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): February 25, 2021
(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.
On February 25, 2021, the Company issued a press release announcing the Company’s results for its fiscal quarter and year ended December 31, 2020. 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit
Number
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Description
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Press release, dated February 25, 2021, issued by Fortress Transportation and Infrastructure Investors LLC
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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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FORTRESS TRANSPORTATION AND
INFRASTRUCTURE INVESTORS LLC
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By:
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/s/ Eun Nam
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Name:
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Eun Nam
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Title:
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Chief Accounting Officer
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Date: February 25, 2021
Exhibit 99.1
PRESS RELEASE
FTAI Reports Fourth Quarter and Full Year 2020 Results, Dividend of $0.33 per Common Share
NEW YORK, February 25, 2021 – Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company” or “FTAI”) today reported financial results for the
quarter and full year ended December 31, 2020. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.
Financial Overview
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(in thousands, except per share data)
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||||||||
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Selected Financial Results
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Q4’20
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FY20
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||||||
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Net Cash Provided by Operating Activities
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$
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34,713
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$
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63,106
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Net Loss Attributable to Shareholders
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$
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(60,523
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)
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$
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(105,039
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)
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Basic and Diluted Loss per Common Share
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$
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(0.70
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)
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$
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(1.24
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)
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Funds Available for Distribution (“FAD”)
(1)
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$
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54,216
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$
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237,418
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Adjusted EBITDA(1)
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$
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46,203
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$
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243,306
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________________________________
(1) For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.
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For the fourth quarter of 2020, total FAD was $54.2 million. This amount includes $89.9 million from our aviation leasing portfolio, offset by $(1.8) million from our
infrastructure business and $(33.9) million from corporate and other.
Fourth Quarter 2020 Dividends
On February 25, 2021, the Company’s Board of Directors (the “Board”) declared a cash dividend on its common shares of $0.33 per share for the quarter ended December 31,
2020, payable on March 23, 2021 to the holders of record on March 12, 2021.
Additionally, on February 25, 2021, the Board declared cash dividends on its Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A
Preferred Shares”) and Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”) of $0.51563 and $0.50000 per share, respectively, for the quarter ended December 31, 2020, payable on March 15, 2021
to the holders of record on March 8, 2021.
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Relations section of the
Company’s website, www.ftandi.com, and the Company’s Annual Report on Form 10-K, when available on the Company’s website. Nothing on the Company’s website is included or incorporated by reference herein.
Conference Call
The Company will host a conference call on Friday, February 26, 2021 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing (877) 447-5636 (from
within the U.S.) or (615) 247-0080 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “FTAI 2020 Fourth Quarter Earnings Call.” A simultaneous webcast of the conference call will be available to the
public on a listen-only basis at www.ftandi.com.
Following the call, a replay of the conference call will be available after 11:30 A.M. on Friday, February 26, 2021 through 11:30 A.M. on Friday, March 5, 2021 at (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside of the U.S.), Passcode: 4656159.
1
About Fortress Transportation and Infrastructure Investors LLC
Fortress Transportation and Infrastructure Investors LLC owns and acquires high quality infrastructure and equipment that is essential for the transportation of goods
and people globally. FTAI targets assets that, on a combined basis, generate strong and stable cash flows with the potential for earnings growth and asset appreciation. FTAI is externally managed by an affiliate of Fortress Investment Group LLC, a
leading, diversified global investment firm.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which
are beyond the Company’s control. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this
press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftandi.com). In addition, new risks and uncertainties emerge from time to time, and it is not
possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press
release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events,
conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
For further information, please contact:
Alan Andreini
Investor Relations
Fortress Transportation and Infrastructure Investors LLC
(212) 798-6128
aandreini@fortress.com
2
Withholding Information for Withholding Agents
This announcement is intended to be a qualified notice as provided in the Internal Revenue Code (the “Code”) and the Regulations thereunder. For U.S. federal income tax
purposes, the common dividend and the Series A Preferred and Series B Preferred dividends declared in February 2021 will be treated as a partnership distribution and guaranteed payments, respectively. For U.S. tax withholding purposes, the per share
distribution components are as follows:
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Common Distribution Components
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Non-U.S. Long Term Capital Gain
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$
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—
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U.S. Portfolio Interest Income(1)
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$
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0.04003
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U.S. Dividend Income(2)
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$
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—
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Income Not from U.S. Sources(3)
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$
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0.28997
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U.S. Long Term Capital Gain (4)
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$
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—
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Distribution Per Share
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$
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0.33000
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Series A Preferred Distribution Components
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Guaranteed Payments(5)
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$
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0.51563
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Distribution Per Share
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$
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0.51563
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Series B Preferred Distribution Components
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Guaranteed Payments(5)
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$
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0.50000
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Distribution Per Share
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$
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0.50000
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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.
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This income is subject to withholding under §1441 or §1442 of the Code.
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This income is not subject to withholding under §1441, §1442 or §1446 of the Code.
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U.S. Long Term Capital Gain attributable to the sale of a U.S. Real Property Holding Corporation. As a result, the gain will be treated as income that is effectively connected with a
U.S. trade or business and be subject to withholding.
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Brokers and nominees should treat this income as subject to withholding under §1441 or §1442 of the Code.
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For U.S. shareholders: In computing your U.S. federal taxable income, you
should not rely on this qualified notice, but should generally take into account
your allocable share of the Company’s taxable income as reported to you on your Schedule K-1.
3
Exhibit - Financial Statements
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar amounts in thousands, except per share data)
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Three Months Ended December 31,
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Year Ended December 31,
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|||||||||||||||
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2020
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2019
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2020
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2019
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Revenues
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Equipment leasing revenues
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$
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61,852
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$
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110,411
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$
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297,934
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$
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349,322
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Infrastructure revenues
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13,786
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50,921
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68,562
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229,452
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Total revenues
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75,638
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161,332
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366,496
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578,774
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Expenses
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Operating expenses
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28,368
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68,760
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109,512
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291,572
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General and administrative
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4,867
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3,635
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18,159
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16,905
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Acquisition and transaction expenses
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571
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8,498
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9,868
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17,623
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Management fees and incentive allocation to affiliate
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4,406
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19,133
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18,519
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36,059
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Depreciation and amortization
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45,857
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44,843
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172,400
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169,023
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Asset impairment
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19,587
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4,726
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33,978
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4,726
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Interest expense
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26,647
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24,267
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98,206
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95,585
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Total expenses
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130,303
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173,862
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460,642
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631,493
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Other (expense) income
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||||||||||||||||
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Equity in earnings (losses) of unconsolidated entities
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406
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(848
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)
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(5,039
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)
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(2,375
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)
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|||||||||
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Gain (loss) on sale of assets, net
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1,857
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141,850
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(308
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)
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203,250
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Loss on extinguishment of debt
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(6,943
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)
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—
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(11,667
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)
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—
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Interest income
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41
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79
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162
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531
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Other income (expense)
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38
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(20
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)
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70
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3,445
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Total other (expense) income
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(4,601
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)
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141,061
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(16,782
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)
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204,851
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||||||||||
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(Loss) income from continuing operations before income taxes
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(59,266
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)
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128,531
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(110,928
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)
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152,132
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||||||||||
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Provision for (benefit from) income taxes
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429
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18,999
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(5,905
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)
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17,810
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|||||||||||
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Net (loss) income from continuing operations
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(59,695
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)
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109,532
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(105,023
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)
|
134,322
|
||||||||||
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Net income from discontinued operations, net of income taxes
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—
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71,579
|
1,331
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73,462
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||||||||||||
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Net (loss) income
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(59,695
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)
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181,111
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(103,692
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)
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207,784
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||||||||||
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Less: Net (loss) income attributable to non-controlling interests in consolidated subsidiaries:
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||||||||||||||||
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Continuing operations
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(3,798
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)
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(4,520
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)
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(16,522
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)
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(17,571
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)
|
||||||||
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Discontinued operations
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—
|
146
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—
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247
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||||||||||||
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Less: Dividends on preferred shares
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4,626
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1,838
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17,869
|
1,838
|
||||||||||||
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Net (loss) income attributable to shareholders
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$
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(60,523
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)
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$
|
183,647
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$
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(105,039
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)
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$
|
223,270
|
||||||
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(Loss) earnings per share:
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||||||||||||||||
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Basic
|
||||||||||||||||
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Continuing operations
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$
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(0.70
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)
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$
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1.30
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$
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(1.24
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)
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$
|
1.74
|
||||||
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Discontinued operations
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$
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0.00
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$
|
0.83
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$
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0.02
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$
|
0.85
|
||||||||
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Diluted
|
||||||||||||||||
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Continuing operations
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$
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(0.70
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)
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$
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1.30
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$
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(1.24
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)
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$
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1.74
|
||||||
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Discontinued operations
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$
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0.00
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$
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0.83
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$
|
0.02
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$
|
0.85
|
||||||||
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Weighted average shares outstanding:
|
||||||||||||||||
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Basic
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86,022,302
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85,997,619
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86,015,702
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85,992,019
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||||||||||||
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Diluted
|
86,022,302
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86,090,207
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86,015,702
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86,029,363
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4
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except per share data)
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December 31,
|
||||||||
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2020
|
2019
|
|||||||
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Assets
|
||||||||
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Cash and cash equivalents
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$
|
121,703
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$
|
226,512
|
||||
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Restricted cash
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39,715
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16,005
|
||||||
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Accounts receivable, net
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91,691
|
49,470
|
||||||
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Leasing equipment, net
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1,635,259
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1,707,059
|
||||||
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Operating lease right-of-use assets, net
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62,355
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37,466
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||||||
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Finance leases, net
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6,927
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8,315
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||||||
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Property, plant, and equipment, net
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964,363
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732,109
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||||||
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Investments
|
146,515
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180,550
|
||||||
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Intangible assets, net
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18,786
|
27,692
|
||||||
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Goodwill
|
122,735
|
122,639
|
||||||
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Other assets
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177,928
|
129,105
|
||||||
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Total assets
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$
|
3,387,977
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$
|
3,236,922
|
||||
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Liabilities
|
||||||||
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Accounts payable and accrued liabilities
|
$
|
113,185
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$
|
144,855
|
||||
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Debt, net
|
1,904,762
|
1,420,928
|
||||||
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Maintenance deposits
|
148,293
|
208,944
|
||||||
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Security deposits
|
37,064
|
45,252
|
||||||
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Operating lease liabilities
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62,001
|
36,968
|
||||||
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Other liabilities
|
23,351
|
41,118
|
||||||
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Total liabilities
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$
|
2,288,656
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$
|
1,898,065
|
||||
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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; 85,617,146 and 84,917,448 shares issued and outstanding as of
December 31, 2020 and 2019, respectively)
|
$
|
856
|
$
|
849
|
||||
|
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 9,120,000 and 8,050,000 shares issued and outstanding as of December
31, 2020 and 2019, respectively)
|
91
|
81
|
||||||
|
Additional paid in capital
|
1,130,106
|
1,110,122
|
||||||
|
(Accumulated deficit) retained earnings
|
(28,158
|
)
|
190,453
|
|||||
|
Accumulated other comprehensive (loss) income
|
(26,237
|
)
|
372
|
|||||
|
Shareholders' equity
|
1,076,658
|
1,301,877
|
||||||
|
Non-controlling interest in equity of consolidated subsidiaries
|
22,663
|
36,980
|
||||||
|
Total equity
|
$
|
1,099,321
|
$
|
1,338,857
|
||||
|
Total liabilities and equity
|
$
|
3,387,977
|
$
|
3,236,922
|
||||
5
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net (loss) income
|
$
|
(103,692
|
)
|
$
|
207,784
|
|||
|
Adjustments to reconcile net (loss) income to cash provided by operating activities:
|
||||||||
|
Equity in losses of unconsolidated entities
|
5,039
|
2,375
|
||||||
|
Gain on sale of subsidiaries
|
(1,331
|
)
|
(198,764
|
)
|
||||
|
Loss (gain) on sale of assets, net
|
308
|
(81,954
|
)
|
|||||
|
Security deposits and maintenance claims included in earnings
|
(6,362
|
)
|
(20,385
|
)
|
||||
|
Loss on extinguishment of debt
|
11,667
|
—
|
||||||
|
Equity-based compensation
|
2,325
|
8,404
|
||||||
|
Depreciation and amortization
|
172,400
|
171,225
|
||||||
|
Asset impairment
|
33,978
|
4,726
|
||||||
|
Change in deferred income taxes
|
(5,851
|
)
|
14,495
|
|||||
|
Change in fair value of non-hedge derivatives
|
181
|
4,555
|
||||||
|
Amortization of lease intangibles and incentives
|
30,346
|
30,162
|
||||||
|
Amortization of deferred financing costs
|
7,315
|
8,333
|
||||||
|
Bad debt expense
|
3,595
|
3,986
|
||||||
|
Other
|
1,502
|
827
|
||||||
|
Change in:
|
||||||||
|
Accounts receivable
|
(59,734
|
)
|
(22,622
|
)
|
||||
|
Other assets
|
3,660
|
(17,890
|
)
|
|||||
|
Accounts payable and accrued liabilities
|
(5,258
|
)
|
31,543
|
|||||
|
Management fees payable to affiliate
|
(20,622
|
)
|
19,080
|
|||||
|
Other liabilities
|
(6,360
|
)
|
(14,837
|
)
|
||||
|
Net cash provided by operating activities
|
63,106
|
151,043
|
||||||
|
Cash flows from investing activities:
|
||||||||
|
Investment in unconsolidated entities and available for sale securities
|
(4,690
|
)
|
(13,500
|
)
|
||||
|
Principal collections on finance leases
|
13,823
|
13,398
|
||||||
|
Acquisition of leasing equipment
|
(321,606
|
)
|
(568,569
|
)
|
||||
|
Acquisition of property, plant and equipment
|
(264,829
|
)
|
(331,171
|
)
|
||||
|
Acquisition of lease intangibles
|
1,997
|
606
|
||||||
|
Acquisition of remaining interest in JV investment
|
—
|
(28,828
|
)
|
|||||
|
Purchase deposit for aircraft and aircraft engines
|
(8,343
|
)
|
(1,000
|
)
|
||||
|
Proceeds from sale of subsidiaries
|
—
|
183,819
|
||||||
|
Proceeds from sale of leasing equipment
|
72,175
|
248,454
|
||||||
|
Return of deposit on sale of leasing equipment
|
2,350
|
—
|
||||||
|
Return of capital distributions from unconsolidated entities
|
—
|
1,555
|
||||||
|
Net cash used in investing activities
|
$
|
(509,123
|
)
|
$
|
(495,236
|
)
|
||
6
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands)
|
Year Ended December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from debt
|
$
|
1,340,981
|
$
|
788,829
|
||||
|
Repayment of debt
|
(852,197
|
)
|
(405,131
|
)
|
||||
|
Payment of deferred financing costs
|
(28,243
|
)
|
(34,218
|
)
|
||||
|
Receipt of security deposits
|
3,242
|
7,887
|
||||||
|
Return of security deposits
|
(4,655
|
)
|
(368
|
)
|
||||
|
Receipt of maintenance deposits
|
33,369
|
65,279
|
||||||
|
Release of maintenance deposits
|
(15,712
|
)
|
(26,940
|
)
|
||||
|
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs
|
19,694
|
193,992
|
||||||
|
Settlement of equity-based compensation
|
(120
|
)
|
(8,078
|
)
|
||||
|
Cash dividends - common shares
|
(113,572
|
)
|
(113,541
|
)
|
||||
|
Cash dividends - preferred shares
|
(17,869
|
)
|
(1,838
|
)
|
||||
|
Net cash provided by financing activities
|
364,918
|
465,873
|
||||||
|
Net (decrease) increase in cash and cash equivalents and restricted cash
|
(81,099
|
)
|
121,680
|
|||||
|
Cash and cash equivalents and restricted cash, beginning of period
|
242,517
|
120,837
|
||||||
|
Cash and cash equivalents and restricted cash, end of period
|
$
|
161,418
|
$
|
242,517
|
||||
|
Supplemental disclosure of cash flow information:
|
||||||||
|
Cash paid for interest, net of capitalized interest
|
$
|
71,637
|
$
|
83,164
|
||||
|
Cash paid for taxes
|
—
|
1,072
|
||||||
7
Key Performance Measures
The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure. Adjusted EBITDA is not a financial measure in accordance with GAAP.
This performance measure provides the CODM with the information necessary to assess operational performance, as well as making resource and allocation decisions. The Company believes Adjusted EBITDA is a useful metric for investors and analysts for
similar purposes of assessing its operational performance.
Adjusted EBITDA provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions.
Adjusted EBITDA is defined as net income (losses) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for income taxes, equity-based compensation expense, acquisition and transaction expenses,
losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, and interest
expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.
The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA for the three months and years ended December 31, 2020 and
December 31, 2019:
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
|
(in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
Net (loss) income attributable to shareholders from continuing operations
|
$
|
(60,523
|
)
|
$
|
112,214
|
$
|
(106,370
|
)
|
$
|
150,055
|
||||||
|
Add: Provision for (benefit from) income taxes
|
429
|
18,999
|
(5,905
|
)
|
17,810
|
|||||||||||
|
Add: Equity-based compensation expense
|
1,002
|
343
|
2,325
|
1,509
|
||||||||||||
|
Add: Acquisition and transaction expenses
|
571
|
8,498
|
9,868
|
17,623
|
||||||||||||
|
Add: Losses on the modification or extinguishment of debt and capital lease obligations
|
6,943
|
—
|
11,667
|
—
|
||||||||||||
|
Add: Changes in fair value of non-hedge derivative instruments
|
—
|
425
|
181
|
4,555
|
||||||||||||
|
Add: Asset impairment charges
|
19,587
|
4,726
|
33,978
|
4,726
|
||||||||||||
|
Add: Incentive allocations
|
—
|
15,122
|
—
|
21,231
|
||||||||||||
|
Add: Depreciation & amortization expense (1)
|
52,809
|
50,997
|
202,746
|
199,185
|
||||||||||||
|
Add: Interest expense
|
26,647
|
24,267
|
98,206
|
95,585
|
||||||||||||
|
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
|
1,375
|
(492
|
)
|
1,208
|
(1,387
|
)
|
||||||||||
|
Less: Equity in (earnings) losses of unconsolidated entities
|
(406
|
)
|
848
|
5,039
|
2,375
|
|||||||||||
|
Less: Non-controlling share of Adjusted EBITDA (3)
|
(2,231
|
)
|
(1,993
|
)
|
(9,637
|
)
|
(9,859
|
)
|
||||||||
|
Adjusted EBITDA (non-GAAP)
|
$
|
46,203
|
$
|
233,954
|
$
|
243,306
|
$
|
503,408
|
||||||||
__________________________________________________
| (1) |
Includes the following items for the three months ended December 31, 2020 and 2019: (i) depreciation and amortization expense of $45,857 and $44,843, (ii) lease intangible
amortization of $731 and $1,445 and (iii) amortization for lease incentives of $6,221 and $4,709, respectively.
|
Includes the following items for the years ended December 31, 2020 and 2019: (i) depreciation and amortization expense of $172,400 and $169,023, (ii)
lease intangible amortization of $3,747 and $7,181 and (iii) amortization for lease incentives of $26,599 and $22,981, respectively.
| (2) |
Includes the following items for the three months ended December 31, 2020 and 2019: (i) net income (loss) of $158 and $(770), (ii) interest expense of $290 and $30 and
(iii) depreciation and amortization expense of $1,716 and $248, (iv) acquisition and transaction expense of $48 and $0 and (v) changes in fair value of non-hedge derivative instruments of $(837) and $0, respectively.
|
Includes the following items for the years ended December 31, 2020 and 2019: (i) net loss of $(5,435) and $(2,563), (ii) interest expense of $1,138 and
$131, (iii) depreciation and amortization expense of $5,513 and $1,045, (iv) acquisition and transaction expense of $581 and $0 and (v) changes in fair value of non-hedge derivative instruments of $(589) and $0, respectively.
| (3) |
Includes the following items for the three months ended December 31, 2020 and 2019: (i) equity based compensation of $178 and $54, (ii) provision for income taxes of $15 and $22,
(iii) interest expense of $472 and $642, (iv) depreciation and amortization expense of $1,566 and $1,200 and (v) changes in fair value of non-hedge derivative instruments of $0 and $75, respectively.
|
Includes the following items for the years ended December 31, 2020 and 2019: (i) equity based compensation of $374 and $230, (ii) provision for income
taxes of $59 and $60, (iii) interest expense of $2,025 and $3,400, (iv) depreciation and amortization expense of $6,149 and $4,833, (v) changes in fair value of non-hedge derivative instruments of $38 and $1,336 and (vi) loss on extinguishment of
debt of $992 and $0, respectively.
8
The Company uses Funds Available for Distribution (“FAD”) in evaluating its ability to meet its stated dividend policy. The Company believes FAD is a useful metric for
investors and analysts for similar purposes. FAD is not a financial measure in accordance with GAAP. The GAAP measure most directly comparable to FAD is net cash provided by operating activities.
The Company defines FAD as: Net Cash Provided by Operating Activities plus principal collections on finance leases, proceeds from sale of assets, and return of capital
distributions from unconsolidated entities, less required payments on debt obligations and capital distributions to non-controlling interest, and excluding changes in working capital.
The following table sets forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the years ended December 31, 2020 and 2019:
|
Year Ended December 31,
|
||||||||
|
(in thousands)
|
2020
|
2019
|
||||||
|
Net Cash Provided by Operating Activities
|
$
|
63,106
|
$
|
151,043
|
||||
|
Add: Principal Collections on Finance Leases
|
13,823
|
13,398
|
||||||
|
Add: Proceeds from Sale of Assets
|
72,175
|
432,273
|
||||||
|
Add: Return of Capital Distributions from Unconsolidated Entities
|
—
|
1,555
|
||||||
|
Less: Required Payments on Debt Obligations (1)
|
—
|
(36,559
|
)
|
|||||
|
Less: Capital Distributions to Non-Controlling Interest
|
—
|
—
|
||||||
|
Exclude: Changes in Working Capital
|
88,314
|
4,726
|
||||||
|
Funds Available for Distribution (FAD)
|
$
|
237,418
|
$
|
566,436
|
||||
_____________________________________________________
| (1) |
Required payments on debt obligations for the year ended December 31, 2020 exclude repayments of $306,206 for the 2022 Notes, $270,000 for the Revolving Credit Facility, $144,200 for
the Series 2016 Bonds, $50,262 for the Jefferson Revolver, $45,520 for the Series 2012 Bonds and $36,009 for the FTAI Pride Credit Agreement, and for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit
Facility and $18,572 for the CMQR Credit Agreement
|
The following tables set forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the three months ended and year ended December 31, 2020:
|
Three Months Ended December 31, 2020
|
||||||||||||||||
|
(in thousands)
|
Equipment Leasing
|
Infrastructure
|
Corporate and Other
|
Total
|
||||||||||||
|
Funds Available for Distribution (FAD)
|
$
|
89,946
|
$
|
(1,840
|
)
|
$
|
(33,890
|
)
|
$
|
54,216
|
||||||
|
Less: Principal Collections on Finance Leases
|
(6,822
|
)
|
||||||||||||||
|
Less: Proceeds from Sale of Assets
|
(18,468
|
)
|
||||||||||||||
|
Less: Return of Capital Distributions from Unconsolidated Entities
|
—
|
|||||||||||||||
|
Add: Required Payments on Debt Obligations
|
—
|
|||||||||||||||
|
Add: Capital Distributions to Non-Controlling Interest
|
—
|
|||||||||||||||
|
Include: Changes in Working Capital
|
5,787
|
|||||||||||||||
|
Net Cash Provided by Operating Activities
|
$
|
34,713
|
||||||||||||||
9
|
Year Ended December 31, 2020
|
||||||||||||||||
|
(in thousands)
|
Equipment Leasing
|
Infrastructure
|
Corporate and Other
|
Total
|
||||||||||||
|
Funds Available for Distribution (FAD)
|
$
|
367,863
|
$
|
(7,115
|
)
|
$
|
(123,330
|
)
|
$
|
237,418
|
||||||
|
Less: Principal Collections on Finance Leases
|
(13,823
|
)
|
||||||||||||||
|
Less: Proceeds from Sale of Assets
|
(72,175
|
)
|
||||||||||||||
|
Less: Return of Capital Distributions from Unconsolidated Entities
|
—
|
|||||||||||||||
|
Add: Required Payments on Debt Obligations
|
—
|
|||||||||||||||
|
Add: Capital Distributions to Non-Controlling Interest
|
—
|
|||||||||||||||
|
Include: Changes in Working Capital
|
(88,314
|
)
|
||||||||||||||
|
Net Cash Provided by Operating Activities
|
$
|
63,106
|
||||||||||||||
FAD is subject to a number of limitations and assumptions and there can be no assurance that the Company will generate FAD sufficient to meet its intended dividends. FAD
has material limitations as a liquidity measure of the Company because such measure excludes items that are required elements of the Company’s net cash provided by operating activities as described below. FAD should not be considered in isolation nor
as a substitute for analysis of the Company’s results of operations under GAAP, and it is not the only metric that should be considered in evaluating the Company’s ability to meet its stated dividend policy. Specifically:
| ● |
FAD does not include equity capital called from the Company’s existing limited partners, proceeds from any debt issuance or future equity offering, historical cash and cash
equivalents and expected investments in the Company’s operations.
|
| ● |
FAD does not give pro forma effect to prior acquisitions, certain of which cannot be quantified.
|
| ● |
While FAD reflects the cash inflows from sale of certain assets, FAD does not reflect the cash outflows to acquire assets as the Company relies on alternative sources of liquidity to fund such purchases.
|
| ● |
FAD does not reflect expenditures related to capital expenditures, acquisitions and other investments as the Company has multiple sources of liquidity and intends to
fund these expenditures with future incurrences of indebtedness, additional capital contributions and/or future issuances of equity.
|
| ● |
FAD does not reflect any maintenance capital expenditures necessary to maintain the same level of cash generation from our capital investments.
|
| ● |
FAD does not reflect changes in working capital balances as management believes that changes in working capital are primarily driven by short term timing differences,
which are not meaningful to the Company’s distribution decisions.
|
| ● |
Management has significant discretion to make distributions, and the Company is not bound by any contractual provision that requires it to use cash for distributions.
|
If such factors were included in FAD, there can be no assurance that the results would be consistent with the Company’s presentation of FAD.
10