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Press Release Details

FTAI Aviation Ltd. Reports Fourth Quarter and Full Year 2023 Results, Declares Dividend of $0.30 per Ordinary Share

Feb 22, 2024

NEW YORK, Feb. 22, 2024 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the fourth quarter and full year 2023. 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 Q4’23    
Net Income Attributable to Shareholders $      110,025    
Basic Earnings per Ordinary Share from Continuing Operations $ 1.10    
Diluted Earnings per Ordinary Share from Continuing Operations $ 1.09    
Adjusted EBITDA(1) $ 162,331    
_______________________________        
1)  For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.        


Fourth Quarter 2023 Dividends

On February 22, 2024, the Company’s Board of Directors (the “Board”) declared a cash dividend on our ordinary shares of $0.30 per share for the quarter ended December 31, 2023, payable on March 20, 2024 to the holders of record on March 8, 2024.

Additionally, on February 22, 2024, 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”), Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”) and Fixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares (“Series D Preferred Shares”) of $0.51563, $0.50000, $0.51563 and $0.59375 per share, respectively, for the quarter ended December 31, 2023, payable on March 15, 2024 to the holders of record on March 5, 2024.

Business Highlights

  • Q4 2023 Aerospace Products Adj. EBITDA of $55 million, bringing total segment Adj. EBITDA for 2023 to $160 million, up from $74 million in 2022.(1)
  • Sold 61 modules to 17 unique customers in Q4, including 6 new customers and 11 repeat customers. Modules sold in 2023 total 178 to 30 customers.
  • Launched V2500 Engine exchange program.
  • Acquired $229 million of Aviation Leasing Equipment in Q4, comprised of 11 Aircraft and 32 Engines.

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

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, https://www.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

In addition, management will host a conference call on Friday, February 23, 2024 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BI5208d5ee8f4a42ec950edf6b9a21c1c2. 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 https://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 23, 2024 through 11:30 A.M. on Friday, March 1, 2024 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 and V2500 engines. FTAI’s propriety portfolio of products, including The Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to our airline, lessor, and maintenance, repair, and operations 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,
    2023       2022       2023       2022  
Total revenues $ 312,737     $ 274,291     $ 1,170,896     $ 708,411  
               
Expenses              
Cost of sales   135,223       128,246       502,132       248,385  
Operating expenses   28,945       24,067       110,163       132,264  
General and administrative   3,430       2,343       13,700       14,164  
Acquisition and transaction expenses   4,999       4,867       15,194       13,207  
Management fees and incentive allocation to affiliate   4,900       3,558       18,037       3,562  
Depreciation and amortization   46,478       37,456       169,877       152,917  
Asset impairment   901       9,048       2,121       137,219  
Interest expense   43,663       36,997       161,639       169,194  
Total expenses   268,539       246,582       992,863       870,912  
               
Other income (expense)              
Equity in income (losses) of unconsolidated entities   63       (244 )     (1,606 )     (369 )
(Loss) gain on sale of assets, net         (2,722 )           77,211  
Gain (loss) on extinguishment of debt         2             (19,859 )
Other income (expense)   6,713       (1 )     7,590       207  
Total other income (expense)   6,776       (2,965 )     5,984       57,190  
Income (loss) from continuing operations before income
taxes
  50,974       24,744       184,017       (105,311 )
(Benefit from) provision for income taxes   (67,386 )     (2,057 )     (59,800 )     5,300  
Net income (loss) from continuing operations   118,360       26,801       243,817       (110,611 )
Net loss from discontinued operations, net of income taxes                     (101,416 )
Net income (loss)   118,360       26,801       243,817       (212,027 )
Less: Net income (loss) attributable to non-controlling interests
in consolidated subsidiaries:
             
Continuing operations                      
Discontinued operations                     (18,817 )
Less: Dividends on preferred shares   8,335       6,791       31,795       27,164  
Net income (loss) attributable to shareholders $ 110,025     $ 20,010     $ 212,022     $ (220,374 )
               
Earnings (loss) per share:              
Basic              
Continuing operations $ 1.10     $ 0.20     $ 2.12     $ (1.39 )
Discontinued operations $     $     $     $ (0.83 )
Diluted              
Continuing operations $ 1.09     $ 0.20     $ 2.11     $ (1.39 )
Discontinued operations $     $     $     $ (0.83 )
Weighted average shares outstanding:              
Basic   100,239,011       99,566,387       99,908,214       99,421,008  
Diluted   100,853,151       100,180,524       100,425,777       99,421,008  


FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
   
  December 31,
    2023       2022  
Assets      
Cash and cash equivalents $ 90,756     $ 33,565  
Restricted cash   150       19,500  
Accounts receivable, net   115,156       99,443  
Leasing equipment, net   2,032,413       1,913,553  
Property, plant, and equipment, net   45,175       10,014  
Investments   22,722       22,037  
Intangible assets, net   50,590       41,955  
Goodwill   4,630        
Inventory, net   316,637       163,676  
Other assets   286,456       125,834  
Total assets $ 2,964,685     $ 2,429,577  
       
Liabilities      
Accounts payable and accrued liabilities $ 112,907     $ 86,452  
Debt, net   2,517,343       2,175,727  
Maintenance deposits   65,387       78,686  
Security deposits   41,065       32,842  
Other liabilities   52,100       36,468  
Total liabilities $ 2,788,802     $ 2,410,175  
       
Commitments and contingencies      
       
Equity      
Ordinary shares ($0.01 par value per share; 2,000,000,000 shares authorized; 100,245,905 and
99,716,621 shares issued and outstanding as of December 31, 2023 and 2022, respectively)
  1,002     $ 997  
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 15,920,000 and
13,320,000 shares issued and outstanding as of December 31, 2023 and 2022, respectively)
  159       133  
Additional paid in capital   255,973       343,350  
Accumulated deficit   (81,785 )     (325,602 )
Shareholders' equity   175,349       18,878  
Non-controlling interest in equity of consolidated subsidiaries   534       524  
Total equity $ 175,883     $ 19,402  
Total liabilities and equity $ 2,964,685     $ 2,429,577  


FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)
   
  Year Ended December 31,
    2023       2022  
Cash flows from operating activities:      
Net income (loss) $ 243,817     $ (212,027 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:      
Equity in losses of unconsolidated entities   1,606       46,971  
Gain on sale of assets, net   (160,742 )     (141,677 )
Security deposits and maintenance claims included in earnings   (40,535 )     (41,845 )
Loss on extinguishment of debt         19,859  
Equity-based compensation   1,638       2,623  
Depreciation and amortization   169,877       193,236  
Asset impairment   2,121       137,219  
Change in deferred income taxes   (63,626 )     2,161  
Change in fair value of non-hedge derivatives         (1,567 )
Change in fair value of guarantees   (1,807 )      
Amortization of lease intangibles and incentives   43,764       37,135  
Amortization of deferred financing costs   8,860       19,018  
Provision for credit losses   6,583       47,975  
Other   (6,646 )     (1,010 )
Change in:      
Accounts receivable   (40,357 )     (65,969 )
Other assets   (5,627 )     (23,037 )
Inventory   (31,884 )     (23,267 )
Accounts payable and accrued liabilities   1,254       (19,599 )
Management fees payable to affiliate   1,683       804  
Other liabilities   (997 )     2,340  
Net cash provided by (used in) operating activities   128,982       (20,657 )
       
Cash flows from investing activities:      
Investment in unconsolidated entities   (19,500 )     (7,344 )
Principal collections on finance leases   3,638       2,227  
Principal collections on notes receivable   4,875        
Acquisition of business, net of cash acquired   (29,632 )     (3,819 )
Acquisition of leasing equipment   (749,780 )     (638,329 )
Acquisition of property, plant and equipment   (6,148 )     (144,196 )
Acquisition of lease intangibles   (20,964 )     (31,127 )
Investment in promissory notes   (11,500 )      
Purchase deposit for acquisitions   (23,937 )     (6,671 )
Proceeds from sale of leasing equipment   477,886       408,937  
Proceeds from sale of property, plant and equipment         5,289  
Proceeds for deposit on sale of aircraft and engine   1,413       3,780  
Return of purchase deposits   300        
Net cash used in investing activities $ (373,349 )   $ (411,253 )


  Year Ended December 31,
    2023       2022  
Cash flows from financing activities:      
Proceeds from debt $ 951,665     $ 813,980  
Repayment of debt   (605,000 )     (1,144,529 )
Payment of deferred financing costs   (12,180 )     (18,607 )
Receipt of security deposits   9,927       3,882  
Return of security deposits   (2,385 )     (2,141 )
Receipt of maintenance deposits   30,354       47,846  
Release of maintenance deposits   (275 )     (1,471 )
Proceeds from issuance of ordinary shares, net of underwriter's discount   5        
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs   61,729        
Capital contributions from non-controlling interests   10       1,187  
Dividend from spin-off of FTAI Infrastructure, net of cash transferred         500,562  
Settlement of equity-based compensation         (148 )
Cash dividends - ordinary shares   (119,847 )     (128,483 )
Cash dividends - preferred shares   (31,795 )     (27,164 )
Net cash provided by financing activities   282,208       44,914  
       
Net increase (decrease) in cash and cash equivalents and restricted cash   37,841       (386,996 )
Cash and cash equivalents and restricted cash, beginning of period   53,065       440,061  
Cash and cash equivalents and restricted cash, end of period $ 90,906     $ 53,065  
       


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 income (loss) attributable to shareholders to Adjusted EBITDA for the three and twelve months ended December 31, 2023 and 2022:

  Three Months Ended December 31,   Year Ended December 31,
(in thousands)   2023       2022       2023       2022  
Net income (loss) attributable to shareholders from continuing operations $ 110,025     $ 20,010     $ 212,022     $ (137,775 )
Add: (Benefit from) provision for income taxes   (67,386 )     (2,057 )     (59,800 )     5,300  
Add: Equity-based compensation expense   510             1,638        
Add: Acquisition and transaction expenses   4,999       4,867       15,194       13,207  
Add: (Gain) loss on the modification or extinguishment of debt and capital lease obligations         (2 )           19,859  
Add: Changes in fair value of non-hedge derivative instruments                      
Add: Asset impairment charges   901       9,048       2,121       137,219  
Add: Incentive allocations   4,576       3,489       17,116       3,489  
Add: Depreciation & amortization expense(1)   56,557       44,277       213,641       190,031  
Add: Interest expense and dividends on preferred shares   51,998       43,788       193,434       196,358  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities(2)   214       (125 )     310       40  
Less: Equity in (earnings) losses of unconsolidated entities   (63 )     244       1,606       369  
Less: Non-controlling share of Adjusted EBITDA                      
Adjusted EBITDA (non-GAAP) $ 162,331     $ 123,539     $ 597,282     $ 428,097  

__________________________________________________

(1)     Includes the following items for the three months ended December 31, 2023 and 2022: (i) depreciation and amortization expense of $46,478 and $37,456, (ii) lease intangible amortization of $3,801 and $3,654 and (iii) amortization for lease incentives of $6,278 and $3,167, respectively.

Includes the following items for the years ended December 31, 2023 and 2022: (i) depreciation and amortization expense of $169,877 and $152,917, (ii) lease intangible amortization of $15,126 and $13,913 and (iii) amortization for lease incentives of $28,638 and $23,201, respectively.
       
(2)     Includes the following items for the three months ended December 31, 2023 and 2022: (i) net income (loss) of $63 and $(244), (ii) depreciation and amortization expense of $286 and $119 and (iii) acquisition and transaction expense of $(135) and $0, respectively.

Includes the following items for the years ended December 31, 2023 and 2022: (i) net loss of $1,606 and $369, (ii) depreciation and amortization expense of $1,488 and $409 and (iii) acquisition and transaction expense of $428 and $0, respectively.

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Source: FTAI Aviation Ltd.