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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): May 2, 2019

Fortress Transportation and Infrastructure Investors LLC
(Exact Name of Registrant as Specified in its Charter)

Delaware
001-37386
32-0434238
(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
New York Stock Exchange (NYSE)

Item 2.02.
Results of Operations and Financial Condition.

On May 2, 2019, the Company issued a press release announcing the Company’s results for its fiscal quarter ended March 31, 2019. 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 May 2, 2019, issued by Fortress Transportation and Infrastructure Investors LLC

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.

 
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
     
 
By:
/s/ Scott Christopher
 
Name:
Scott Christopher
 
Title:
Chief Financial Officer

Date: May 2, 2019


Exhibit 99.1


PRESS RELEASE

FTAI Reports First Quarter 2019 Results, Dividend of $0.33 per Common Share


NEW YORK, [May 2, 2019] – Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company”) today reported financial results for the three months ended March 31, 2019. 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
    
Q1’19
  
Net Cash Provided by Operating Activities
  
$
20,270
  
Net Loss Attributable to Shareholders
  
$
(6,380
)
Basic and Diluted Loss per Share
  
$
(0.07
)
         
Funds Available for Distribution (“FAD”) (1)
  
$
70,183
  
Adjusted EBITDA(1)
  
$
66,290
  

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

For the first quarter of 2019, our total FAD was $70.2 million. This amount includes $101.1 million from aviation leasing activities, offset by $(4.1) million and $(26.8) million from infrastructure and corporate and other activities, respectively.

First Quarter 2019 Dividend

On May 2, 2019, the Company’s Board of Directors declared a cash dividend on its common shares of $0.33 per share for the quarter ended March 31, 2019, payable on May 28, 2019 to the holders of record on May 17, 2019.

“Considering our net loss attributable to shareholders, we achieved our best adjusted EBITDA quarter ever with infrastructure again being a positive EBITDA contributor.  In addition, this was also our best quarter from a value creation perspective.  We increased our products and relationships in our value add engine leasing business, including a new partnership with United Airlines, grew contractual relationships at Jefferson Terminal, signed long-term offtakes at Long Ridge energy terminal and we are seeing strong customer demand for terminal services at Repauno,” said Joe Adams, the Company’s CEO.

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 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

The Company will host a conference call on Friday, May 3, 2019 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing 1-877-447-5636 (from within the U.S.) or 1-615-247-0080 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “FTAI First 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.

1
Following the call, a replay of the conference call will be available after 12:00 P.M. on Friday, May 3, 2019 through midnight Friday, May 10, 2019 at 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.), Passcode: 5076638.

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 including, but not limited to, statements regarding future value creation. 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 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 dividend declared in May 2019 will be treated as a partnership distribution.  For tax withholding purposes, the per share distribution components are as follows:

Distribution Components
      
Non-U.S. Long Term Capital Gain
  
$
—
  
U.S. Portfolio Interest Income(1)
  
$
0.1100
  
U.S. Dividend Income(2)
  
$
—
  
Income Not from U.S. Sources(3)
  
$
0.2200
  
Distribution Per Share
  
$
0.3300
  

 
(1)
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.

 
(2)
This income is subject to withholding under §1441 of the Code.

 
(3)
This income is not subject to withholding under §1441 or §1446 of the Code.

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)

   
Three Months Ended March 31,
  
(Dollar amounts in thousands, except share and per share data)
  
2019
    
2018
  
Revenues
            
Equipment leasing revenues
  
$
72,452
    
$
55,784
  
Infrastructure revenues
    
52,175
      
13,060
  
Total revenues
    
124,627
      
68,844
  
                 
Expenses
                
Operating expenses
    
61,918
      
27,579
  
General and administrative
    
4,732
      
3,586
  
Acquisition and transaction expenses
    
1,474
      
1,766
  
Management fees and incentive allocation to affiliate
    
3,838
      
3,739
  
Depreciation and amortization
    
39,533
      
29,587
  
Interest expense
    
21,303
      
11,871
  
Total expenses
    
132,798
      
78,128
  
                 
Other income (expense)
                
Equity in (losses) earnings of unconsolidated entities
    
(384
)
    
95
  
Gain (loss) on sale of equipment, net
    
1,725
      
(5
)
Interest income
    
91
      
176
  
Other (expense) income
    
(2,604
)
    
180
  
Total other (expense) income
    
(1,172
)
    
446
  
                 
Loss before income taxes
    
(9,343
)
    
(8,838
)
Provision for income taxes
    
453
      
495
  
Net loss
    
(9,796
)
    
(9,333
)
Less:  Net loss attributable to non-controlling interests in consolidated subsidiaries
    
(3,416
)
    
(8,761
)
Net loss attributable to shareholders
  
$
(6,380
)
  
$
(572
)
                 
Loss per share
                
Basic
  
$
(0.07
)
  
$
(0.01
)
Diluted
  
$
(0.07
)
  
$
(0.01
)
                 
Weighted Average Shares Outstanding:
                
Basic
    
85,986,453
      
81,534,454
  
Diluted
    
85,986,453
      
81,534,454
  

4
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except share and per share data)
  
(Unaudited)
March 31, 2019
    
December 31, 2018
  
Assets
            
Cash and cash equivalents
  
$
120,515
    
$
99,601
  
Restricted cash
    
108,058
      
21,236
  
Accounts receivable, net
    
50,586
      
53,789
  
Leasing equipment, net
    
1,471,794
      
1,432,210
  
Operating lease right-of-use assets, net
    
44,241
      
—
  
Finance leases, net
    
21,158
      
18,623
  
Property, plant, and equipment, net
    
788,668
      
708,853
  
Investments
    
39,778
      
40,560
  
Intangible assets, net
    
35,604
      
38,513
  
Goodwill
    
116,584
      
116,584
  
Other assets
    
150,714
      
108,809
  
Total assets
  
$
2,947,700
    
$
2,638,778
  
                 
Liabilities
                
Accounts payable and accrued liabilities
  
$
97,415
    
$
112,188
  
Debt, net
    
1,540,017
      
1,237,347
  
Maintenance deposits
    
166,749
      
158,163
  
Security deposits
    
38,638
      
38,539
  
Operating lease liabilities
    
44,719
      
—
  
Other liabilities
    
87,108
      
38,759
  
Total liabilities
  
$
1,974,646
    
$
1,584,996
  
                 
Commitments and contingencies
                
                 
Equity
                
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 84,477,791 and 84,050,889 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively)
    
845
      
840
  
Additional paid in capital
    
1,001,223
      
1,029,376
  
Accumulated deficit
    
(39,197
)
    
(32,817
)
Accumulated other comprehensive loss
    
(43,012
)
    
—
  
Shareholders' equity
    
919,859
      
997,399
  
Non-controlling interest in equity of consolidated subsidiaries
    
53,195
      
56,383
  
Total equity
    
973,054
      
1,053,782
  
Total liabilities and equity
  
$
2,947,700
    
$
2,638,778
  

5
FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollar amounts in thousands, unless otherwise noted)

   
Three Months Ended March 31,
  
   
2019
    
2018
  
Cash flows from operating activities:
            
Net loss
  
$
(9,796
)
  
$
(9,333
)
Adjustments to reconcile net loss to net cash provided by operating activities:
                
Equity in losses (earnings) of unconsolidated entities
    
384
      
(95
)
(Gain) loss on sale of equipment, net
    
(1,725
)
    
5
  
Security deposits and maintenance claims included in earnings
    
(2,953
)
    
(383
)
Equity-based compensation
    
228
      
208
  
Depreciation and amortization
    
39,533
      
29,587
  
Change in current and deferred income taxes
    
338
      
504
  
Change in fair value of non-hedge derivative
    
3,220
      
(624
)
Amortization of lease intangibles and incentives
    
8,334
      
7,226
  
Amortization of deferred financing costs
    
2,025
      
1,151
  
Bad debt expense
    
2,950
      
1,441
  
Other
    
221
      
9
  
Change in:
                
Accounts receivable
    
(1,127
)
    
(7,387
)
Other assets
    
(5,295
)
    
1,176
  
Accounts payable and accrued liabilities
    
(14,348
)
    
(9,768
)
Management fees payable to affiliate
    
(1,158
)
    
(1,300
)
Other liabilities
    
(561
)
    
(947
)
Net cash provided by operating activities
    
20,270
      
11,470
  
                 
Cash flows from investing activities:
                
Investment in notes receivable
    
—
      
(912
)
Investment in unconsolidated entities and available for sale securities
    
—
      
(1,115
)
Principal collections on finance leases
    
1,289
      
129
  
Acquisition of leasing equipment
    
(108,919
)
    
(86,043
)
Acquisition of property, plant and equipment
    
(81,241
)
    
(23,641
)
Acquisition of lease intangibles
    
(589
)
    
(1,029
)
Purchase deposits for acquisitions
    
(4,625
)
    
(6,886
)
Proceeds from sale of leasing equipment
    
27,292
      
6,136
  
Proceeds from sale of property, plant and equipment
    
7
      
38
  
Return of capital distributions from unconsolidated entities
    
398
      
—
  
Return of purchase deposit for aircraft and aircraft engines
    
—
      
240
  
Return of deposit on sale of engine
    
—
      
(400
)
Net cash used in investing activities
    
(166,388
)
    
(113,483
)
Cash flows from financing activities:
                
Proceeds from debt
    
352,680
      
18,600
  
Repayment of debt
    
(47,222
)
    
(12,612
)
Payment of deferred financing costs
    
(28,611
)
    
(71
)
Receipt of security deposits
    
1,935
      
1,864
  
Return of security deposits
    
(233
)
    
(700
)
Receipt of maintenance deposits
    
13,495
      
9,720
  
Release of maintenance deposits
    
(9,807
)
    
(1,840
)
Proceeds from issuance of common shares, net of underwriter's discount
    
—
      
128,450
  
Common shares issuance costs
    
—
      
(132
)
Cash dividends
    
(28,383
)
    
(27,333
)
Net cash provided by financing activities
    
253,854
      
115,946
  
                 
Net increase in cash and cash equivalents and restricted cash
    
107,736
      
13,933
  
Cash and cash equivalents and restricted cash, beginning of period
    
120,837
      
92,806
  
Cash and cash equivalents and restricted cash, end of period
  
$
228,573
    
$
106,739
  

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, 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 loss attributable to shareholders to Adjusted EBITDA for the three months ended March 31, 2019 and 2018:

   
Three Months Ended March 31,
  
(in thousands)
  
2019
    
2018
  
Net loss attributable to shareholders
  
$
(6,380
)
  
$
(572
)
Add: Provision for income taxes
    
453
      
495
  
Add: Equity-based compensation expense
    
228
      
208
  
Add: Acquisition and transaction expenses
    
1,474
      
1,766
  
Add: Losses on the modification or extinguishment of debt and capital lease obligations
    
—
      
—
  
Add: Changes in fair value of non-hedge derivative instruments
    
3,220
      
624
  
Add: Asset impairment charges
    
—
      
—
  
Add: Incentive allocations
    
162
      
—
  
Add: Depreciation and amortization expense (1)
    
47,867
      
36,814
  
Add: Interest expense
    
21,303
      
11,871
  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
    
(118
)
    
175
  
Less: Equity in losses (earnings) of unconsolidated entities
    
384
      
(95
)
Less: Non-controlling share of Adjusted EBITDA (3)
    
(2,303
)
    
(3,165
)
Adjusted EBITDA (non-GAAP)
  
$
66,290
    
$
48,121
  


(1)
Includes the following items for the three months ended March 31, 2019 and 2018: (i) $39,533 and $29,587 of depreciation and amortization expense, (ii) $2,462 and $1,992 of lease intangible amortization and (iii) $5,872 and $5,235 of amortization for lease incentives, respectively.

(2)
Includes the following items for the three months ended March 31, 2019 and 2018: (i) net (loss) income of $(420) and $48, (ii) interest expense of $36 and $112 and (iii) depreciation and amortization expense of $266 and $15, respectively.

(3)
Includes the following items for the three months ended March 31, 2019 and 2018: (i) equity based compensation of $25 and $37, (ii) provision for income taxes of $36 and $4, (iii) interest expense of $899 and $1,292, (iv) depreciation and amortization expense of $1,164 and $2,076 and (v) changes in fair value of non-hedge derivative instruments of $179 and $(244), respectively.

We use Funds Available for Distribution (“FAD”) in evaluating our ability to meet our 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 excludes changes in working capital.

7
The following table sets forth a reconciliation of Net Cash provided by Operating Activities to FAD for the three months ended March 31, 2019 and 2018:

   
Three Months Ended March 31,
  
(in thousands)
  
2019
    
2018
  
Net Cash Provided by Operating Activities
  
$
20,270
    
$
11,470
  
Add: Principal Collections on Finance Leases
    
1,289
      
129
  
Add: Proceeds from Sale of Assets
    
27,299
      
6,174
  
Add: Return of Capital Distributions from Unconsolidated Entities
    
398
      
—
  
Less: Required Payments on Debt Obligations (1)
    
(1,562
)
    
(1,562
)
Less: Capital Distributions to Non-Controlling Interest
    
—
      
—
  
Exclude: Changes in Working Capital
    
22,489
      
18,226
  
Funds Available for Distribution (FAD)
  
$
70,183
    
$
34,437
  


(1)
Required payments on debt obligations for the three months ended March 31, 2019 exclude repayments of $40,000 for the Revolving Credit Facility and $5,660 for the CMQR Credit Agreement, and for the three months ended March 31, 2018 exclude repayment of $11,050 for the CMQR Credit Agreement, all of which were voluntary refinancings as repayments of these amounts were not required at such time.

The following tables set forth a reconciliation of FAD to Net Cash provided by Operating Activities for the three months ended March 31, 2019:

   
Three Months Ended March 31, 2019
  
(in thousands)
  
Aviation
Leasing
    
Infrastructure
    
Corporate and
Other
    
Total
  
Funds Available for Distribution (FAD)
  
$
101,141
    
$
(4,185
)
  
$
(26,773
)
  
$
70,183
  
Less: Principal Collections on Finance Leases
                            
(1,289
)
Less: Proceeds from Sale of Assets
                            
(27,299
)
Less: Return of Capital Distributions from Unconsolidated Entities
                            
(398
)
Add: Required Payments on Debt Obligations (1)
                            
1,562
  
Add: Capital Distributions to Non-Controlling Interest
                            
—
  
Include: Changes in Working Capital
                            
(22,489
)
Net Cash provided by Operating Activities
                          
$
20,270
  

(1)
Required payments on debt obligations for the three months ended March 31, 2019 exclude repayments of $40,000 for the Revolving Credit Facility and $5,660 for the CMQR Credit Agreement, both of which were voluntary refinancings as repayments of these amounts were not required at such time.

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.

8

 •
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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