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Press Release Details

FTAI Aviation Ltd. Reports Third Quarter 2023 Results, Declares Dividend of $0.30 per Ordinary Share

Oct 25, 2023

NEW YORK, Oct. 25, 2023 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the third quarter 2023. The Company’s consolidated comparative financial statements and key performance measures are attached as an exhibit to this press release.

Financial Overview

(in thousands, except per share data)
Selected Financial Results Q3’23
Net Income Attributable to Shareholders $ 32,973
Basic Earnings per Ordinary Share from Continuing Operations $ 0.33
Diluted Earnings per Ordinary Share from Continuing Operations $ 0.33
Adjusted EBITDA(1) $ 154,218

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

Third Quarter 2023 Dividends

On October 25, 2023, the Company’s Board of Directors (the “Board”) declared a cash dividend on FTAI’s ordinary shares of $0.30 per share for the quarter ended September 30, 2023, payable on November 28, 2023 to the holders of record on November 14, 2023.

Additionally, on October 25, 2023, the Board declared cash dividends on FTAI’s Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”), Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”), Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”) and Fixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares (“Series D Preferred Shares”) of $0.51563, $0.50000, $0.51563 and $0.59375 per share, respectively, for the quarter ended September 30, 2023, payable on December 15, 2023 to the holders of record on December 1, 2023.

Business Highlights

  • $107.1 million Aerospace Products revenue in Q3 2023 generating $40.6 million of Adjusted EBITDA(1) at a 38% margin.
  • 41 modules sold in Q3’23 to 11 unique customers including 2 new customers and 9 repeat customers.
  • Generated $492 million year to date positive free cashflow available for asset acquisition & investment activity.
  • Closed on 23 Engines & 10 Aircraft at attractive prices to help generate future growth in Aviation Leasing Adjusted EBITDA(1).

    (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 Quarterly Report on Form 10-Q, when available on the Company’s website. Nothing on the Company’s website is included or incorporated by reference herein.

Conference Call

In addition, management will host a conference call on Thursday, October 26, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BIc75f7efaa03d41108edf9a7cf4d4ec2f. Once registered, participants will receive a dial-in and unique pin to access the call.

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

A replay of the conference call will be available after 11:30 A.M. on Thursday, October 26, 2023 through 11:30 A.M. on Thursday, November 2, 2023 on https://ir.ftaiaviation.com/news-events/presentations.

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

About FTAI Aviation Ltd.

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

Cautionary Note Regarding Forward-Looking Statements

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

For further information, please contact:

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


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

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2023     2022       2023       2022  
Revenues              
Lease income $ 45,622   $ 50,198     $ 161,141     $ 129,163  
Maintenance revenue   63,925     35,507       141,131       112,171  
Asset sales revenue   72,990     85,488       283,167       85,488  
Aerospace products revenue   107,085     53,401       260,273       94,211  
Other revenue   1,474     5,771       12,447       13,087  
Total revenues   291,096     230,365       858,159       434,120  
Expenses              
Cost of sales   116,707     95,948       366,909       120,139  
Operating expenses   33,887     27,393       81,218       108,197  
General and administrative   3,015     3,354       10,270       11,821  
Acquisition and transaction expenses   4,261     2,848       10,195       8,340  
Management fees and incentive allocation to affiliate   4,577     4       13,137       4  
Depreciation and amortization   43,959     34,853       123,399       115,461  
Asset impairment       4,495       1,220       128,171  
Interest expense   40,185     40,171       117,976       132,197  
Total expenses   246,591     209,066       724,324       624,330  
Other income (expense)              
Equity in earnings (losses) of unconsolidated entities   46     (358 )     (1,669 )     (125 )
Gain on sale of assets, net                   79,933  
Loss on extinguishment of debt       (19,861 )           (19,861 )
Other income (expense)   461     (1,038 )     877       208  
Total other income (expense)   507     (21,257 )     (792 )     60,155  
Income (loss) from continuing operations before income taxes   45,012     42       133,043       (130,055 )
Provision for income taxes   3,705     4,189       7,586       7,357  
Net income (loss) from continuing operations   41,307     (4,147 )     125,457       (137,412 )
Net loss from discontinued operations, net of income taxes       (14,782 )           (101,416 )
Net income (loss)   41,307     (18,929 )     125,457       (238,828 )
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries:              
Continuing operations                    
Discontinued operations       (2,871 )           (18,817 )
Less: Dividends on preferred shares   8,334     6,791       23,460       20,373  
Net income (loss) attributable to shareholders $ 32,973   $ (22,849 )   $ 101,997     $ (240,384 )
               


  Three Months Ended
September 30,
    Nine Months Ended
September 30,

  2023     2022     2023   2022  
Earnings (loss) per share:              
Basic              
Continuing operations $ 0.33   $ (0.11 )   $ 1.02   $ (1.59 )
Discontinued operations $   $ (0.12 )   $   $ (0.83 )
Diluted              
Continuing operations $ 0.33   $ (0.11 )   $ 1.02   $ (1.59 )
Discontinued operations $   $ (0.12 )   $   $ (0.83 )
Weighted average shares outstanding:              
Basic   99,927,594     99,378,771       99,796,736     99,372,016  
Diluted   100,482,309     99,378,771       100,269,203     99,372,016  


  FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)
   
  (Unaudited)      
  September 30, 2023   December 31, 2022  
Assets        
Cash and cash equivalents $ 52,879     $ 33,565    
Restricted cash         19,500    
Accounts receivable, net   107,825       99,443    
Leasing equipment, net   1,924,198       1,913,553    
Property, plant, and equipment, net   13,454       10,014    
Investments   39,868       22,037    
Intangible assets, net   41,471       41,955    
Inventory, net   274,832       163,676    
Other assets   179,259       125,834    
Total assets $ 2,633,786     $ 2,429,577    
         
Liabilities        
Accounts payable and accrued liabilities $ 108,579     $ 86,452    
Debt, net   2,279,330       2,175,727    
Maintenance deposits   61,497       78,686    
Security deposits   39,901       32,842    
Other liabilities   49,417       36,468    
Total liabilities $ 2,538,724     $ 2,410,175    
         
Commitments and contingencies        
         
Equity        
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 100,238,075 and 99,716,621 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) $ 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 September 30, 2023 and December 31, 2022, respectively)   159       133    
Additional paid in capital   293,512       343,350    
Accumulated deficit   (200,145 )     (325,602 )  
Shareholders' equity   94,528       18,878    
Non-controlling interest in equity of consolidated subsidiaries   534       524    
Total equity   95,062       19,402    
Total liabilities and equity $ 2,633,786     $ 2,429,577    


FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)
  Nine Months Ended September 30,
    2023       2022  
Cash flows from operating activities:      
Net income (loss) $ 125,457     $ (238,828 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:      
Equity in losses of unconsolidated entities   1,669       46,727  
Gain on sale of assets, net   (110,511 )     (106,427 )
Security deposits and maintenance claims included in earnings   (34,458 )     (31,558 )
Loss on extinguishment of debt         19,861  
Equity-based compensation   1,128       2,623  
Depreciation and amortization   123,399       155,780  
Asset impairment   1,220       128,171  
Change in deferred income taxes   5,974       14,923  
Change in fair value of non-hedge derivative         (1,567 )
Change in fair value of guarantees   (1,677 )      
Amortization of lease intangibles and incentives   33,685       30,315  
Amortization of deferred financing costs   6,429       17,142  
Provision for credit losses   6,583       47,226  
Other   (995 )     (693 )
Change in:      
Accounts receivable   (34,358 )     (61,892 )
Inventory   (4,845 )     (13,370 )
Other assets   (3,727 )     (23,576 )
Accounts payable and accrued liabilities   321       4,329  
Management fees payable to affiliate   824       (2,530 )
Other liabilities   648       (7,955 )
Net cash provided by (used in) operating activities   116,766       (21,299 )
       
Cash flows from investing activities:      
Investment in unconsolidated entities   (19,500 )     (7,344 )
Principal collections on notes receivable   2,438        
Principal collections on finance leases   3,624       2,165  
Acquisition of business, net of cash acquired         (3,819 )
Acquisition of leasing equipment   (506,923 )     (360,642 )
Acquisition of property, plant and equipment   (3,906 )     (138,750 )
Acquisition of lease intangibles   (10,474 )     (6,542 )
Investment in promissory notes   (11,500 )      
Purchase deposits for acquisitions   (10,533 )     (28,621 )
Proceeds from sale of leasing equipment   366,065       262,096  
Proceeds from sale of property, plant and equipment         5,289  
(Refunds) proceeds for deposit on sale of aircraft and engine   (683 )     7,801  
Return of purchase deposits   300        
Net cash used in investing activities $ (191,092 )   $ (268,367 )
       
Cash flows from financing activities:      
Proceeds from debt $ 430,000     $ 503,980  
Repayment of debt   (330,000 )     (984,529 )
Payment of deferred financing costs   (1,805 )     (18,151 )
Receipt of security deposits   7,355       2,636  
Return of security deposits   (2,385 )     (941 )
Receipt of maintenance deposits   22,747       37,586  
Release of maintenance deposits   (275 )     (878 )
Capital contributions from non-controlling interests   10       1,187  
Settlement of equity-based compensation         (148 )
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs   61,729        
Dividend from spin-off of FTAI Infrastructure, net of cash transferred         500,562  
Cash dividends - ordinary shares   (89,776 )     (98,584 )
Cash dividends - preferred shares   (23,460 )     (20,373 )
Net cash provided by (used in) financing activities $ 74,140     $ (77,653 )
       
Net decrease in cash and cash equivalents and restricted cash   (186 )     (367,319 )
Cash and cash equivalents and restricted cash, beginning of period   53,065       440,061  
Cash and cash equivalents and restricted cash, end of period $ 52,879     $ 72,742  


Key Performance Measures

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

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

The following table sets forth a reconciliation of net income (loss) attributable to shareholders from continuing operations to Adjusted EBITDA for the three and nine months ended September 30, 2023 and 2022:

  Three Months Ended
September 30,
  Change
  Nine Months Ended
September 30,
  Change
(in thousands)   2023       2022         2023     2022    
Net income (loss) attributable to shareholders from continuing operations $ 32,973     $ (10,938 )   $ 43,911     $ 101,997   $ (157,785 )   $ 259,782  
Add: Provision for income taxes   3,705       4,189       (484 )     7,586     7,357       229  
Add: Equity-based compensation expense   510             510       1,128           1,128  
Add: Acquisition and transaction expenses   4,261       2,848       1,413       10,195     8,340       1,855  
Add: Losses on the modification or extinguishment of debt and capital lease obligations         19,861       (19,861 )         19,861       (19,861 )
Add: Changes in fair value of non-hedge derivative instruments                                
Add: Asset impairment charges         4,495       (4,495 )     1,220     128,171       (126,951 )
Add: Incentive allocations   4,274             4,274       12,540           12,540  
Add: Depreciation and amortization expense(1)   59,380       41,329       18,051       157,084     145,754       11,330  
Add: Interest expense and dividends on preferred shares   48,519       46,962       1,557       141,436     152,570       (11,134 )
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities(2)   642       (241 )     883       96     165       (69 )
Less: Equity in (earnings) losses of unconsolidated entities   (46 )     358       (404 )     1,669     125       1,544  
Less: Non-controlling share of Adjusted EBITDA                                
Adjusted EBITDA (non-GAAP) $ 154,218     $ 108,863     $ 45,355     $ 434,951   $ 304,558     $ 130,393  

___________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022: (i) depreciation and amortization expense of $43,959 and $34,853, (ii) lease intangible amortization of $3,726 and $3,291 and (iii) amortization for lease incentives of $11,695 and $3,185, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) depreciation and amortization expense of $123,399 and $115,461, (ii) lease intangible amortization of $11,325 and $10,259 and (iii) amortization for lease incentives of $22,360 and $20,034, respectively.

(2) Includes the following items for the three months ended September 30, 2023 and 2022: (i) net income (loss) of $46 and $(358), (ii) depreciation and amortization expense of $367 and $117 and (iii) acquisition and transaction expense of $229 and $0, respectively. Includes the following items for the nine months ended September 30, 2023 and 2022: (i) net loss of $1,669 and $125, (ii) depreciation and amortization expense of $1,202 and $290 and (iii) acquisition and transaction expense of $563 and $0, respectively.


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Source: FTAI Aviation Ltd.