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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 22, 2024
 
FTAI Aviation Ltd.
(Exact Name of Registrant as Specified in its Charter)

Cayman Islands
001-37386
98-1420784
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
1345 Avenue of the Americas, 45th Floor, New York, New York 10105
(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:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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:

Title of each class:
Trading Symbol:
Name of each exchange on which registered:
Class A Common shares, $0.01 par value per share
FTAI
The Nasdaq Global Select Market
8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares
FTAIP
The Nasdaq Global Select Market
8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares
FTAIO
The Nasdaq Global Select Market
8.25% Fixed Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares
FTAIN
The Nasdaq Global Select Market
9.50% Fixed Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares
FTAIM
The Nasdaq Global Select Market

Item 2.02.
Results of Operations and Financial Condition.
 
On February 22, 2024, FTAI Aviation Ltd. (“FTAI” or the “Company”) issued a press release announcing the Company’s results for its fiscal quarter and year ended December 31, 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.
 
Item 9.01
Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number
Description


 

Press release, dated February 22, 2024, issued by FTAI Aviation Ltd.
104
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

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.
FTAI Aviation Ltd.




By:
/s/ Eun (Angela) Nam

Name:
Eun (Angela) Nam

Title:
Chief Financial Officer and Chief Accounting Officer



Date: February 22, 2024



Exhibit 99.1



PRESS RELEASE

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

______________________________________________________________________________________________________

NEW YORK, February 22, 2024 (GLOBE NEWSWIRE) – FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the fourth quarter and full year 2023. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.

Financial Overview

(in thousands, except per share data)
  
Selected Financial Results
    
Q4’23
  
Net Income Attributable to Shareholders
  
$
110,025
  
Basic Earnings per Ordinary Share from Continuing Operations
  
$
1.10
  
Diluted Earnings per Ordinary Share from Continuing Operations
  
$
1.09
  
Adjusted EBITDA(1)
  
$
162,331
  
_______________________________
(1)  For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

Fourth Quarter 2023 Dividends

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

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

Business Highlights


 •
Q4 2023 Aerospace Products Adj. EBITDA of $55 million, bringing total segment Adj. EBITDA for 2023 to $160 million, up from $74 million in 2022. (1)

•
Sold 61 modules to 17 unique customers in Q4, including 6 new customers and 11 repeat customers. Modules sold in 2023 total 178 to 30 customers.

•
Launched V2500 Engine exchange program.

1

 •
Acquired $229 million of Aviation Leasing Equipment in Q4, comprised of 11 Aircraft and 32 Engines.

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

Additional Information

For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investor Center section of the Company’s website, https://www.ftaiaviation.com, and the Company’s Annual Report on Form 10-K, when available on the Company’s website. Nothing on the Company’s website is included or incorporated by reference herein.

Conference Call

In addition, management will host a conference call on Friday, February 23, 2024 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BI5208d5ee8f4a42ec950edf6b9a21c1c2. Once registered, participants will receive a dial-in and unique pin to access the call.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at https://www.ftaiaviation.com/. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A replay of the conference call will be available after 11:30 A.M. on Friday, February 23, 2024 through 11:30 A.M. on Friday, March 1, 2024 on https://ir.ftaiaviation.com/news-events/presentations.

The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and should not be considered a part of, this press release.

About FTAI Aviation Ltd.

FTAI owns and maintains commercial jet engines with a focus on CFM56 and V2500 engines. FTAI’s propriety portfolio of products, including The Module Factory and a joint venture to manufacture engine PMA, enables it to provide cost savings and flexibility to our airline, lessor, and maintenance, repair, and operations customer base. Additionally, FTAI owns and leases jet aircraft which often facilitates the acquisition of engines at attractive prices. FTAI invests in aviation assets and aerospace products that generate strong and stable cash flows with the potential for earnings growth and asset appreciation.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control. The Company can give no assurance that its expectations will be attained and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.ftaiaviation.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

For further information, please contact:

Alan Andreini
Investor Relations
FTAI Aviation Ltd.
(646) 734-9414
aandreini@fortress.com

2
Exhibit - Financial Statements

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

   
Three Months Ended December 31,
    
Year Ended December 31,
  
   
2023
    
2022
    
2023
    
2022
  
Total revenues
  
$
312,737
    
$
274,291
    
$
1,170,896
    
$
708,411
  
                                 
Expenses
                                
Cost of sales
    
135,223
      
128,246
      
502,132
      
248,385
  
Operating expenses
    
28,945
      
24,067
      
110,163
      
132,264
  
General and administrative
    
3,430
      
2,343
      
13,700
      
14,164
  
Acquisition and transaction expenses
    
4,999
      
4,867
      
15,194
      
13,207
  
Management fees and incentive allocation to affiliate
    
4,900
      
3,558
      
18,037
      
3,562
  
Depreciation and amortization
    
46,478
      
37,456
      
169,877
      
152,917
  
Asset impairment
    
901
      
9,048
      
2,121
      
137,219
  
Interest expense
    
43,663
      
36,997
      
161,639
      
169,194
  
Total expenses
    
268,539
      
246,582
      
992,863
      
870,912
  
                                 
Other income (expense)
                                
Equity in income (losses) of unconsolidated entities
    
63
      
(244
)
    
(1,606
)
    
(369
)
(Loss) gain on sale of assets, net
    
—
      
(2,722
)
    
—
      
77,211
  
Gain (loss) on extinguishment of debt
    
—
      
2
      
—
      
(19,859
)
Other income (expense)
    
6,713
      
(1
)
    
7,590
      
207
  
Total other income (expense)
    
6,776
      
(2,965
)
    
5,984
      
57,190
  
Income (loss) from continuing operations before income taxes
    
50,974
      
24,744
      
184,017
      
(105,311
)
(Benefit from) provision for income taxes
    
(67,386
)
    
(2,057
)
    
(59,800
)
    
5,300
  
Net income (loss) from continuing operations
    
118,360
      
26,801
      
243,817
      
(110,611
)
Net loss from discontinued operations, net of income taxes
    
—
      
—
      
—
      
(101,416
)
Net income (loss)
    
118,360
      
26,801
      
243,817
      
(212,027
)
Less: Net income (loss) attributable to non-controlling interests in consolidated subsidiaries:
                                
Continuing operations
    
—
      
—
      
—
      
—
  
Discontinued operations
    
—
      
—
      
—
      
(18,817
)
Less: Dividends on preferred shares
    
8,335
      
6,791
      
31,795
      
27,164
  
Net income (loss) attributable to shareholders
  
$
110,025
    
$
20,010
    
$
212,022
    
$
(220,374
)
                                 
Earnings (loss) per share:
                                
Basic
                                
Continuing operations
  
$
1.10
    
$
0.20
    
$
2.12
    
$
(1.39
)
Discontinued operations
  
$
—
    
$
—
    
$
—
    
$
(0.83
)
Diluted
                                
Continuing operations
  
$
1.09
    
$
0.20
    
$
2.11
    
$
(1.39
)
Discontinued operations
  
$
—
    
$
—
    
$
—
    
$
(0.83
)
Weighted average shares outstanding:
                                
Basic
    
100,239,011
      
99,566,387
      
99,908,214
      
99,421,008
  
Diluted
    
100,853,151
      
100,180,524
      
100,425,777
      
99,421,008
  

3
FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)

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

4
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)

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

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

6
Key Performance Measures

The Chief Operating Decision Maker (“CODM”) utilizes Adjusted EBITDA as our key performance measure.

Adjusted EBITDA provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares, and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

The following table sets forth a reconciliation of net income (loss) attributable to shareholders to Adjusted EBITDA for the three and twelve months ended December 31, 2023 and 2022:

   
Three Months Ended December 31,
    
Year Ended December 31,
  
(in thousands)
  
2023
    
2022
    
2023
    
2022
  
Net income (loss) attributable to shareholders from continuing operations
  
$
110,025
    
$
20,010
    
$
212,022
    
$
(137,775
)
Add: (Benefit from) provision for income taxes
    
(67,386
)
    
(2,057
)
    
(59,800
)
    
5,300
  
Add: Equity-based compensation expense
    
510
      
—
      
1,638
      
—
  
Add: Acquisition and transaction expenses
    
4,999
      
4,867
      
15,194
      
13,207
  
Add: (Gain) loss on the modification or extinguishment of debt and capital lease obligations
    
—
      
(2
)
    
—
      
19,859
  
Add: Changes in fair value of non-hedge derivative instruments
    
—
      
—
      
—
      
—
  
Add: Asset impairment charges
    
901
      
9,048
      
2,121
      
137,219
  
Add: Incentive allocations
    
4,576
      
3,489
      
17,116
      
3,489
  
Add: Depreciation & amortization expense (1)
    
56,557
      
44,277
      
213,641
      
190,031
  
Add: Interest expense and dividends on preferred shares
    
51,998
      
43,788
      
193,434
      
196,358
  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
    
214
      
(125
)
    
310
      
40
  
Less: Equity in (earnings) losses of unconsolidated entities
    
(63
)
    
244
      
1,606
      
369
  
Less: Non-controlling share of Adjusted EBITDA
    
—
      
—
      
—
      
—
  
Adjusted EBITDA (non-GAAP)
  
$
162,331
    
$
123,539
    
$
597,282
    
$
428,097
  
__________________________________________________
(1) Includes the following items for the three months ended December 31, 2023 and 2022: (i) depreciation and amortization expense of $46,478 and $37,456, (ii) lease intangible amortization of $3,801 and $3,654 and (iii) amortization for lease incentives of $6,278 and $3,167, respectively.

Includes the following items for the years ended December 31, 2023 and 2022: (i) depreciation and amortization expense of $169,877 and $152,917, (ii) lease intangible amortization of $15,126 and $13,913 and (iii) amortization for lease incentives of $28,638 and $23,201, respectively.

(2) Includes the following items for the three months ended December 31, 2023 and 2022: (i) net income (loss) of $63 and $(244), (ii) depreciation and amortization expense of $286 and $119 and (iii) acquisition and transaction expense of $(135) and $0, respectively.

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

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