Fortress Transportation and Infrastructure Investors LLC Reports Third Quarter 2022 Results, Declares Dividend of $0.30 per Common Share


NEW YORK, Oct. 27, 2022 (GLOBE NEWSWIRE) -- Fortress Transportation and Infrastructure Investors LLC (NASDAQ:FTAI) (the “Company” or “FTAI”) today reported financial results for the third quarter 2022. 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 ResultsQ3’22
Net Loss Attributable to Shareholders$       22,849
Basic Loss per Common Share$     0.23
Diluted Loss per Common Share$0.23
Adjusted EBITDA(1)$108,863

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

Third Quarter 2022 Dividends

On October 27, 2022, the Company’s Board of Directors (the “Board”) declared a cash dividend on its common shares of $0.30 per share for the quarter ended September 30, 2022, payable on November 28, 2022 to the holders of record on November 14, 2022.

Additionally, on October 27, 2022, 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”) and Fixed Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares (“Series C Preferred Shares”) of $0.51563, $0.50000 and $0.51563 per share, respectively, for the quarter ended September 30, 2022, payable on December 15, 2022 to the holders of record on December 1, 2022.

Business Highlights

  • Delays in new aircraft deliveries are creating scarcity of 737 NGs and A320ceos which are expected to drive strong long-term demand for 737 NGs, A320ceos and CFM56 engines.
  • We have begun closing the sale of $200mm in assets in Q4 and have signed LOIs to purchase $300mm in new assets also in Q4.
  • Gains from asset sales were $21mm within our quarterly range target range of $20-30mm.
  • Aerospace products had another solid quarter with $19mm in EBITDA up from $17.0 million in Q2.
  • Industry demand has returned to almost pre-Covid level.

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, October 28, 2022 at 8:00 A.M. Eastern Time. The conference call may be accessed by registering via the following link https://register.vevent.com/register/BI88dfc2c47565449f93a5cfe98d8b94f7. Once registered, participants will receive a dial-in and unique pin to access the call.

A replay of the conference call will be available after 11:30 A.M. on Friday, October 28, 2022 through 11:30 A.M. on Friday, November 4, 2022 on https://ir.ftandi.com/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 Fortress Transportation and Infrastructure Investors LLC

FTAI primarily invests across the aviation sector and targets high quality aviation equipment and 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. 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.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
(646) 734-9414
aandreini@fortress.com

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 common dividend and the Series A Preferred, Series B Preferred and Series C Preferred dividends declared in October 2022 will be treated as a partnership distribution and guaranteed payments, respectively. For U.S. tax withholding purposes, the per share distribution components are as follows:

Common Distribution Components 
Non-U.S. Long Term Capital Gain$
U.S. Portfolio Interest Income(1)$0.00964
U.S. Dividend Income(2)$
Income Not from U.S. Sources(3)$0.29036
U.S. Long Term Capital Gain (4)                  $
Distribution Per Share
$0.30000


Series A Preferred Distribution Components 
Guaranteed Payments(5)$0.51563
Distribution Per Share
$0.51563


Series B Preferred Distribution Components 
Guaranteed Payments(5)$0.50000
Distribution Per Share
$0.50000


Series C Preferred Distribution Components 
Guaranteed Payments(5)$0.51563
Distribution Per Share
$0.51563

(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 or §1442 of the Code.

(3) This income is not subject to withholding under §1441, §1442 or §1446 of the Code.

(4) U.S. Long Term Capital Gain attributable to the sale of a U.S. Real Property Holding Corporation. As a result, the gain will be treated as income that is effectively connected with a U.S. trade or business and be subject to withholding.                

(5) Brokers and nominees should treat this income as subject to withholding under §1441 or §1442 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.

Exhibit - Financial Statements

FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
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,
  2022   2021   2022   2021 
        
Revenues$230,365  $99,174  $434,120  $237,352 
        
Expenses       
Operating expenses 27,393   15,339   108,197   34,191 
Cost of sales 95,948   5,367   120,139   8,577 
General and administrative 3,354   3,679   11,821   9,618 
Acquisition and transaction expenses 2,848   6,583   8,340   12,626 
Management fees and incentive allocation to affiliate 4   16   4   704 
Depreciation and amortization 34,853   36,237   115,461   106,374 
Asset impairment 4,495   859   128,171   3,048 
Interest expense 40,171   50,096   132,197   115,598 
Total expenses 209,066   118,176   624,330   290,736 
Other (expense) income       
Equity in losses of unconsolidated entities (358)  (369)  (125)  (1,050)
Gain on sale of assets, net    12,685   79,933   17,467 
Loss on extinguishment of debt (19,861)     (19,861)  (3,254)
Other (expense) income (1,038)  (1,341)  208   (717)
Total other (expense) income (21,257)  10,975   60,155   12,446 
Income (loss) from continuing operations before income taxes 42   (8,027)  (130,055)  (40,938)
Provision for income taxes 4,189   485   7,357   824 
Net loss from continuing operations (4,147)  (8,512)  (137,412)  (41,762)
Net loss from discontinued operations, net of income taxes (14,782)  (30,931)  (101,416)  (69,165)
Net loss (18,929)  (39,443)  (238,828)  (110,927)
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries:       
Continuing operations           
Discontinued operations (2,871)  (7,363)  (18,817)  (18,949)
Less: Dividends on preferred shares 6,791   6,791   20,373   17,967 
Net loss attributable to shareholders$(22,849) $(38,871) $(240,384) $(109,945)
        
Loss per share:       
Basic       
Continuing operations$(0.11) $(0.17) $(1.59) $(0.69)
Discontinued operations$(0.12) $(0.27) $(0.83) $(0.58)
Diluted       
Continuing operations$(0.11) $(0.17) $(1.59) $(0.69)
Discontinued operations$(0.12) $(0.27) $(0.83) $(0.58)
Weighted average shares outstanding:       
Basic 99,378,771   88,277,897   99,372,016   86,787,072 
Diluted 99,378,771   88,277,897   99,372,016   86,787,072 


FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollar amounts in thousands, except share and per share data)

 September 30, 2022 December 31, 2021
Assets   
Cash and cash equivalents$72,742  $138,206 
Accounts receivable, net 94,867   124,924 
Leasing equipment, net 1,692,182   1,855,637 
Property, plant, and equipment, net 47,669   38,263 
Investments 22,280   22,917 
Intangible assets, net 29,416   30,962 
Inventory, net 160,019   100,307 
Other assets 158,810   110,337 
Assets of discontinued operations    2,442,301 
Total assets$2,277,985  $4,863,854 
    
Liabilities   
Accounts payable and accrued liabilities$102,506  $87,035 
Debt, net 2,024,549   2,501,587 
Maintenance deposits 51,430   106,836 
Security deposits 27,409   40,149 
Other liabilities 46,043   23,892 
Liabilities of discontinued operations    980,255 
Total liabilities$2,251,937  $3,739,754 
    
Commitments and contingencies   
    
Equity   
Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 99,378,771 and 99,180,385 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)$992  $992 
Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 13,320,000 and 13,320,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively) 133   133 
Additional paid in capital 376,802   1,411,940 
Accumulated deficit (352,403)  (132,392)
Accumulated other comprehensive loss    (156,381)
Shareholders' equity 25,524   1,124,292 
Non-controlling interest in equity of consolidated subsidiaries 524   (192)
Total equity 26,048   1,124,100 
Total liabilities and equity$2,277,985  $4,863,854 


FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollar amounts in thousands, unless otherwise noted)

 Nine Months Ended September 30,
  2022   2021 
Cash flows from operating activities:   
Net loss$(238,828) $(110,927)
Adjustments to reconcile net loss to net cash used in operating activities:   
Equity in losses of unconsolidated entities 46,727   9,860 
Gain on sale of assets, net (106,427)  (17,483)
Security deposits and maintenance claims included in earnings (31,558)  (30,866)
Loss on extinguishment of debt 19,861   3,254 
Equity-based compensation 2,623   3,281 
Depreciation and amortization 155,780   145,274 
Asset impairment 128,171   3,048 
Change in deferred income taxes 14,923   (2,311)
Change in fair value of non-hedge derivative (1,567)  (1,979)
Amortization of lease intangibles and incentives 30,315   21,348 
Amortization of deferred financing costs 17,142   18,853 
Provision for credit losses 47,226   817 
Other (693)  (240)
Change in:   
Accounts receivable (61,892)  (100,821)
Other assets (23,576)  (34,499)
Inventory (13,370)   
Accounts payable and accrued liabilities 4,329   71,285 
Management fees payable to affiliate (2,530)  (844)
Other liabilities (7,955)  2,242 
Net cash used in operating activities (21,299)  (20,708)
    
Cash flows from investing activities:   
Investment in unconsolidated entities (7,344)  (54,499)
Principal collections on finance leases 2,165   1,707 
Acquisition of business, net of cash acquired (3,819)  (627,399)
Acquisition of leasing equipment (360,642)  (299,564)
Acquisition of property, plant and equipment (138,750)  (109,405)
Acquisition of lease intangibles (6,542)  (7,403)
Purchase deposits for acquisitions (28,621)  (13,790)
Proceeds from sale of leasing equipment 262,096   78,463 
Proceeds from sale of property, plant and equipment 5,289    
Proceeds for deposit on sale of aircraft and engine 7,801   600 
Return of purchase deposits    1,010 
Net cash used in investing activities$(268,367) $(1,030,280)
    
Cash flows from financing activities:   
Proceeds from debt$503,980  $2,553,600 
Repayment of debt (984,529)  (1,452,704)
Payment of deferred financing costs (18,151)  (45,123)
Receipt of security deposits 2,636   1,390 
Return of security deposits (941)  (1,034)
Capital contributions from non-controlling interests 1,187    
Receipt of maintenance deposits 37,586   23,075 
Release of maintenance deposits (878)  (19,615)
Proceeds from issuance of common shares, net of underwriter's discount    291,822 
Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs    101,201 
Dividend from spin-off of FTAI Infrastructure, net of cash transferred 500,562    
Settlement of equity-based compensation (148)  (421)
Cash dividends - common shares (98,584)  (85,204)
Cash dividends - preferred shares (20,373)  (17,967)
Net cash (used in) provided by financing activities$(77,653) $1,349,020 
    
Net (decrease) increase in cash and cash equivalents and restricted cash (367,319)  298,032 
Cash and cash equivalents and restricted cash, beginning of period 440,061   161,418 
Cash and cash equivalents and restricted cash, end of period$72,742  $459,450 

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 loss attributable to shareholders to Adjusted EBITDA for the three and nine months ended September 30, 2022 and 2021:

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
(in thousands) 2022   2021   2022   2021 
Net loss attributable to shareholders from continuing operations$        (10,938) $        (15,303) $        (157,785) $        (59,729)
Add: Provision for income taxes 4,189   485   7,357   824 
Add: Equity-based compensation expense           
Add: Acquisition and transaction expenses 2,848   6,583   8,340   12,626 
Add: Losses on the modification or extinguishment of debt and capital lease obligations 19,861      19,861   3,254 
Add: Changes in fair value of non-hedge derivative instruments           
Add: Asset impairment charges 4,495   859   128,171   3,048 
Add: Incentive allocations           
Add: Depreciation and amortization expense (1) 41,329   42,681   145,754   127,723 
Add: Interest expense and dividends on preferred shares 46,962   56,887   152,570   133,565 
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) (241)  (312)  165   (906)
Less: Equity in losses of unconsolidated entities 358   369   125   1,050 
Less: Non-controlling share of Adjusted EBITDA           
Adjusted EBITDA (non-GAAP)$         108,863  $        92,249  $        304,558  $        221,455 

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(1) Includes the following items for the three months ended September 30, 2022 and 2021: (i) depreciation and amortization expense of $34,853 and $36,237, (ii) lease intangible amortization of $3,291 and $1,266 and (iii) amortization for lease incentives of $3,185 and $5,178, respectively. Includes the following items for the nine months ended September 30, 2022 and 2021: (i) depreciation and amortization expense of $115,461 and $106,374, (ii) lease intangible amortization of $10,259 and $3,216 and (iii) amortization for lease incentives of $20,034 and $18,133, respectively.

(2) Includes the following items for the three months ended September 30, 2022 and 2021: (i) net loss of $358 and $369 and (ii) depreciation and amortization expense of $117 and $57, respectively. Includes the following items for the nine months ended September 30, 2022 and 2021: (i) net loss of $125 and $1,050 and (ii) depreciation and amortization expense of $290 and $144, respectively.