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

    ソース: Nasdaq GlobeNewswire / 01 8 2019 21:16:13   Europe/London

    NEW YORK, Aug. 01, 2019 (GLOBE NEWSWIRE) -- Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company”) today reported financial results for the three months ended June 30, 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 Q2’19 
     Net Cash Provided by Operating Activities$37,842 
     Net Income Attributable to Shareholders$20,332 
     Basic and Diluted Earnings per Share$0.24 
       
     Funds Available for Distribution (“FAD”) (1)$86,894 
     Adjusted EBITDA(1)$94,130 

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

    For the second quarter of 2019, our total FAD was $86.9 million. This amount includes $126.8 million from aviation leasing

    activities, offset by $(10.0) million and $(29.9) million from infrastructure and corporate and other activities, respectively.

    Second Quarter 2019 Dividend

    On August 1, 2019, the Company’s Board of Directors declared a cash dividend on its common shares of $0.33 per share for the quarter ended June 30, 2019, payable on August 27, 2019 to the holders of record on August 16, 2019.

    “We just completed our most profitable quarter ever both in terms of net income and adjusted EBITDA. Aviation continues to exceed our expectations and we are executing long-term contracts at all four of our infrastructure companies at a pace we have never experienced before,” said Joe Adams, the Company’s Chief Executive Officer.

    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, August 2, 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 Second 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.

    Following the call, a replay of the conference call will be available after 12:00 P.M. on Friday, August 2, 2019 through midnight Friday, August 9, 2019 at 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.), Passcode: 7549869.

    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. 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

    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 August 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)$0.0975 
     U.S. Dividend Income(2)$ 
     Income Not from U.S. Sources(3)$0.2325 
     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.

    Exhibit - Financial Statements

    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

    CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

    (Dollar amounts in thousands, unless otherwise noted)

     Three Months Ended June 30, Six Months Ended June 30,
     2019 2018 2019 2018
    Revenues       
    Equipment leasing revenues$79,200  $59,330  $151,652  $115,114 
    Infrastructure revenues79,805  12,649  131,980  25,709 
    Total revenues159,005  71,979  283,632  140,823 
            
    Expenses       
    Operating expenses92,763  27,593  154,681  55,172 
    General and administrative4,297  4,573  9,029  8,159 
    Acquisition and transaction expenses2,308  1,508  3,782  3,274 
    Management fees and incentive allocation to affiliate5,710  4,495  9,548  8,234 
    Depreciation and amortization42,600  32,844  82,133  62,431 
    Interest expense25,472  12,857  46,775  24,728 
    Total expenses173,150  83,870  305,948  161,998 
            
    Other income (expense)       
    Equity in losses of unconsolidated entities(169) (251) (553) (156)
    Gain on sale of equipment, net22,630  4,996  24,355  4,991 
    Interest income240  74  331  250 
    Other income4,938  1,157  2,334  1,337 
    Total other income27,639  5,976  26,467  6,422 
            
    Income (loss) before income taxes13,494  (5,915) 4,151  (14,753)
    (Benefit from) provision for income taxes(2,299) 534  (1,846) 1,029 
    Net income (loss)15,793  (6,449) 5,997  (15,782)
    Less: Net loss attributable to non-controlling interests in consolidated subsidiaries(4,539) (7,288) (7,955) (16,049)
    Net income attributable to shareholders$20,332  $839  $13,952  $267 
            
    Earnings per share       
    Basic$0.24  $0.01  $0.16  $ 
    Diluted$0.24  $0.01  $0.16  $ 
            
    Weighted Average Shares Outstanding:       
    Basic85,987,769  83,160,037  85,987,115  82,351,736 
    Diluted85,989,029  83,160,047  85,987,115  82,351,858 
                

    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

    CONSOLIDATED BALANCE SHEETS

    (Dollar amounts in thousands, unless otherwise noted)

     (Unaudited)  
     June 30, 2019 December 31, 2018
    Assets   
    Cash and cash equivalents$115,559  $99,601 
    Restricted cash58,817  21,236 
    Accounts receivable, net61,878  53,789 
    Leasing equipment, net1,509,848  1,432,210 
    Operating lease right-of-use assets, net42,993   
    Finance leases, net20,092  18,623 
    Property, plant, and equipment, net855,013  708,853 
    Investments38,727  40,560 
    Intangible assets, net32,409  38,513 
    Goodwill116,584  116,584 
    Other assets236,589  108,809 
    Total assets$3,088,509  $2,638,778 
        
    Liabilities   
    Accounts payable and accrued liabilities$117,280  $112,188 
    Debt, net1,631,136  1,237,347 
    Maintenance deposits180,824  158,163 
    Security deposits41,103  38,539 
    Operating lease liabilities43,459   
    Other liabilities36,474  38,759 
    Total liabilities$2,050,276  $1,584,996 
        
    Commitments and contingencies   
        
    Equity   
    Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 84,846,083 and 84,050,889 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively)$848  $840 
    Additional paid in capital972,836  1,029,376 
    Accumulated deficit(18,865) (32,817)
    Accumulated other comprehensive income34,058   
    Shareholders' equity988,877  997,399 
    Non-controlling interest in equity of consolidated subsidiaries49,356  56,383 
    Total equity1,038,233  1,053,782 
    Total liabilities and equity$3,088,509  $2,638,778 
            

    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

    CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

    (Dollar amounts in thousands, unless otherwise noted)

     Six Months Ended June 30,
     2019 2018
    Cash flows from operating activities:   
    Net income (loss)$5,997  $(15,782)
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
    Equity in losses of unconsolidated entities553  156 
    Gain on sale of equipment, net(24,355) (4,991)
    Security deposits and maintenance claims included in earnings(2,869) (4,325)
    Equity-based compensation928  437 
    Depreciation and amortization82,133  62,431 
    Change in current and deferred income taxes(2,655) 564 
    Change in fair value of non-hedge derivative(250) (182)
    Amortization of lease intangibles and incentives17,288  12,943 
    Amortization of deferred financing costs4,043  2,483 
    Bad debt expense3,062  1,521 
    Other547  21 
    Change in:   
    Accounts receivable(14,675) (10,064)
    Other assets(13,105) (10,318)
    Accounts payable and accrued liabilities8,661  22,091 
    Management fees payable to affiliate871  (668)
    Other liabilities(8,062) 2,835 
    Net cash provided by operating activities58,112  59,152 
        
    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 leases2,996  539 
    Acquisition of leasing equipment(209,171) (205,819)
    Acquisition of property, plant and equipment(159,252) (124,039)
    Acquisition of lease intangibles623  (2,225)
    Purchase deposits for acquisitions(33,637) (17,890)
    Proceeds from sale of leasing equipment71,497  26,499 
    Proceeds from sale of property, plant and equipment7  31 
    Return of capital distributions from unconsolidated entities1,280   
    Return of purchase deposit for aircraft and aircraft engines  240 
    Return of deposit on sale of engine  (400)
    Net cash used in investing activities$(325,657) $(325,091)
        
    Cash flows from financing activities:   
    Proceeds from debt$529,477  $204,350 
    Repayment of debt(128,835) (45,874)
    Payment of deferred financing costs(32,443) (1,819)
    Receipt of security deposits3,475  3,748 
    Return of security deposits(233) (805)
    Receipt of maintenance deposits28,903  22,355 
    Release of maintenance deposits(22,493) (4,276)
    Proceeds from issuance of common shares, net of underwriter's discount  128,450 
    Common shares issuance costs  (789)
    Purchase of non-controlling interest  (3,700)
    Cash dividends(56,767) (54,662)
    Net cash provided by financing activities$321,084  $246,978 
        
    Net increase (decrease) in cash and cash equivalents and restricted cash53,539  (18,961)
    Cash and cash equivalents and restricted cash, beginning of period120,837  92,806 
    Cash and cash equivalents and restricted cash, end of period$174,376  $73,845 
            

    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 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 income attributable to shareholders to Adjusted EBITDA for the three and six months ended June 30, 2019 and 2018:

     Three Months Ended June 30, Change Six Months Ended
    June 30,
     Change
    (in thousands)2019 2018  2019 2018 
    Net income attributable to shareholders$20,332  $839  $19,493  $13,952  $267  $13,685 
    Add: (Benefit from) provision for income taxes(2,299) 534  (2,833) (1,846) 1,029  (2,875)
    Add: Equity-based compensation expense700  229  471  928  437  491 
    Add: Acquisition and transaction expenses2,308  1,508  800  3,782  3,274  508 
    Add: Losses on the modification or extinguishment of debt and capital lease obligations           
    Add: Changes in fair value of non-hedge derivative instruments(3,470) (441) (3,029) (250) 182  (432)
    Add: Asset impairment charges           
    Add: Incentive allocations2,211  573  1,638  2,373  573  1,800 
    Add: Depreciation and amortization expense (1)51,554  38,506  13,048  99,421  75,320  24,101 
    Add: Interest expense25,472  12,857  12,615  46,775  24,728  22,047 
    Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)24  (192) 216  (94) (17) (77)
    Less: Equity in losses of unconsolidated entities169  251  (82) 553  156  397 
    Less: Non-controlling share of Adjusted EBITDA (3)(2,871) (2,447) (424) (5,174) (5,612) 438 
    Adjusted EBITDA (non-GAAP)$94,130  $52,217  $41,913  $160,420  $100,337  $60,083 

    ________________________________________________________

    (1)Includes the following items for the three months ended June 30, 2019 and 2018: (i) depreciation and amortization expense of $42,600 and $32,844, (ii) lease intangible amortization of $2,202 and $2,010 and (iii) amortization for lease incentives of $6,752 and $3,652, respectively. Includes the following items for the six months ended June 30, 2019 and 2018: (i) depreciation and amortization expense of $82,133 and $62,431, (ii) lease intangible amortization of $4,664 and $4,002 and (iii) amortization for lease incentives of $12,624 and $8,887, respectively.
      
    (2)Includes the following items for the three months ended June 30, 2019 and 2018: (i) net loss of $(276) and $(299), (ii) interest expense of $34 and $94 and (iii) depreciation and amortization expense of $266 and $13, respectively. Includes the following items for the six months ended June 30, 2019 and 2018: (i) net loss of $(696) and $(251), (ii) interest expense of $70 and $206 and (iii) depreciation and amortization expense of $532 and $28, respectively.
      
    (3)Includes the following items for the three months ended June 30, 2019 and 2018: (i) equity based compensation of $110 and $25, (ii) provision for income taxes of $10 and $3, (iii) interest expense of $1,109 and $1,032, (iv) depreciation and amortization expense of $1,345 and $1,200, and (v) changes in fair value of non-hedge derivative instruments of $297 and $187, respectively. Includes the following items for the six months ended June 30, 2019 and 2018: (i) equity based compensation of $135 and $62, (ii) provision for income taxes of $46 and $7, (iii) interest expense of $2,008 and $2,324, (iv) depreciation and amortization expense of $2,509 and $3,276 and (v) changes in fair value of non-hedge derivative instruments of $476 and $(57), 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.

    The following table sets forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the six months ended June 30, 2019 and 2018:

     Six Months Ended June 30,
    (in thousands)2019 2018
    Net Cash Provided by Operating Activities$58,112  $59,152 
    Add: Principal Collections on Finance Leases2,996  539 
    Add: Proceeds from Sale of Assets71,504  26,530 
    Add: Return of Capital Distributions from Unconsolidated Entities1,280   
    Less: Required Payments on Debt Obligations (1)(3,125) (3,124)
    Less: Capital Distributions to Non-Controlling Interest   
    Exclude: Changes in Working Capital26,310  (3,876)
    Funds Available for Distribution (FAD)$157,077  $79,221 

    ________________________________________________________

    (1) Required payments on debt obligations for the six months ended June 30, 2019 exclude repayments of $115,000 for the Revolving Credit Facility and $10,710 for the CMQR Credit Agreement, and for the six months ended June 30, 2018 exclude repayments of $25,000 for the Revolving Credit Facility and $17,750 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 and six months ended June 30, 2019:

     Three Months Ended June 30, 2019
    (in thousands)Aviation Leasing Infrastructure Corporate and Other Total
    Funds Available for Distribution (FAD)$126,817 $(9,994) $(29,929) $86,894 
    Less: Principal Collections on Finance Leases      (1,707
    Less: Proceeds from Sale of Assets      (44,205
    Less: Return of Capital Distributions from Unconsolidated Entities      (882)
    Add: Required Payments on Debt Obligations (1)      1,563 
    Add: Capital Distributions to Non-Controlling Interest       
    Include: Changes in Working Capital      (3,821
    Net Cash provided by Operating Activities      $37,842 


    (1)Required payments on debt obligations for the three months ended June 30, 2019 exclude repayments of $75,000 for the Revolving Credit Facility and $5,050 for the CMQR Credit Agreement, both of which were voluntary refinancings as repayments of these amounts were not required at such time.


     Six Months Ended June 30, 2019
    (in thousands)Aviation Leasing Infrastructure Corporate and Other Total
    Funds Available for Distribution (FAD)$227,958 $(14,179) $(56,702) $157,077 
    Less: Principal Collections on Finance Leases      (2,996
    Less: Proceeds from Sale of Assets      (71,504
    Less: Return of Capital Distributions from Unconsolidated Entities      (1,280)
    Add: Required Payments on Debt Obligations (2)      3,125 
    Add: Capital Distributions to Non-Controlling Interest       
    Include: Changes in Working Capital      (26,310
    Net Cash provided by Operating Activities      $58,112 


    (2)Required payments on debt obligations for the six months ended June 30, 2019 exclude repayments of $115,000 for the Revolving Credit Facility and $10,710 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.

    • 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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