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FTAI Reports Fourth Quarter and Full Year 2017 Results, Dividend of $0.33 per Common Share

NEW YORK, Feb. 28, 2018 (GLOBE NEWSWIRE) -- Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company”) today reported financial results for the quarter and full year ended December 31, 2017. 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(1) Q4’17   FY17
Net Cash Provided by Operating Activities $ 16,054     $ 68,497  
Net Income Attributable to Shareholders $ 3,010     $ 134  
Basic and Diluted Loss per Share $ 0.04     $ -  
       
Funds Available for Distribution (“FAD”) $ 47,249     $ 177,252  
Adjusted Net Income $ 6,187     $ 10,401  
Adjusted Net Income per Share $ 0.08     $ 0.14  
Adjusted EBITDA $ 47,789     $ 136,524  

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

For the fourth quarter of 2017, our total FAD was $47.2 million. This amount includes $79.1 million from equipment leasing activities, offset by $(16.4) million and $(15.5) million from infrastructure and corporate activities, respectively.

Fourth Quarter 2017 Dividend

On February 27, 2018, the Company’s Board of Directors declared a cash dividend on its common shares of $0.33 per share for the quarter ended December 31, 2017, payable on March 27, 2018 to the holders of record on March 16, 2018.

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 Wednesday, February 28, 2018 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 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 12:00 P.M. on Wednesday, February 28, 2018 through midnight Wednesday, March 7, 2018 at 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.), Passcode: 3883439.

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 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

U.S. FEDERAL INCOME TAX IMPLICATIONS OF DIVIDEND

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 February 2018 will be treated as a partnership distribution. The per share distribution components are as follows:

   
Distribution Components  
U.S. Long Term Capital Gain (1) $  
Non-U.S. Long Term Capital Gain $  
U.S. Portfolio Interest Income (2) $ 0.1300  
U.S. Dividend Income (3) $  
Income Not from U.S. Sources(4) / Return of Capital $ 0.2000  
Distribution Per Share $ 0.3300  
       

1) U.S. Long Term Capital Gain realized on the sale of a United States Real Property Holding Corporation. As a result, the gain from the sale will be treated as income that is effectively connected with a U.S. trade or business.

2) 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.

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

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

It is possible that a common shareholder’s allocable share of FTAI’s taxable income may differ from the distribution amounts reflected above.

Exhibit - Financial Statements

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)

         
    Three Months Ended December 31,   Year Ended December 31,
    2017(1)   2016   2017   2016
Revenues                
Equipment leasing revenues   $ 48,613     $ 29,969     $ 170,000     $ 101,949  
Infrastructure revenues   12,817     12,377     47,659     46,771  
Total revenues   61,430     42,346     217,659     148,720  
                 
Expenses                
Operating expenses   26,360     17,232     92,385     66,169  
General and administrative   3,955     3,160     14,570     12,314  
Acquisition and transaction expenses   2,242     1,694     7,306     6,316  
Management fees and incentive allocation to affiliate   4,203     4,017     15,732     16,742  
Depreciation and amortization   25,728     16,916     88,110     60,210  
Interest expense   17,535     3,118     38,827     18,957  
Total expenses   80,023     46,137     256,930     180,708  
                 
Other income (expense)                
Equity in (losses) earnings of unconsolidated entities   (140 )   (4,657   (1,601 )   (5,992 )
Gain on sale of assets, net   11,555     2,634     18,281     5,941  
Loss on extinguishment of debt           (2,456 )   (1,579 )
Asset impairment               (7,450 )
Interest income   106     49     688     136  
Other income   893     19     3,073     602  
Total other income (expense)   12,414     (1,955   17,985     (8,342 )
                 
(Loss) income before income taxes   (6,179   (5,746 )   (21,286 )   (40,330 )
Provision (benefit) for income taxes   369     (73 )   1,954     268  
Net (loss) income   (6,548   (5,819 )   (23,240 )   (40,598 )
Less:  Net loss attributable to non-controlling interests in consolidated subsidiaries   (9,558 )   (4,006 )   (23,374 )   (20,534 )
Net income (loss) attributable to shareholders   $ 3,010     $ (1,813 )   $ 134     $ (20,064 )
                 
Basic and Diluted Earnings (Loss) per Share:                
Basic   $ 0.04     $ (0.02 )   $ -     $ (0.26 )
Diluted   $ 0.04     $ (0.02 )   $ -     $ (0.26 )
Weighted Average Shares Outstanding:                
Basic   75,771,738     75,750,943     75,766,811     75,738,698  
Diluted   75,772,867     75,750,943     75,766,811     75,738,698  

 

_______________________________________________________________
(1) Results of operations for the three months ended December 31, 2017 include a $5.9 million out of period adjustment, to interest expense, including non-controlling interests of $2.3 million, which primarily relates to interest previously capitalized that should have been expensed ratably during the first nine months of 2017.  We do not believe this out of period adjustment is material to our financial position or results of operations for any prior periods.

 

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)

     
    December 31,
    2017   2016
Assets        
Cash and cash equivalents   $    59,400     $    68,055  
Restricted cash   33,406     65,441  
Accounts receivable, net   31,076     21,358  
Leasing equipment, net   1,074,130     765,455  
Finance leases, net   9,244     9,717  
Property, plant, and equipment, net   489,949     352,181  
Investments (includes $0 and $17,630 available-for-sale securities at fair value as of December 31, 2017 and 2016, respectively)   42,538     39,978  
Intangible assets, net   40,043     38,954  
Goodwill   116,584     116,584  
Other assets   59,436     69,589  
Total assets   $  1,955,806     $  1,547,312  
         
Liabilities        
Accounts payable and accrued liabilities   $ 68,226     $ 38,239  
Debt, net   703,264     259,512  
Maintenance deposits   103,464     45,394  
Security deposits   27,257     19,947  
Other liabilities   18,520     18,540  
Total liabilities   920,731     381,632  
         
Equity        
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 75,771,738 and 75,750,943 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively)   758     758  
Additional paid in capital   985,009     1,084,757  
Accumulated deficit   (38,699 )   (38,833 )
Accumulated other comprehensive income       7,130  
Shareholders' equity   947,068     1,053,812  
Non-controlling interest in equity of consolidated subsidiaries   88,007     111,868  
Total equity   1,035,075     1,165,680  
Total liabilities and equity   $ 1,955,806     $ 1,547,312  
                 

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)

   
  Year Ended December 31,
  2017   2016
 Cash flows from operating activities:      
 Net loss $ (23,240 )   $ (40,598 )
 Adjustments to reconcile net income to net cash provided by operating activities:      
Equity in losses of unconsolidated entities 1,601     5,992  
Gain on sale of assets, net (18,281 )   (5,941 )
Security deposits and maintenance claims included in earnings (60 )   (300 )
Loss on extinguishment of debt 2,456     1,579  
Equity-based compensation 1,343     (3,672 )
Depreciation and amortization 88,110     60,210  
Gain on settlement of liabilities (1,093 )    
Asset impairment     7,450  
Change in current and deferred income taxes 227     (387 )
Change in fair value of non-hedge derivative (1,022 )   3  
Amortization of lease intangibles and incentives 8,306     5,447  
Amortization of deferred financing costs 4,202     2,576  
Operating distributions from unconsolidated entities     30  
Bad debt expense 701     158  
Other 732     86  
Change in:      
 Accounts receivable (12,001 )   (7,980 )
 Other assets 6,475     (8,584 )
 Accounts payable and accrued liabilities 10,266     7,726  
 Management fees payable to affiliate 899     457  
 Other liabilities (1,124 )   6,651  
 Net cash provided by operating activities 68,497     30,903  
       
 Cash flows from investing activities:      
Change in restricted cash 32,036     (2,349 )
Investment in notes receivable     (3,066 )
Investment in unconsolidated entities and available for sale securities (30,310 )   (28,784 )
Principal collections on finance leases 473     2,513  
Acquisition of leasing equipment (425,769 )   (200,640 )
Acquisition of property, plant and equipment (116,031 )   (57,371 )
Acquisition of lease intangibles (10,149 )   (4,527 )
Purchase deposit for aircraft and aircraft engines (12,299 )   (13,681 )
Proceeds from sale of finance leases     71,000  
Proceeds from sale of leasing equipment 91,130     22,885  
Proceeds from sale of available-for-sale securities 30,238      
Proceeds from sale of property, plant and equipment 51     490  
Proceeds from deposit on sale of leasing equipment 400     250  
Return of deposit on sale of leasing equipment     (250 )
Return of capital distributions from unconsolidated entities     432  
 Net cash used in investing activities $ (440,230 )   $ (213,098 )
               

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)

   
  Year Ended December 31,
  2017   2016
 Cash flows from financing activities:      
Proceeds from debt $ 567,191     $ 110,658  
Repayment of debt (125,223 )   (160,166 )
Payment of other liabilities to non-controlling interest holder     (1,000 )
Payment of deferred financing costs (3,377 )   (4,246 )
Receipt of security deposits 7,290     3,815  
Return of security deposits (3,231 )   (316 )
Receipt of maintenance deposits 27,049     14,804  
Release of maintenance deposits (6,270 )   (6,255 )
Capital contributions from non-controlling interests 35     11,480  
Capital distributions to non-controlling interests (254 )    
Settlement of equity-based compensation (74 )   (200 )
Cash dividends (100,058 )   (100,027 )
 Net cash provided by (used in) financing activities $ 363,078     $ (131,453 )
       
 Net decrease in cash and cash equivalents (8,655 )   (313,648 )
 Cash and cash equivalents, beginning of period 68,055     381,703  
 Cash and cash equivalents, end of period $ 59,400     $ 68,055  
               
 Supplemental disclosure of cash flow information:              
Cash paid for interest, net of capitalized interest $ 25,068     $ 13,150  
Cash paid for taxes $ 1,726     $ 654  
               
Supplemental disclosure of non-cash investing and financing activities:              
Restricted cash proceeds from borrowings of debt $     $ 44,342  
Proceeds from borrowings of debt $ 108,339     $  
Repayment and settlement of debt $ (102,352 )   $  
Acquisition of leasing equipment $ (35,332 )   $ (7,724 )
Acquisition of property, plant and equipment $ (37,281 )   $ (12,184 )
Financing of property, plant and equipment $     $ 5,321  
Settled and assumed security deposits $ 3,312     $ 758  
Billed, assumed and settled maintenance deposits $ 37,292     $ 6,350  
Deferred financing costs $ (8,802 )   $ (2,884 )
Non-cash contribution of non-controlling interest $ 1,261     $ 641  
Transfer of non-controlling interest $ (2,798 )   $  
Equity compensation to non-controlling interest $ 1,343     $ (3,872 )
               

Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted Net Income (Loss) and Adjusted EBITDA as performance measures.

Adjusted Net Income (Loss) is our key performance measure and provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. Adjusted Net Income (Loss) is defined as net income 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, and equity in earnings of unconsolidated entities, (b) to include the impact of cash income tax payments, and our pro-rata share of the Adjusted Net Income (Loss) from unconsolidated entities, and (c) to exclude the impact of the non-controlling share of Adjusted Net Income (Loss). We evaluate investment performance for each reportable segment primarily based on Adjusted Net Income (Loss). We believe that net income attributable to shareholders, as defined by GAAP, is the most comparable earnings measurement with which to reconcile Adjusted Net Income.

The following table presents our consolidated reconciliation of net income (loss) attributable to shareholders to Adjusted Net Income (Loss) for the three months ended and year ended December 31, 2017 and December 31, 2016:

       
  Three Months Ended
December 31,
  Year Ended
December 31,
(in thousands) 2017   2016   2017   2016
Net income (loss) attributable to shareholders $ 3,010     $ (1,813 )   $ 134     $ (20,064 )
Add: Provision for income taxes 369     73     1,954     268  
Add: Equity-based compensation expense (income) 648     146     1,343     (3,672 )
Add: Acquisition and transaction expenses 2,242     1,694     7,306     6,316  
Add: Losses on the modification or extinguishment of debt and capital lease obligations         2,456     1,579  
Add: Changes in fair value of non-hedge derivative instruments 14         (1,022 )   3  
Add: Asset impairment charges             7,450  
Add: Pro-rata share of Adjusted Net Loss from unconsolidated entities (1) (2 )   (1,461 )   (1,601 )   (2,905 )
Add: Incentive allocations 514         514      
Less: Cash payments for income taxes (693 )   (60 )   (1,726 )   (654 )
Less: Equity in losses of unconsolidated entities 140     4,657     1,601     5,992  
Less: Non-controlling share of Adjusted Net Income (2) (55 )   (54 )   (558 )   (2,945 )
Adjusted Net Income (Loss) $ 6,187     $ 3,182     $ 10,041     $ (8,632 )

_____________________________________________________________________________________ 

(1) Pro-rata share of Adjusted Net Loss from unconsolidated entities includes the Company’s proportionate share of the unconsolidated entities’ net income adjusted for the excluded and included items detailed in the table above.

(2) Non-controlling share of Adjusted Net Income is comprised of the following for the three months ended December 31, 2017 and 2016: (i) equity-based compensation of $51 and $47 and (ii) provision for income tax of $4 and $7, respectively.

Non-controlling share of Adjusted Net Income  is comprised of the following for the year ended December 31, 2017 and 2016: (i) equity-based compensation of $169 and $(1,561), (ii) provision for income tax of $16 and $29, (iii) loss on extinguishment of debt of $0 and $616, (iv) asset impairment charges of $0 and $3,725, (v) transaction and acquisition expense of $0 and $156, and (vi) changes in fair value of non-hedge derivative instruments of $404 and $0, less (vii) cash tax payments of $31 and $20, respectively.

We view Adjusted EBITDA as a secondary measurement to Adjusted Net Income (Loss), which we believe serves as a useful supplement to investors, analysts and management to measure economic performance of deployed revenue generating assets between periods on a consistent basis, and which we believe measures our financial performance and helps identify operational factors that management can impact in the short-term, namely our cost structure and expenses. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other entities may not calculate Adjusted EBITDA in the same manner.

Adjusted EBITDA is defined as net income 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 of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

The following table sets forth a reconciliation of net income (loss) attributable to shareholders to Adjusted EBITDA for the three months ended and year ended December 31, 2017 and December 31, 2016:

       
  Three Months Ended
December 31,
  Year Ended December 31,
(in thousands) 2017   2016   2017   2016
Net income (loss) attributable to shareholders $ 3,010     $ (1,813 )   $ 134     $ (20,064 )
Add: Provision for income taxes 369     73     1,954     268  
Add: Equity-based compensation expense (income) 648     146     1,343     (3,672 )
Add: Acquisition and transaction expenses 2,242     1,694     7,306     6,316  
Add: Losses on the modification or extinguishment of debt and capital lease obligations         2,456     1,579  
Add: Changes in fair value of non-hedge derivative instruments 14         (1,022 )   3  
Add: Asset impairment charges             7,450  
Add: Incentive allocations 514         514      
Add: Depreciation and amortization expense (3) 28,842     17,580     96,417     65,657  
Add: Interest expense 17,535     3,118     38,827     18,957  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (4) (34 )   (677 )   (243 )   1,196  
Less: Equity in losses of unconsolidated entities 140     4,657     1,601     5,992  
Less: Non-controlling share of Adjusted EBITDA (5) (5,491 )   (2,339 )   (12,763 )   (14,653 )
Adjusted EBITDA (non-GAAP) $ 47,789     $ 22,439     $ 136,524     $ 69,029  

________________________________________________________

(3)  Depreciation and amortization expense includes $25,728 and $16,916 of depreciation and amortization expense, $1,221 and $422 of lease intangible amortization, and $1,893 and $242 of amortization for lease incentives in the three months ended December 31, 2017 and 2016, respectively.

Depreciation and amortization expense includes $88,110 and $60,210 of depreciation and amortization expense, $4,716 and $4,979 of lease intangible amortization, and $3,591 and $467 of amortization for lease incentives in the year ended December 31, 2017 and 2016, respectively.

(4)  Pro-rata share of Adjusted EBITDA from unconsolidated entities includes the following items for the three months ended December 31, 2017 and 2016: (i) net loss of $187 and $4,686, (ii) interest expense of $135 and $391, (iii) depreciation and amortization expense of $18 and $550, and (iv) asset impairment charges of $0 and $3,068, respectively.

Pro-rata share of Adjusted EBITDA from unconsolidated entities includes the following items for the year ended December 31, 2017 and 2016: (i) net loss of $1,786 and $6,161, (ii) interest expense of $785 and $1,323, (iii) depreciation and amortization expense of $758 and $2,966, and (iv) asset impairment charges of $0 and $3,068, respectively.

(5)  Non-controlling share of Adjusted EBITDA is comprised of the following items for the three months ended December 31, 2017 and 2016: (i) equity based compensation of $51 and $47, (ii) provision for income taxes of $4 and $7, (iii) interest expense of $3,542 and $630, and (iv) depreciation and amortization expense of $1,894 and $1,655, respectively.

Non-controlling share of Adjusted EBITDA is comprised of the following items for the year ended December 31, 2017 and 2016: (i) equity based compensation of $169 and $(1,561), (ii) provision for income taxes of $16 and $29, (iii) interest expense of $5,030 and $5,124, (iv) depreciation and amortization expense of $7,144 and $6,564, (v) changes in fair value of non-hedge derivative instruments of $404 and $0, (vi) loss on extinguishment of debt of $0 and $616, (vii) asset impairment charge of $0 and $3,725, and (vii) transaction and acquisition expense of $0 and $156, respectively.

We use Funds Available for Distribution (“FAD”) in evaluating its ability to meet its 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 excluding changes in working capital.

The following table sets forth a reconciliation of Cash from Operating Activities to FAD for the year ended December 31, 2017 and 2016:

   
  Year Ended December 31,
(in thousands) 2017   2016
Net Cash Provided by Operating Activities $ 68,497     $ 30,903  
Add: Principal Collections on Finance Leases 473     2,513  
Add: Proceeds from Sale of Assets (1) 121,419     94,875  
Add: Return of Capital Distributions from Unconsolidated Entities     432  
Less: Required Payments on Debt Obligations (2) (8,368 )   (53,668 )
Less: Capital Distributions to Non-Controlling Interest (254 )    
Exclude: Changes in Working Capital (4,515 )   1,730  
Funds Available for Distribution (FAD) $ 177,252     $ 76,785  

_____________________________________________________
(1)  Proceeds from sale of assets includes $500 received in December 2015 for a deposit on the sale of a commercial jet engine, which was completed in the year ended December 31, 2016.
(2) Required payments on debt obligations for the year ended December 31, 2017 excludes $100,000 repayment of the Term Loan, $95,000 repayment of the Revolving Credit Facility and $21,855 repayment of the CMQR Credit Agreement, and for the year ended December 31, 2016 excludes $98,750 repayment upon the termination of the Jefferson Terminal Credit Agreement and $7,748 repayment under the CMQR Credit Agreement which were voluntary refinancing as repayment of these amounts were not required at this time.

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, 2017:

   
  Three Months Ended December 31, 2017
(in thousands) Equipment
Leasing
  Infrastructure   Corporate   Total
Funds Available for Distribution (FAD) $ 79,077     $ (16,301 )   $ (15,527 )   $ 47,249  
Less: Principal Collections on Finance Leases             (126 )
Less: Proceeds from Sale of Assets             (34,275 )
Less: Return of Capital Distributions from Unconsolidated Entities              
Add: Required Payments on Debt Obligations              
Add: Capital Distributions to Non-Controlling Interest             254.0  
Include: Changes in Working Capital             2,952  
Net Cash Provided by Operating Activities             $ 16,054  
                   

________________________________________
(1)   FAD for the three months ended December 31, 2017 includes a $5.9 million out of period adjustment, which primarily relates to interest previously capitalized that should have been expensed ratably during the first nine months of 2017.  We do not believe this out of period adjustment is material to FAD for any prior periods.

   
  Year Ended December 31, 2017
(in thousands) Equipment
Leasing
  Infrastructure   Corporate   Total
Funds Available for Distribution (FAD) $ 266,245     $ (34,594 )   $ (54,399 )   $ 177,252  
Less: Principal Collections on Finance Leases             (473 )
Less: Proceeds from Sale of Assets             (121,419 )
Less: Return of Capital Distributions from Unconsolidated Entities              
Add: Required Payments on Debt Obligations             8,368  
Add: Capital Distributions to Non-Controlling Interest             254  
Include: Changes in Working Capital             4,515  
Net Cash Provided by Operating Activities             $ 68,497  
                   

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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