UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 25, 2023
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of Principal Executive Offices) (Zip Code)
(212 ) 798-6100
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities
Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class:
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Trading Symbol:
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Name of each exchange on which registered:
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| Item 2.02. |
Results of Operations and Financial Condition.
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On October 25, 2023, FTAI Aviation Ltd. (“FTAI” or the “Company”) issued a press release announcing the Company’s results for its fiscal quarter ended
September 30, 2023. A copy of the Company’s press release is attached to this Current Report on Form 8-K (the “Current Report”) as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure.
This Current Report, including the exhibit attached hereto, is being furnished and shall not be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or
the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.
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Item 9.01
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Financial Statements and Exhibits.
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| (d) |
Exhibits.
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Exhibit
Number
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Description
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Press release, dated October 25, 2023, issued by FTAI Aviation Ltd.
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104
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Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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FTAI Aviation Ltd.
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By:
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/s/ Eun (Angela) Nam
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Name:
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Eun (Angela) Nam
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Title:
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Chief Financial Officer and Chief Accounting Officer
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Date: October 25, 2023
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Exhibit 99.1
PRESS RELEASE
FTAI Aviation Ltd. Reports Third Quarter 2023 Results, Declares Dividend of $0.30 per Ordinary Share
NEW YORK, October 25, 2023 (GLOBE NEWSWIRE) – FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the third quarter 2023.
The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.
Financial Overview
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(in thousands, except per share data)
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||||
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Selected Financial Results
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Q3’23
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|||
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Net Income Attributable to Shareholders
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$
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32,973
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Basic Earnings per Ordinary Share from Continuing Operations
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$
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0.33
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||
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Diluted Earnings per Ordinary Share from Continuing Operations
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$
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0.33
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||
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Adjusted EBITDA(1)
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$
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154,218
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(1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.
Third Quarter 2023 Dividends
On October 25, 2023, the Company’s Board of Directors (the “Board”) declared a cash dividend on FTAI’s ordinary shares of $0.30 per share for the quarter ended
September 30, 2023, payable on November 28, 2023 to the holders of record on November 14, 2023.
Additionally, on October 25, 2023, the Board declared cash dividends on FTAI’s 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 September 30, 2023, payable on December 15,
2023 to the holders of record on December 1, 2023.
Business Highlights
| • |
$107.1 million Aerospace Products revenue in Q3 2023 generating $40.6 million of Adjusted EBITDA(1) at a 38% margin.
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| • |
41 modules sold in Q3’23 to 11 unique customers including 2 new customers and 9 repeat customers.
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| • |
Generated $492 million year to date positive free cashflow available for asset acquisition & investment activity.
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| • |
Closed on 23 Engines & 10 Aircraft at attractive prices to help generate future growth in Aviation Leasing Adjusted EBITDA(1).
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1
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 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
In addition, management will host a conference call on Thursday, October 26, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed
by registering via the following link https://register.vevent.com/register/BIc75f7efaa03d41108edf9a7cf4d4ec2f. 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 Thursday, October 26, 2023 through 11:30 A.M. on Thursday, November 2,
2023 on https://ir.ftaiaviation.com/news-events/presentations.
The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and
should not be considered a part of, this press release.
About FTAI Aviation Ltd.
FTAI owns and maintains commercial jet engines with a focus on CFM56 engines. FTAI’s propriety portfolio of products, including The Module Factory and a 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.
2
For further information, please contact:
Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
aandreini@fortress.com
3
Exhibit - Financial Statements
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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|||||||||||||||
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2023
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2022
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2023
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2022
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Revenues
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||||||||||||||||
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Lease income
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$
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45,622
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$
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50,198
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$
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161,141
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$
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129,163
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Maintenance revenue
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63,925
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35,507
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141,131
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112,171
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Asset sales revenue
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72,990
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85,488
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283,167
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85,488
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Aerospace products revenue
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107,085
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53,401
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260,273
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94,211
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Other revenue
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1,474
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5,771
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12,447
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13,087
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Total revenues
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291,096
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230,365
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858,159
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434,120
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Expenses
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||||||||||||||||
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Cost of sales
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116,707
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95,948
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366,909
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120,139
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Operating expenses
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33,887
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27,393
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81,218
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108,197
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General and administrative
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3,015
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3,354
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10,270
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11,821
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Acquisition and transaction expenses
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4,261
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2,848
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10,195
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8,340
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||||||||||||
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Management fees and incentive allocation to affiliate
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4,577
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4
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13,137
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4
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||||||||||||
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Depreciation and amortization
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43,959
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34,853
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123,399
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115,461
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||||||||||||
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Asset impairment
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—
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4,495
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1,220
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128,171
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Interest expense
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40,185
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40,171
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117,976
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132,197
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Total expenses
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246,591
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209,066
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724,324
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624,330
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Other income (expense)
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||||||||||||||||
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Equity in earnings (losses) of unconsolidated entities
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46
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(358
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)
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(1,669
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)
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(125
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)
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Gain on sale of assets, net
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—
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—
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—
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79,933
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||||||||||||
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Loss on extinguishment of debt
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—
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(19,861
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)
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—
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(19,861
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)
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Other income (expense)
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461
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(1,038
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)
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877
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208
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|||||||||||
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Total other income (expense)
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507
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(21,257
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)
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(792
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)
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60,155
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||||||||||
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Income (loss) from continuing operations before income taxes
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45,012
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42
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133,043
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(130,055
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)
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|||||||||||
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Provision for income taxes
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3,705
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4,189
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7,586
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7,357
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||||||||||||
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Net income (loss) from continuing operations
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41,307
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(4,147
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)
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125,457
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(137,412
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)
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Net loss from discontinued operations, net of income taxes
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—
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(14,782
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)
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—
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(101,416
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)
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||||||||||
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Net income (loss)
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41,307
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(18,929
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)
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125,457
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(238,828
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)
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||||||||||
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Less: Net loss attributable to non-controlling interests in consolidated subsidiaries:
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||||||||||||||||
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Continuing operations
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—
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—
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—
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—
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||||||||||||
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Discontinued operations
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—
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(2,871
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)
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—
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(18,817
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)
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||||||||||
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Less: Dividends on preferred shares
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8,334
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6,791
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23,460
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20,373
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||||||||||||
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Net income (loss) attributable to shareholders
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$
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32,973
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$
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(22,849
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)
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$
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101,997
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$
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(240,384
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)
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||||||
4
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Three Months Ended September 30,
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Nine Months Ended September 30,
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|||||||||||||||
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2023
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2022
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2023
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2022
|
|||||||||||||
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Earnings (loss) per share:
|
||||||||||||||||
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Basic
|
|
|
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|
||||||||||||
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Continuing operations
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$ | 0.33 | $ |
(0.11
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) |
$ |
1.02
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$ |
(1.59
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) |
||||||
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Discontinued operations
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$ |
—
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$ |
(0.12
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) |
$ | — | $ |
(0.83
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) |
||||||
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Diluted
|
||||||||||||||||
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Continuing operations
|
$ |
0.33 | $ |
(0.11
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) |
$ |
1.02
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$ |
(1.59
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) |
||||||
|
Discontinued operations
|
$ |
— | $ |
(0.12
|
) |
$ | — | $ |
(0.83
|
) |
||||||
|
Weighted average shares outstanding:
|
||||||||||||||||
|
Basic
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99,927,594 |
99,378,771
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99,796,736
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99,372,016
|
||||||||||||
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Diluted
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100,482,309
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99,378,771
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100,269,203
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99,372,016
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||||||||||||
5
FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
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(Unaudited)
|
||||||||
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September 30, 2023
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December 31, 2022
|
|||||||
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Assets
|
||||||||
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Cash and cash equivalents
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$
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52,879
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$
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33,565
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||||
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Restricted cash
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—
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19,500
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||||||
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Accounts receivable, net
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107,825
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99,443
|
||||||
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Leasing equipment, net
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1,924,198
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1,913,553
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||||||
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Property, plant, and equipment, net
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13,454
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10,014
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||||||
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Investments
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39,868
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22,037
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||||||
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Intangible assets, net
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41,471
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41,955
|
||||||
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Inventory, net
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274,832
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163,676
|
||||||
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Other assets
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179,259
|
125,834
|
||||||
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Total assets
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$
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2,633,786
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$
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2,429,577
|
||||
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Liabilities
|
||||||||
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Accounts payable and accrued liabilities
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$
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108,579
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$
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86,452
|
||||
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Debt, net
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2,279,330
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2,175,727
|
||||||
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Maintenance deposits
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61,497
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78,686
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||||||
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Security deposits
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39,901
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32,842
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||||||
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Other liabilities
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49,417
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36,468
|
||||||
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Total liabilities
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$
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2,538,724
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$
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2,410,175
|
||||
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Commitments and contingencies
|
||||||||
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Equity
|
||||||||
|
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 100,238,075 and 99,716,621 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively)
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$
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1,002
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$
|
997
|
||||
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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 September 30, 2023 and December 31, 2022, respectively)
|
159
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133
|
||||||
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Additional paid in capital
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293,512
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343,350
|
||||||
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Accumulated deficit
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(200,145
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)
|
(325,602
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)
|
||||
|
Shareholders' equity
|
94,528
|
18,878
|
||||||
|
Non-controlling interest in equity of consolidated subsidiaries
|
534
|
524
|
||||||
|
Total equity
|
95,062
|
19,402
|
||||||
|
Total liabilities and equity
|
$
|
2,633,786
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$
|
2,429,577
|
||||
6
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)
|
Nine Months Ended September 30,
|
||||||||
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2023
|
2022
|
|||||||
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Cash flows from operating activities:
|
||||||||
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Net income (loss)
|
$
|
125,457
|
$
|
(238,828
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)
|
|||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||
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Equity in losses of unconsolidated entities
|
1,669
|
46,727
|
||||||
|
Gain on sale of assets, net
|
(110,511
|
)
|
(106,427
|
)
|
||||
|
Security deposits and maintenance claims included in earnings
|
(34,458
|
)
|
(31,558
|
)
|
||||
|
Loss on extinguishment of debt
|
—
|
19,861
|
||||||
|
Equity-based compensation
|
1,128
|
2,623
|
||||||
|
Depreciation and amortization
|
123,399
|
155,780
|
||||||
|
Asset impairment
|
1,220
|
128,171
|
||||||
|
Change in deferred income taxes
|
5,974
|
14,923
|
||||||
|
Change in fair value of non-hedge derivative
|
—
|
(1,567
|
)
|
|||||
|
Change in fair value of guarantees
|
(1,677
|
)
|
—
|
|||||
|
Amortization of lease intangibles and incentives
|
33,685
|
30,315
|
||||||
|
Amortization of deferred financing costs
|
6,429
|
17,142
|
||||||
|
Provision for credit losses
|
6,583
|
47,226
|
||||||
|
Other
|
(995
|
)
|
(693
|
)
|
||||
|
Change in:
|
||||||||
|
Accounts receivable
|
(34,358
|
)
|
(61,892
|
)
|
||||
|
Inventory
|
(4,845
|
)
|
(13,370
|
)
|
||||
|
Other assets
|
(3,727
|
)
|
(23,576
|
)
|
||||
|
Accounts payable and accrued liabilities
|
321
|
4,329
|
||||||
|
Management fees payable to affiliate
|
824
|
(2,530
|
)
|
|||||
|
Other liabilities
|
648
|
(7,955
|
)
|
|||||
|
Net cash provided by (used in) operating activities
|
116,766
|
(21,299
|
)
|
|||||
|
Cash flows from investing activities:
|
||||||||
|
Investment in unconsolidated entities
|
(19,500
|
)
|
(7,344
|
)
|
||||
|
Principal collections on notes receivable
|
2,438
|
—
|
||||||
|
Principal collections on finance leases
|
3,624
|
2,165
|
||||||
|
Acquisition of business, net of cash acquired
|
—
|
(3,819
|
)
|
|||||
|
Acquisition of leasing equipment
|
(506,923
|
)
|
(360,642
|
)
|
||||
|
Acquisition of property, plant and equipment
|
(3,906
|
)
|
(138,750
|
)
|
||||
|
Acquisition of lease intangibles
|
(10,474
|
)
|
(6,542
|
)
|
||||
|
Investment in promissory notes
|
(11,500
|
)
|
—
|
|||||
|
Purchase deposits for acquisitions
|
(10,533
|
)
|
(28,621
|
)
|
||||
|
Proceeds from sale of leasing equipment
|
366,065
|
262,096
|
||||||
|
Proceeds from sale of property, plant and equipment
|
—
|
5,289
|
||||||
|
(Refunds) proceeds for deposit on sale of aircraft and engine
|
(683
|
)
|
7,801
|
|||||
|
Return of purchase deposits
|
300
|
—
|
||||||
|
Net cash used in investing activities
|
$
|
(191,092
|
)
|
$
|
(268,367
|
)
|
||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from debt
|
$
|
430,000
|
$
|
503,980
|
||||
|
Repayment of debt
|
(330,000
|
)
|
(984,529
|
)
|
||||
|
Payment of deferred financing costs
|
(1,805
|
)
|
(18,151
|
)
|
||||
|
Receipt of security deposits
|
7,355
|
2,636
|
||||||
|
Return of security deposits
|
(2,385
|
)
|
(941
|
)
|
||||
|
Receipt of maintenance deposits
|
22,747
|
37,586
|
||||||
|
Release of maintenance deposits
|
(275
|
)
|
(878
|
)
|
||||
|
Capital contributions from non-controlling interests
|
10
|
1,187
|
||||||
|
Settlement of equity-based compensation
|
—
|
(148
|
)
|
|||||
|
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs
|
61,729
|
—
|
||||||
|
Dividend from spin-off of FTAI Infrastructure, net of cash transferred
|
—
|
500,562
|
||||||
|
Cash dividends - ordinary shares
|
(89,776
|
)
|
(98,584
|
)
|
||||
|
Cash dividends - preferred shares
|
(23,460
|
)
|
(20,373
|
)
|
||||
|
Net cash provided by (used in) financing activities
|
$
|
74,140
|
$
|
(77,653
|
)
|
|||
|
Net decrease in cash and cash equivalents and restricted cash
|
(186
|
)
|
(367,319
|
)
|
||||
|
Cash and cash equivalents and restricted cash, beginning of period
|
53,065
|
440,061
|
||||||
|
Cash and cash equivalents and restricted cash, end of period
|
$
|
52,879
|
$
|
72,742
|
||||
7
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 from continuing operations to Adjusted EBITDA for the three and nine
months ended September 30, 2023 and 2022:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||
|
(in thousands)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
||||||||||||||||||
|
Net income (loss) attributable to shareholders from continuing operations
|
$
|
32,973
|
$
|
(10,938
|
)
|
$
|
43,911
|
$
|
101,997
|
$
|
(157,785
|
)
|
$
|
259,782
|
||||||||||
|
Add: Provision for income taxes
|
3,705
|
4,189
|
(484
|
)
|
7,586
|
7,357
|
229
|
|||||||||||||||||
|
Add: Equity-based compensation expense
|
510
|
—
|
510
|
1,128
|
—
|
1,128
|
||||||||||||||||||
|
Add: Acquisition and transaction expenses
|
4,261
|
2,848
|
1,413
|
10,195
|
8,340
|
1,855
|
||||||||||||||||||
|
Add: Losses on the modification or extinguishment of debt and capital lease obligations
|
—
|
19,861
|
(19,861
|
)
|
—
|
19,861
|
(19,861
|
)
|
||||||||||||||||
|
Add: Changes in fair value of non-hedge derivative instruments
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
|
Add: Asset impairment charges
|
—
|
4,495
|
(4,495
|
)
|
1,220
|
128,171
|
(126,951
|
)
|
||||||||||||||||
|
Add: Incentive allocations
|
4,274
|
—
|
4,274
|
12,540
|
—
|
12,540
|
||||||||||||||||||
|
Add: Depreciation and amortization expense (1)
|
59,380
|
41,329
|
18,051
|
157,084
|
145,754
|
11,330
|
||||||||||||||||||
|
Add: Interest expense and dividends on preferred shares
|
48,519
|
46,962
|
1,557
|
141,436
|
152,570
|
(11,134
|
)
|
|||||||||||||||||
|
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
|
642
|
(241
|
)
|
883
|
96
|
165
|
(69
|
)
|
||||||||||||||||
|
Less: Equity in (earnings) losses of unconsolidated entities
|
(46
|
)
|
358
|
(404
|
)
|
1,669
|
125
|
1,544
|
||||||||||||||||
|
Less: Non-controlling share of Adjusted EBITDA
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
154,218
|
$
|
108,863
|
$
|
45,355
|
$
|
434,951
|
$
|
304,558
|
$
|
130,393
|
||||||||||||
(1) Includes the
following items for the three months ended September 30, 2023 and 2022: (i) depreciation and amortization expense of $43,959 and $34,853, (ii) lease intangible amortization of $3,726 and $3,291 and (iii) amortization for lease incentives of
$11,695 and $3,185, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) depreciation and amortization expense of $123,399 and $115,461, (ii) lease intangible amortization of $11,325 and $10,259
and (iii) amortization for lease incentives of $22,360 and $20,034, respectively.
(2) Includes the following items for the three
months ended September 30, 2023 and 2022: (i) net income (loss) of $46 and $(358), (ii) depreciation and amortization expense of $367 and $117 and (iii) acquisition and transaction expense of $229 and $0, respectively. Includes the following
items for the nine months ended September 30, 2023 and 2022: (i) net loss of $1,669 and $125, (ii) depreciation and amortization expense of $1,202 and $290 and (iii) acquisition and transaction expense of $563 and $0, respectively.
8