, 2020 and December 31, 2019:

  Three Months Ended December 31,   Year Ended December 31,
(in thousands) 2020   2019   2020   2019
Net (loss) income attributable to shareholders from continuing operations $ (60,523 )   $ 112,214     $ (106,370 )   $ 150,055  
Add: Provision for (benefit from) income taxes 429     18,999     (5,905 )   17,810  
Add: Equity-based compensation expense 1,002     343     2,325     1,509  
Add: Acquisition and transaction expenses 571     8,498     9,868     17,623  
Add: Losses on the modification or extinguishment of debt and capital lease obligations 6,943         11,667      
Add: Changes in fair value of non-hedge derivative instruments     425     181     4,555  
Add: Asset impairment charges 19,587     4,726     33,978     4,726  
Add: Incentive allocations     15,122         21,231  
Add: Depreciation & amortization expense (1) 52,809     50,997     202,746     199,185  
Add: Interest expense 26,647     24,267     98,206     95,585  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 1,375     (492 )   1,208     (1,387 )
Less: Equity in (earnings) losses of unconsolidated entities (406 )   848     5,039     2,375  
Less: Non-controlling share of Adjusted EBITDA (3) (2,231 )   (1,993 )   (9,637 )   (9,859 )
Adjusted EBITDA (non-GAAP) $ 46,203     $ 233,954     $ 243,306     $ 503,408  

__________________________________________________

(1) Includes the following items for the three months ended December 31, 2020 and 2019: (i) depreciation and amortization expense of $45,857 and $44,843, (ii) lease intangible amortization of $731 and $1,445 and (iii) amortization for lease incentives of $6,221 and $4,709, respectively.

Includes the following items for the years ended December 31, 2020 and 2019: (i) depreciation and amortization expense of $172,400 and $169,023, (ii) lease intangible amortization of $3,747 and $7,181 and (iii) amortization for lease incentives of $26,599 and $22,981, respectively.

(2) Includes the following items for the three months ended December 31, 2020 and 2019: (i) net income (loss) of $158 and $(770), (ii) interest expense of $290 and $30 and (iii) depreciation and amortization expense of $1,716 and $248, (iv) acquisition and transaction expense of $48 and $0 and (v) changes in fair value of non-hedge derivative instruments of $(837) and $0, respectively.

Includes the following items for the years ended December 31, 2020 and 2019: (i) net loss of $(5,435) and $(2,563), (ii) interest expense of $1,138 and $131, (iii) depreciation and amortization expense of $5,513 and $1,045, (iv) acquisition and transaction expense of $581 and $0 and (v) changes in fair value of non-hedge derivative instruments of $(589) and $0, respectively.

(3) Includes the following items for the three months ended December 31, 2020 and 2019: (i) equity based compensation of $178 and $54, (ii) provision for income taxes of $15 and $22, (iii) interest expense of $472 and $642, (iv) depreciation and amortization expense of $1,566 and $1,200 and (v) changes in fair value of non-hedge derivative instruments of $0 and $75, respectively.

Includes the following items for the years ended December 31, 2020 and 2019: (i) equity based compensation of $374 and $230, (ii) provision for income taxes of $59 and $60, (iii) interest expense of $2,025 and $3,400, (iv) depreciation and amortization expense of $6,149 and $4,833, (v) changes in fair value of non-hedge derivative instruments of $38 and $1,336 and (vi) loss on extinguishment of debt of $992 and $0, respectively.

The Company uses Funds Available for Distribution (“FAD”) in evaluating its ability to meet its stated dividend policy. The Company believes FAD is a useful metric for investors and analysts for similar purposes. 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.

The Company defines 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 excluding changes in working capital.

The following table sets forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the years ended December 31, 2020 and 2019:

  Year Ended December 31,
(in thousands) 2020   2019
Net Cash Provided by Operating Activities $ 63,106     $ 151,043  
Add: Principal Collections on Finance Leases 13,823     13,398  
Add: Proceeds from Sale of Assets 72,175     432,273  
Add: Return of Capital Distributions from Unconsolidated Entities     1,555  
Less: Required Payments on Debt Obligations (1)     (36,559 )
Less: Capital Distributions to Non-Controlling Interest      
Exclude: Changes in Working Capital 88,314     4,726  
Funds Available for Distribution (FAD) $ 237,418     $ 566,436  

_____________________________________________________

(1)        Required payments on debt obligations for the year ended December 31, 2020 exclude repayments of $306,206 for the 2022 Notes, $270,000 for the Revolving Credit Facility, $144,200 for the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement, and for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit Facility and $18,572 for the CMQR Credit Agreement

The following tables set forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the three months ended and year ended December 31, 2020:

  Three Months Ended December 31, 2020
(in thousands) Equipment Leasing   Infrastructure   Corporate and Other   Total
Funds Available for Distribution (FAD) $ 89,946     $ (1,840 )     $ (33,890 )   $ 54,216  
Less: Principal Collections on Finance Leases             (6,822 )
Less: Proceeds from Sale of Assets             (18,468 )
Less: Return of Capital Distributions from Unconsolidated Entities              
Add: Required Payments on Debt Obligations              
Add: Capital Distributions to Non-Controlling Interest              
Include: Changes in Working Capital             5,787  
Net Cash Provided by Operating Activities             $ 34,713  


  Year Ended December 31, 2020
(in thousands) Equipment Leasing   Infrastructure   Corporate and Other   Total
Funds Available for Distribution (FAD) $ 367,863     $ (7,115 )     $ (123,330 )   $ 237,418  
Less: Principal Collections on Finance Leases             (13,823 )
Less: Proceeds from Sale of Assets             (72,175 )
Less: Return of Capital Distributions from Unconsolidated Entities              
Add: Required Payments on Debt Obligations              
Add: Capital Distributions to Non-Controlling Interest              
Include: Changes in Working Capital             (88,314 )
Net Cash Provided by Operating Activities             $ 63,106  

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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