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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution Components
U.S. Long Term Capital Gain(1)		$	—
Non-U.S. Long Term Capital Gain		$	—
U.S. Portfolio Interest Income (2)		$	0.0930
U.S. Dividend Income (3)		$	—
Income Not from U.S. Sources(4) / Return of Capital		$	0.2370
Distribution Per Share		$	0.3300

 

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

 

2)	Eligible for the U.S. portfolio interest exemption for any holder not considered a 10-Percent shareholder under §871(h)(3)(B) of the Code.

 

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

 

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

 

 

		Three Months Ended March 31,
(Dollar amounts in thousands, except share and per share data)		2017				2016
Revenues
Equipment leasing revenues		$	31,388			$	19,575
Infrastructure revenues			13,285				11,878
Total revenues			44,673				31,453
Expenses
Operating expenses			21,013				14,358
General and administrative			3,835				2,588
Acquisition and transaction expenses			1,452				1,059
Management fees and incentive allocation to affiliate			3,893				4,348
Depreciation and amortization			17,377				13,217
Interest expense			4,694				5,303
Total expenses			52,264				40,873
Other (expense) income
Equity in (losses) earnings of unconsolidated entities			(1,266	)			85
Gain on sale of equipment and finance leases, net			2,018				1,722
Loss on extinguishment of debt			(2,456	)			(1,579	)
Interest income			283				9
Other income			12				40
Total other (expense) income			(1,409	)			277
Loss before income taxes			(9,000	)			(9,143	)
Provision for (benefit from) income taxes			212				(66	)
Net loss			(9,212	)			(9,077	)
Less:  Net loss attributable to non-controlling interests in consolidated subsidiaries			(4,798	)			(3,295	)
Net loss attributable to shareholders		$	(4,414	)		$	(5,782	)
Basic and Diluted Loss per Share:		$	(0.06	)		$	(0.08	)
Basic			75,762,283				75,727,369
Diluted			75,762,283				75,727,369

 

 

(Dollar amounts in thousands, except share and per share data)		(Unaudited) March 31, 2017				December 31, 2016
Assets
Cash and cash equivalents		$	221,222			$	68,055
Restricted cash			56,032				65,441
Accounts receivable, net			22,616				21,358
Leasing equipment, net			829,275				765,455
Finance leases, net			9,607				9,717
Property, plant, and equipment, net			363,775				352,181
Investments (includes $30,821 and $17,630 available-for-sale securities at fair value as of March 31, 2017 and December 31, 2016, respectively)			58,181				39,978
Intangible assets, net			36,638				38,954
Goodwill			116,584				116,584
Other assets			45,168				69,589
Total assets		$	1,759,098			$	1,547,312
Liabilities
Accounts payable and accrued liabilities		$	33,362			$	38,239
Debt, net			495,482				259,512
Maintenance deposits			52,216				45,394
Security deposits			21,636				19,947
Other liabilities			19,841				18,540
Total liabilities			622,537				381,632
Equity
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 75,762,674 and 75,750,943 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively)			758				758
Additional paid in capital			1,059,904				1,084,757
Accumulated deficit			(43,247	)			(38,833	)
Accumulated other comprehensive income			11,989				7,130
Shareholders’ equity			1,029,404				1,053,812
Non-controlling interest in equity of consolidated subsidiaries			107,157				111,868
Total equity			1,136,561				1,165,680
Total liabilities and equity		$	1,759,098			$	1,547,312

 

 

		Three Months Ended March 31,
		2017				2016
Cash flows from operating activities:
Net loss		$	(9,212	)		$	(9,077	)
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in losses of unconsolidated entities			1,266				(85	)
Gain on sale of equipment and finance leases, net			(2,018	)			(1,722	)
Loss on extinguishment of debt			2,456				1,579
Equity-based compensation			87				(3,963	)
Depreciation and amortization			17,377				13,217
Change in current and deferred income taxes			209				(389	)
Change in fair value of non-hedge derivative			—				3
Amortization of lease intangibles and incentives			1,949				1,637
Amortization of deferred financing costs			1,133				585
Operating distributions from unconsolidated entities			—				30
Bad debt expense			31				32
Other			37				138
Change in:
Accounts receivable			(1,626	)			(1,769	)
Other assets			11,227				(2,849	)
Accounts payable and accrued liabilities			(4,992	)			(1,284	)
Management fees payable to affiliate			(347	)			(81	)
Other liabilities			103				199
Net cash provided by (used in) operating activities			17,680				(3,799	)
Cash flows from investing activities:
Change in restricted cash			9,409				(2,917	)
Investment in notes receivable			—				(408	)
Investment in unconsolidated entities and available for sale securities			(14,654	)			—
Principal collections on finance leases			110				2,204
Acquisition of leasing equipment			(67,695	)			(27,317	)
Acquisition of property plant and equipment			(14,796	)			(8,622	)
Purchase deposit for aircraft and aircraft engines			(1,120	)			(3,275	)
Proceeds from sale of finance leases			—				71,000
Proceeds from sale of leasing equipment			9,834				4,392
Proceeds from sale of property, plant and equipment			52				36
Proceeds from deposit on sale of leasing equipment			60				—
Return of capital distributions from unconsolidated entities			—				401
Net cash (used in) provided by investing activities		$	(78,800	)		$	35,494
Cash flows from financing activities:
Proceeds from debt			235,411				103,158
Repayment of debt			(1,562	)			(146,410	)
Payment of deferred financing costs			(366	)			(2,494	)
Receipt of security deposits			1,425				455
Return of security deposits			(32	)			(124	)
Receipt of maintenance deposits			4,424				3,071
Release of maintenance deposits			—				(5,385	)
Capital contributions from non-controlling interests			—				6,420
Cash dividends			(25,013	)			(24,177	)
Net cash provided by (used in) financing activities		$	214,287			$	(65,486	)
Net increase (decrease) in cash and cash equivalents		$	153,167			$	(33,791	)
Cash and cash equivalents, beginning of period			68,055				381,703
Cash and cash equivalents, end of period		$	221,222			$	347,912

 

 

 

 

		Three Months Ended March 31,
(in thousands)		2017				2016
Net loss attributable to shareholders		$	(4,414	)		$	(5,782	)
Add: Provision for (benefit from) income taxes			212				(66	)
Add: Equity-based compensation expense (income)			87				(3,963	)
Add: Acquisition and transaction expenses			1,452				1,059
Add: Losses on the modification or extinguishment of debt and capital lease obligations			2,456				1,579
Add: Changes in fair value of non-hedge derivative instruments			—				3
Add: Asset impairment charges			—				—
Add: Pro-rata share of Adjusted Net (Loss) Income from unconsolidated entities (1)			(1,266	)			85
Add: Incentive allocations			—				—
Less: Cash payments for income taxes			(3	)			(351	)
Less: Equity in losses (earnings) of unconsolidated entities			1,266				(85	)
Less: Non-controlling share of Adjusted Net (Income) Loss (2)			(39	)			989
Adjusted Net Loss		$	(249	)		$	(6,532	)

 

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(1)	Pro-rata share of Adjusted Net (Loss) Income from unconsolidated entities includes the Company’s proportionate share of the unconsolidated entities’ net income adjusted for the excluded and included items detailed in the table above, for which there were no adjustments.

 

(2)

Non-controlling share of Adjusted Net (Loss) Income is comprised of the following for the three months ended March 31, 2017 and 2016: (i) equity-based compensation of $25 and $(1,619), (ii) provision for income tax of $15 and $14, and (iii) loss on extinguishment of debt of $0 and $616, less (iv) cash tax payments of $1 and $0, respectively.

 

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

 

Adjusted EBITDA is defined as net income attributable to shareholders, adjusted (a) to exclude the impact of provision for income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

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

 

		Three Months Ended March 31,
(in thousands)		2017				2016
Net loss attributable to shareholders		$	(4,414	)		$	(5,782	)
Add: Provision for (benefit from) income taxes			212				(66	)
Add: Equity-based compensation expense (income)			87				(3,963	)
Add: Acquisition and transaction expenses			1,452				1,059
Add: Losses on the modification or extinguishment of debt and capital lease obligations			2,456				1,579
Add: Changes in fair value of non-hedge derivative instruments			—				3
Add: Asset impairment charges			—				—
Add: Incentive allocations			—				—
Add: Depreciation and amortization expense (3)			19,306				14,854
Add: Interest expense			4,694				5,303
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (4)			(680	)			1,372
Less: Equity in losses (earnings) of unconsolidated entities			1,266				(85	)
Less: Non-controlling share of Adjusted EBITDA (5)			(2,242	)			(2,033	)
Adjusted EBITDA (non-GAAP)		$	22,137			$	12,241

 

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We use Funds Available for Distribution (“FAD”) in evaluating its ability to meet its stated dividend policy. FAD is not a financial measure in accordance with GAAP. The GAAP measure most directly comparable to FAD is net cash provided by operating activities. We believe FAD is a useful metric for investors and analysts for similar purposes.

 

We define FAD as: net cash provided by operating activities plus principal collections on finance leases, proceeds from sale of assets, and return of capital distributions from unconsolidated entities, less required payments on debt obligations and capital distributions to non-controlling interest, and excluding changes in working capital.

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

 

		Three Months Ended March 31,
(in thousands)		2017				2016
Net Cash Provided by (Used in) Operating Activities		$	17,680			$	(3,799	)
Add: Principal Collections on Finance Leases			110				2,204
Add: Proceeds from sale of assets (1)			9,885				75,928
Add: Return of Capital Distributions from Unconsolidated Entities			—				401
Less: Required Payments on Debt Obligations (2)			(1,562	)			(47,660	)
Less: Capital Distributions to Non-Controlling Interest			—				—
Exclude: Changes in Working Capital			(4,365	)			5,784
Funds Available for Distribution (FAD)		$	21,748			$	32,858

 

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The following tables set forth a reconciliation of Cash from Operating Activities to FAD for the three months ended March 31, 2017 and March 31, 2016:

 

		Three Months Ended March 31, 2017
(in thousands)		Equipment Leasing				Infrastructure				Corporate				Total
Funds Available for Distribution (FAD)		$	35,759			$	(3,688	)		$	(10,323	)		$	21,748
Less: Principal Collections on Finance Leases															(110	)
Less: Proceeds from sale of assets															(9,885	)
Less: Return of Capital Distributions from Unconsolidated Entities															—
Add: Required Payments on Debt Obligations															1,562
Add: Capital Distributions to Non-Controlling Interest															—
Include: Changes in Working Capital															4,365
Cash from Operating Activities														$	17,680

		Three Months Ended March 31, 2016
(in thousands)		Equipment Leasing				Infrastructure				Corporate				Total
Funds Available for Distribution (FAD)		$	46,057			$	(5,201	)		$	(7,998	)		$	32,858
Less: Principal Collections on Finance Leases															(2,204	)
Less: Proceeds from sale of assets															(75,928	)
Less: Return of Capital Distributions from Unconsolidated Entities															(401	)
Add: Required Payments on Debt Obligations															47,660
Add: Capital Distributions to Non-Controlling Interest															—
Include: Changes in Working Capital															(5,784	)
Cash used in Operating Activities														$	(3,799	)

FAD is subject to a number of limitations and assumptions and there can be no assurance that the Company will generate FAD sufficient to meet its intended dividends. FAD has material limitations as a liquidity measure of the Company because such measure excludes items that are required elements of the Company’s net cash provided by operating activities as described below. FAD should not be considered in isolation nor as a substitute for analysis of the Company’s results of operations under GAAP, and it is not the only metric that should be considered in evaluating the Company’s ability to meet its stated dividend policy. Specifically:

 

•	FAD does not include equity capital called from the Company’s existing limited partners, proceeds from any debt issuance or future equity offering, historical cash and cash equivalents and expected investments in the Company’s operations.

 

•	FAD does not give pro forma effect to prior acquisitions, certain of which cannot be quantified.

 

•	While FAD reflects the cash inflows from sale of certain assets, FAD does not reflect the cash outflows to acquire assets as the Company relies on alternative sources of liquidity to fund such purchases.

 

•	FAD does not reflect expenditures related to capital expenditures, acquisitions and other investments as the Company has multiple sources of liquidity and intends to fund these expenditures with future incurrences of indebtedness, additional capital contributions and/or future issuances of equity.

 

•	FAD does not reflect any maintenance capital expenditures necessary to maintain the same level of cash generation from our capital investments.

 

•	FAD does not reflect changes in working capital balances as management believes that changes in working capital are primarily driven by short term timing differences, which are not meaningful to the Company’s distribution decisions.

 

•	Management has significant discretion to make distributions, and the Company is not bound by any contractual provision that requires it to use cash for distributions.

 

If such factors were included in FAD, there can be no assurance that the results would be consistent with the Company’s presentation of FAD.

 

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