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

    Source: Nasdaq GlobeNewswire / 02 May 2019 21:15:05   Europe/London

    NEW YORK, May 02, 2019 (GLOBE NEWSWIRE) -- 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 ResultsQ1’19
    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.

    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

    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.

      
    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 revenues52,175  13,060 
    Total revenues124,627  68,844 
        
    Expenses   
    Operating expenses61,918  27,579 
    General and administrative4,732  3,586 
    Acquisition and transaction expenses1,474  1,766 
    Management fees and incentive allocation to affiliate3,838  3,739 
    Depreciation and amortization39,533  29,587 
    Interest expense21,303  11,871 
    Total expenses132,798  78,128 
        
    Other income (expense)   
    Equity in (losses) earnings of unconsolidated entities(384) 95 
    Gain (loss) on sale of equipment, net1,725  (5)
    Interest income91  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 taxes453  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:   
    Basic85,986,453  81,534,454 
    Diluted85,986,453  81,534,454 


         
    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

    CONSOLIDATED BALANCE SHEETS
      (Unaudited)  
    (Dollar amounts in thousands, except share and per share data) 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 


      
    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 entities384  (95)
    (Gain) loss on sale of equipment, net(1,725) 5 
    Security deposits and maintenance claims included in earnings(2,953) (383)
    Equity-based compensation228  208 
    Depreciation and amortization39,533  29,587 
    Change in current and deferred income taxes338  504 
    Change in fair value of non-hedge derivative3,220  (624)
    Amortization of lease intangibles and incentives8,334  7,226 
    Amortization of deferred financing costs2,025  1,151 
    Bad debt expense2,950  1,441 
    Other221  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 activities20,270  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 leases1,289  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 equipment27,292  6,136 
    Proceeds from sale of property, plant and equipment7  38 
    Return of capital distributions from unconsolidated entities398   
    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 deposits1,935  1,864 
    Return of security deposits(233) (700)
    Receipt of maintenance deposits13,495  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 cash107,736  13,933 
    Cash and cash equivalents and restricted cash, beginning of period120,837  92,806 
    Cash and cash equivalents and restricted cash, end of period$228,573  $106,739 
            

    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 taxes453  495 
    Add: Equity-based compensation expense228  208 
    Add: Acquisition and transaction expenses1,474  1,766 
    Add: Losses on the modification or extinguishment of debt and capital lease obligations   
    Add: Changes in fair value of non-hedge derivative instruments3,220  624 
    Add: Asset impairment charges   
    Add: Incentive allocations162   
    Add: Depreciation and amortization expense (1)47,867  36,814 
    Add: Interest expense21,303  11,871 
    Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)(118) 175 
    Less: Equity in losses (earnings) of unconsolidated entities384  (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.

    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 Leases1,289  129 
    Add: Proceeds from Sale of Assets27,299  6,174 
    Add: Return of Capital Distributions from Unconsolidated Entities398   
    Less: Required Payments on Debt Obligations (1)(1,562) (1,562)
    Less: Capital Distributions to Non-Controlling Interest   
    Exclude: Changes in Working Capital22,489  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.
    • 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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