View:
Download DOC
Download PDF
Download XLS
Download XBRL
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): April 25, 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 April 25, 2024, FTAI Aviation Ltd. (“FTAI” or the “Company”) issued a press release announcing the Company’s results for its fiscal quarter ended March 31, 2024. 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 April 25, 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: April 25, 2024
    
 
Exhibit 99.1

 
PRESS RELEASE
 
FTAI Aviation Ltd. Reports First Quarter 2024 Results, Declares Dividend of $0.30 per Ordinary Share
 

NEW YORK, April 25, 2024 (GLOBE NEWSWIRE) – FTAI Aviation Ltd. (NASDAQ: FTAI) (the “Company” or “FTAI”) today reported financial results for the first quarter 2024. 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
    
Q1’24
  
Net Income Attributable to Shareholders
  
$
31,287
  
Basic Earnings per Ordinary Share
  
$
0.31
  
Diluted Earnings per Ordinary Share
  
$
0.31
  
Adjusted EBITDA(1)
  
$
164,101
  
 

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

First Quarter 2024 Dividends
 
On April 25, 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 March 31, 2024, payable on May 21, 2024 to the holders of record on May 10, 2024.
 
Additionally, on April 25, 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 March 31, 2024, payable on June 14, 2024 to the holders of record on June 3, 2024.
 
Business Highlights
 

 •
FTAI Aviation Ltd. and LATAM Airlines Group S.A. enter into a Perpetual Power Program covering over 60 engines.
 

 •
Aerospace Products Adj. EBITDA reached $70 million, a 28.7% quarterly growth versus Q4 2023 and 156.7% growth vs Q1 2023. (1)
 
 
(1)
For definitions and reconciliations of non-GAAP measures, please refer to the exhibit to this press release.

1
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 Friday, April 26, 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/BId3fa86dd156541f2888a619e6966f685/. 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, April 26, 2024 through 11:30 A.M. on Friday, May 3, 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 March 31,
  
   
2024
    
2023
  
Revenues
            
Lease income
  
$
53,161
    
$
55,978
  
Maintenance revenue
    
45,790
      
35,141
  
Asset sales revenue
    
38,607
      
108,691
  
Aerospace products revenue
    
189,057
      
85,113
  
Other revenue
    
79
      
7,795
  
Total revenues
    
326,694
      
292,718
  
                 
Expenses
                
Cost of sales
    
142,804
      
145,670
  
Operating expenses
    
25,317
      
22,534
  
General and administrative
    
3,683
      
4,067
  
Acquisition and transaction expenses
    
6,179
      
3,262
  
Management fees and incentive allocation to affiliate
    
4,895
      
2,997
  
Depreciation and amortization
    
49,920
      
40,926
  
Asset impairment
    
962
      
1,220
  
Interest expense
    
47,707
      
39,292
  
Total expenses
    
281,467
      
259,968
  
                 
Other (expense) income
                
Equity in losses of unconsolidated entities
    
(667
)
    
(1,335
)
Other income
    
634
      
8
  
Total other expense
    
(33
)
    
(1,327
)
Income before income taxes
    
45,194
      
31,423
  
Provision for income taxes
    
5,572
      
2,026
  
Net income
    
39,622
      
29,397
  
Less: Dividends on preferred shares
    
8,335
      
6,791
  
Net income attributable to shareholders
  
$
31,287
    
$
22,606
  
                 
Earnings per share:
                
Basic
  
$
0.31
    
$
0.23
  
Diluted
  
$
0.31
    
$
0.22
  
                 
Weighted average shares outstanding:
                
Basic
    
100,245,905
      
99,728,245
  
Diluted
    
100,960,065
      
100,974,100
  

3
FTAI AVIATION LTD.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share and per share data)
   
(Unaudited)
        
   
March 31, 2024
    
December 31, 2023
  
Assets
            
Cash and cash equivalents
  
$
65,224
    
$
90,756
  
Restricted cash
    
150
      
150
  
Accounts receivable, net
    
137,399
      
115,156
  
Leasing equipment, net
    
2,187,716
      
2,032,413
  
Property, plant, and equipment, net
    
44,114
      
45,175
  
Investments
    
22,055
      
22,722
  
Intangible assets, net
    
46,583
      
50,590
  
Goodwill
    
4,630
      
4,630
  
Inventory, net
    
345,470
      
316,637
  
Other assets
    
322,565
      
286,456
  
Total assets
  
$
3,175,906
    
$
2,964,685
  
                 
Liabilities
                
Accounts payable and accrued liabilities
  
$
139,250
    
$
112,907
  
Debt, net
    
2,693,754
      
2,517,343
  
Maintenance deposits
    
62,722
      
65,387
  
Security deposits
    
42,431
      
41,065
  
Other liabilities
    
60,143
      
52,100
  
Total liabilities
  
$
2,998,300
    
$
2,788,802
  
                 
Commitments and contingencies
                
                 
Equity
                
Ordinary shares ($0.01 par value per share; 2,000,000,000 shares authorized; 100,245,905 and 100,245,905 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)
  
$
1,002
    
$
1,002
  
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 15,920,000 and 15,920,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)
    
159
      
159
  
Additional paid in capital
    
218,074
      
255,973
  
Accumulated deficit
    
(42,163
)
    
(81,785
)
Shareholders' equity
    
177,072
      
175,349
  
Non-controlling interest in equity of consolidated subsidiaries
    
534
      
534
  
Total equity
    
177,606
      
175,883
  
Total liabilities and equity
  
$
3,175,906
    
$
2,964,685
  
 
4
FTAI AVIATION LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)

   
Three Months Ended March 31,
  
   
2024
    
2023
  
Cash flows from operating activities:
            
Net income
  
$
39,622
    
$
29,397
  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
                
Equity in losses of unconsolidated entities
    
667
      
1,335
  
Gain on sale of leasing equipment, net
    
(58,061
)
    
(31,657
)
Security deposits and maintenance claims included in earnings
    
(2,437
)
    
(9,842
)
Equity-based compensation
    
510
      
108
  
Depreciation and amortization
    
49,920
      
40,926
  
Asset impairment
    
962
      
1,220
  
Change in deferred income taxes
    
4,548
      
1,692
  
Change in fair value of guarantees
    
(259
)
    
(1,769
)
Amortization of lease intangibles and incentives
    
9,202
      
7,844
  
Amortization of deferred financing costs
    
2,638
      
2,017
  
Provision for credit losses
    
—
      
475
  
Other
    
(259
)
    
(326
)
Change in:
                
Accounts receivable
    
(27,945
)
    
(14,840
)
Inventory
    
(6,877
)
    
6,984
  
Other assets
    
(1,845
)
    
(2,013
)
Accounts payable and accrued liabilities
    
(10,252
)
    
6,088
  
Management fees payable to affiliate
    
238
      
(386
)
Other liabilities
    
(717
)
    
1,444
  
Net cash (used in) provided by operating activities
    
(345
)
    
38,697
  
                 
Cash flows from investing activities:
                
Investment in unconsolidated entities
    
—
      
(19,500
)
Principal collections on finance leases
    
786
      
—
  
Principal collections on notes receivable
    
1,964
      
—
  
Acquisition of leasing equipment
    
(276,990
)
    
(127,513
)
Acquisition of property, plant and equipment
    
(1,312
)
    
(1,451
)
Acquisition of lease intangibles
    
862
      
(8,640
)
Purchase deposits for acquisitions
    
(25,535
)
    
(9,940
)
Proceeds from sale of leasing equipment
    
128,384
      
153,679
  
Proceeds for deposit on sale of aircraft and engine
    
2,098
      
1,042
  
Return of purchase deposits
    
530
      
—
  
Net cash used in investing activities
  
$
(169,213
)
  
$
(12,323
)
                 

5
   
Three Months Ended March 31,
  
   
2024
    
2023
  
Cash flows from financing activities:
            
Proceeds from debt
  
$
210,000
    
$
145,000
  
Repayment of debt
    
(35,000
)
    
(220,000
)
Payment of deferred financing costs
    
(292
)
    
—
  
Receipt of security deposits
    
1,856
      
1,459
  
Return of security deposits
    
—
      
(65
)
Receipt of maintenance deposits
    
8,927
      
10,142
  
Release of maintenance deposits
    
(3,056
)
    
—
  
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs
    
—
      
61,729
  
Cash dividends - ordinary shares
    
(30,074
)
    
(29,919
)
Cash dividends - preferred shares
    
(8,335
)
    
(6,791
)
Net cash provided by (used in) financing activities
  
$
144,026
    
$
(38,445
)

               
Net decrease in cash and cash equivalents and restricted cash
    
(25,532
)
    
(12,071
)
Cash and cash equivalents and restricted cash, beginning of period
    
90,906
      
53,065
  
Cash and cash equivalents and restricted cash, end of period
  
$
65,374
    
$
40,994
  

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 attributable to shareholders to Adjusted EBITDA for the three months ended March 31, 2024 and 2023:
 
   
Three Months Ended
March 31,
    
 
(in thousands)
  
2024
    
2023
    
Change
  
Net income attributable to shareholders
  
$
31,287
    
$
22,606
    
$
8,681
  
Add: Provision for income taxes
    
5,572
      
2,026
      
3,546
  
Add: Equity-based compensation expense
    
510
      
108
      
402
  
Add: Acquisition and transaction expenses
    
6,179
      
3,262
      
2,917
  
Add: Losses on the modification or extinguishment of debt and capital lease obligations
    
—
      
—
      
—
  
Add: Changes in fair value of non-hedge derivative instruments
    
—
      
—
      
—
  
Add: Asset impairment charges
    
962
      
1,220
      
(258
)
Add: Incentive allocations
    
4,308
      
2,942
      
1,366
  
Add: Depreciation and amortization expense (1)
    
59,122
      
48,770
      
10,352
  
Add: Interest expense and dividends on preferred shares
    
56,042
      
46,083
      
9,959
  
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)
    
(548
)
    
(696
)
    
148
  
Less: Equity in losses of unconsolidated entities
    
667
      
1,335
      
(668
)
Less: Non-controlling share of Adjusted EBITDA
    
—
      
—
      
—
  
Adjusted EBITDA (non-GAAP)
  
$
164,101
    
$
127,656
    
$
36,445
  

 
(1)
Includes the following items for the three months ended March 31, 2024 and 2023: (i) depreciation and amortization expense of $49,920 and $40,926, (ii) lease intangible amortization of $3,976 and $3,983 and (iii) amortization for lease incentives of $5,226 and $3,861, respectively.
 
(2)
Includes the following items for the three months ended March 31, 2024 and 2023: (i) net loss of $667 and $1,335, (ii) depreciation and amortization expense of $119 and $400, and (iii) acquisition and transaction expenses of $0 and $239, respectively.
 
For a reconciliation of net income attributable to shareholders to Adjusted EBITDA for the three months ended December 31, 2023, refer to the appendix of the FTAI Aviation Ltd. Earnings Supplement for the period Q4’23.
 

 7