• FTAI Reports Record Fourth Quarter and Full Year 2019 Results, Dividend of $0.33 per Common Share

    Source: Nasdaq GlobeNewswire / 27 Feb 2020 16:15:11   America/New_York

    NEW YORK, Feb. 27, 2020 (GLOBE NEWSWIRE) -- Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) (the “Company” or “FTAI”) today reported financial results for the quarter and full year ended December 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 ResultsQ4’19 FY19 
    Net Cash Provided by Operating Activities$58,330  $151,043 
    Net Income Attributable to Shareholders$  183,647  $223,270 
    Basic and Diluted Earnings per Common Share$2.13  $2.59 
         
    Funds Available for Distribution (“FAD”) (1)$ 288,618
      $566,436 
    Adjusted EBITDA(1)$233,954  $503,408 


    ________________________________

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


    For the fourth quarter of 2019, total FAD was $288.6 million. This amount includes $174.2 million from our aviation leasing portfolio, and $167.2 million from our infrastructure business, offset by $(52.8) million from corporate and other.

    Joe Adams, FTAI’s CEO, stated, “Our fourth quarter was exceptional, as was all of 2019.  2020 is setting up to be even better.”

    Fourth Quarter 2019 Dividends

    On February 27, 2020, the Company’s Board of Directors (the “Board”) declared a cash dividend on its common shares of $0.33 per share for the quarter ended December 31, 2019, payable on March 24, 2020 to the holders of record on March 13, 2020.

    Additionally, on February 27, 2020, the Board declared cash dividends on its Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares (“Series A Preferred Shares”) and Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”) of $0.51563 and $0.60000 per share, respectively, for the quarter ended December 31, 2019, payable on March 16, 2020 to the holders of record on March 9, 2020.

    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 Annual Report on Form 10-K, 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, February 28, 2020 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 2019 Fourth 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, February 28, 2020 through midnight Friday, March 6, 2020 at 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.), Passcode: 3473034.

    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 fiscal year 2020.  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
    (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 common dividend and the Series A Preferred and Series B Preferred dividends declared in February 2020 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)$0.02000 
    U.S. Dividend Income(2)$ 
    Income Not from U.S. Sources(3)$ 
    U.S. Long Term Capital Gain (4) $0.31000 
    Distribution Per Share $0.33000 


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


    Series B Preferred Distribution Components 
    Guaranteed Payments(5)$0.60000 
    Distribution Per Share
    $0.60000 


    (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 per share data)

     Three Months Ended December 31, Year Ended December 31,
     2019 2018 2019 2018
    Revenues       
    Equipment leasing revenues$110,411  $67,035  $349,322  $253,039 
    Infrastructure revenues50,921  61,617  229,452  89,073 
    Total revenues161,332  128,652  578,774  342,112 
            
    Expenses       
    Operating expenses67,267  63,022  288,036  136,570 
    General and administrative5,128  4,955  20,441  17,126 
    Acquisition and transaction expenses8,498  2,234  17,623  6,968 
    Management fees and incentive allocation to affiliate19,133  3,646  36,059  15,726 
    Depreciation and amortization44,843  38,793  169,023  133,908 
    Interest expense24,267  17,694  95,585  56,845 
    Total expenses169,136  130,344  626,767  367,143 
            
    Other income (expense)       
    Equity in losses of unconsolidated entities(848) (410) (2,375) (1,008)
    Gain (loss) on sale of assets, net141,850  (1,287) 203,250  3,911 
    Asset impairment(4,726)   (4,726) —  
    Interest income79  127  531  488 
    Other (expense) income(20) 1,909  3,445  3,983 
    Total other income136,335  339  200,125  7,374 
    Income (loss) from continuing operations before income taxes128,531  (1,353) 152,132  (17,657)
    Provision for income taxes18,999  869  17,810  2,449 
    Net income (loss) from continuing operations109,532  (2,222) 134,322  (20,106)
    Net income from discontinued operations, net of income taxes71,579  1,577  73,462  4,402 
    Net income (loss)181,111  (645) 207,784  (15,704)
    Less: Net income (loss) attributable to non-controlling interests in consolidated subsidiaries:       
    Continuing operations(4,520) (1,790) (17,571) (21,925)
    Discontinued operations146  108  247  339 
    Dividends on preferred shares1,838  —   1,838  —  
    Net income attributable to shareholders$183,647  $1,037  $223,270  $5,882 
            
    Earnings (loss) per share:       
    Basic       
    Continuing operations$1.30  $(0.01) $1.74  $0.02 
    Discontinued operations$0.83  $0.02  $0.85  $0.05 
    Diluted       
    Continuing operations$1.30  $(0.01) $1.74  $0.02 
    Discontinued operations$0.83  $0.02  $0.85  $0.05 
    Weighted average shares outstanding:       
    Basic85,997,619  85,065,125  85,992,019  83,654,068 
    Diluted86,090,207  85,068,966  86,029,363  83,664,833 

    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

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

      December 31,
      2019 2018
    Assets    
    Cash and cash equivalents $226,512   $99,601  
    Restricted cash 16,005   21,236  
    Accounts receivable, net 49,470   46,414  
    Leasing equipment, net 1,707,059   1,432,210  
    Operating lease right-of-use assets, net 37,466   —  
    Finance leases, net 8,315   18,623  
    Property, plant, and equipment, net 732,109   662,019  
    Investments 180,550   40,560  
    Intangible assets, net 27,692   38,498  
    Goodwill 122,639   115,990  
    Other assets 129,105   106,883  
    Assets of discontinued operations —   56,744  
    Total assets $3,236,922   $2,638,778  
         
    Liabilities    
    Accounts payable and accrued liabilities $144,855   $100,668  
    Debt, net 1,420,928   1,215,108  
    Maintenance deposits 208,944   158,163  
    Security deposits 45,252   38,539  
    Operating lease liabilities 36,968   —  
    Other liabilities 41,118   37,055  
    Liabilities of discontinued operations —   35,463  
    Total liabilities $1,898,065   $1,584,996  
         
    Commitments and contingencies    
         
    Equity    
    Common shares ($0.01 par value per share; 2,000,000,000 shares authorized; 84,917,448 and 84,050,889 shares issued and outstanding as of December 31, 2019 and 2018, respectively) $849   $840  
    Preferred shares ($0.01 par value per share; 200,000,000 shares authorized; 8,050,000 and 0 shares issued and outstanding as of December 31, 2019 and 2018, respectively) 81   —  
    Additional paid in capital 1,110,122   1,029,376  
    Retained earnings (accumulated deficit) 190,453   (32,817)
    Accumulated other comprehensive income 372   —  
    Shareholders' equity 1,301,877   997,399  
    Non-controlling interest in equity of consolidated subsidiaries 36,980   56,383  
    Total equity $1,338,857   $1,053,782  
    Total liabilities and equity $3,236,922   $2,638,778  

    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

    CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
    (Dollar amounts in thousands, unless otherwise noted)

     Year Ended December 31,
     2019 2018
    Cash flows from operating activities:   
    Net income (loss)$207,784  $(15,704)
    Adjustments to reconcile net income (loss) to cash provided by operating activities:   
    Equity in losses of unconsolidated entities2,375  1,008 
    Gain on sale of subsidiaries(198,764)  
    Gain on sale of assets, net(81,954) (3,911)
    Security deposits and maintenance claims included in earnings(20,385) (6,323)
    Equity-based compensation8,404  901 
    Depreciation and amortization171,225  136,354 
    Asset impairment4,726   
    Change in current and deferred income taxes14,495  649 
    Change in fair value of non-hedge derivatives4,555  (5,523)
    Amortization of lease intangibles and incentives30,162  26,659 
    Amortization of deferred financing costs8,333  5,430 
    Bad debt expense3,986  1,771 
    Other827  (4)
    Change in:   
     Accounts receivable(22,622) (23,340)
     Other assets(17,890) (26,212)
     Accounts payable and accrued liabilities31,543  30,471 
     Management fees payable to affiliate19,080  1,820 
     Other liabilities(14,837) 9,651 
    Net cash provided by operating activities151,043  133,697 
        
    Cash flows from investing activities:   
    Investment in notes receivable  (912)
    Investment in unconsolidated entities and available for sale securities(13,500) (1,115)
    Principal collections on finance leases13,398  1,981 
    Acquisition of leasing equipment(568,569) (497,988)
    Acquisition of property, plant and equipment(331,171) (229,963)
    Acquisition of lease intangibles606  (11,396)
    Acquisition of remaining interest in JV investment(28,828)  
    Purchase deposit for aircraft and aircraft engines(1,000) (10,150)
    Proceeds from sale of subsidiaries183,819   
    Proceeds from sale of leasing equipment248,454  44,062 
    Proceeds from sale of property, plant and equipment  23 
    Proceeds from deposit on sale of leasing equipment  240 
    Return of deposit on sale of leasing equipment  (400)
    Return of capital distributions from unconsolidated entities1,555  2,085 
    Net cash used in investing activities$(495,236) $(703,533)

    FORTRESS TRANSPORTATION AND INFRASTRUCTURE INVESTORS LLC

    CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
    (Dollar amounts in thousands)

     Year Ended December 31,
     2019 2018
    Cash flows from financing activities:   
    Proceeds from debt$788,829  $750,980 
    Repayment of debt(405,131) (218,819)
    Payment of deferred financing costs(34,218) (3,055)
    Receipt of security deposits7,887  9,264 
    Return of security deposits(368) (1,775)
    Receipt of maintenance deposits65,279  53,645 
    Release of maintenance deposits(26,940) (25,582)
    Proceeds from issuance of common shares, net of underwriter's discount  148,318 
    Common shares issuance costs  (820)
    Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs193,992   
    Settlement of equity-based compensation(8,078)  
    Purchase of non-controlling interest shares  (3,705)
    Cash dividends - common shares(113,541) (110,584)
    Cash dividends - preferred shares(1,838)  
    Net cash provided by financing activities465,873  597,867 
        
    Net increase in cash and cash equivalents and restricted cash121,680  28,031 
    Cash and cash equivalents and restricted cash, beginning of period120,837  92,806 
    Cash and cash equivalents and restricted cash, end of period$242,517  $120,837 
        
    Supplemental disclosure of cash flow information:   
    Cash paid for interest, net of capitalized interest$83,164  $43,636 
    Cash paid for taxes1,072  721 
        

    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 (losses) 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, 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 and years ended December 31, 2019 and December 31, 2018:

     Three Months Ended December 31, Year Ended December 31,
    (in thousands)2019 2018 2019 2018
    Net income (loss) attributable to shareholders from continuing operations$112,214  $(432) $150,055  $1,819 
    Add: Provision for income taxes18,999  869  17,810  2,449 
    Add: Equity-based compensation expense343  186  1,509  717 
    Add: Acquisition and transaction expenses8,498  2,234  17,623  6,968 
    Add: Losses on the modification or extinguishment of debt and capital lease obligations       
    Add: Changes in fair value of non-hedge derivative instruments425  (6,090) 4,555  (5,523)
    Add: Asset impairment charges4,726    4,726   
    Add: Incentive allocations15,122  (146) 21,231  407 
    Add: Depreciation and amortization expense (1)50,997  47,823  199,185  160,567 
    Add: Interest expense24,267  17,694  95,585  56,845 
    Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)(492) (27) (1,387) 359 
    Less: Equity in losses of unconsolidated entities848  410  2,375  1,008 
    Less: Non-controlling share of Adjusted EBITDA (3)(1,993) (726) (9,859) (9,744)
    Adjusted EBITDA (non-GAAP)$233,954  $61,795  $503,408  $215,872 

    ________________________________________________________

    (1)Includes the following items for the three months ended December 31, 2019 and 2018: (i) depreciation and amortization expense of $44,843 and $38,793, (ii) lease intangible amortization of $1,445 and $2,675 and (iii) amortization for lease incentives of $4,709 and $6,355, respectively.
     Includes the following items for the years ended December 31, 2019 and 2018: (i) depreciation and amortization expense of $169,023 and $133,908, (ii) lease intangible amortization of $7,181 and $8,588 and (iii) amortization for lease incentives of $22,981 and $18,071, respectively.
    (2)Includes the following items for the three months ended December 31, 2019 and 2018: (i) net loss of $(770) and $(463), (ii) interest expense of $30 and $174 and (iii) depreciation and amortization expense of $248 and $262, respectively.
     Includes the following items for the years ended December 31, 2019 and 2018: (i) net loss of $(2,563) and $(1,196), (ii) interest expense of $131 and $477 and (iii) depreciation and amortization expense of $1,045 and $1,078, respectively.
    (3)Includes the following items for the three months ended December 31, 2019 and 2018: (i) equity based compensation of $54 and $25, (ii) provision for income taxes of $22 and $47, (iii) interest expense of $642 and $844, (iv) depreciation and amortization expense of $1,200 and $1,058 and (v) changes in fair value of non-hedge derivative instruments of $75 and $(1,248), respectively.
     Includes the following items for the years ended December 31, 2019 and 2018: (i) equity based compensation of $230 and $113, (ii) provision for income taxes of $60 and $57, (iii) interest expense of $3,400 and $4,624, (iv) depreciation and amortization expense of $4,833 and $6,049 and (v) changes in fair value of non-hedge derivative instruments of $1,336 and $(1,099), respectively.

    The Company uses Funds Available for Distribution (“FAD”) in evaluating its ability to meet its 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. The Company believes FAD is a useful metric for investors and analysts for similar purposes.

    The Company defines 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 excluding changes in working capital.

    The following table sets forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the years ended December 31, 2019 and 2018:

     Year Ended December 31,
    (in thousands)2019 2018
    Net Cash Provided by Operating Activities$151,043  $133,697 
    Add: Principal Collections on Finance Leases13,398  1,981 
    Add: Proceeds from Sale of Assets432,273  44,085 
    Add: Return of Capital Distributions from Unconsolidated Entities1,555  2,085 
    Less: Required Payments on Debt Obligations (1)(36,559) (7,793)
    Less: Capital Distributions to Non-Controlling Interest   
    Exclude: Changes in Working Capital4,726  7,610 
    Funds Available for Distribution (FAD)$566,436  $181,665 

    _____________________________________________________

    (1)Required payments on debt obligations for the year ended December 31, 2019 exclude repayments of $350,000 for the Revolving Credit Facility and $18,572 for the CMQR Credit Agreement, and for the year ended December 31, 2018 exclude repayments of $175,000 for the Revolving Credit Facility and $36,026 for the CMQR Credit Agreement.

    The following tables set forth a reconciliation of Net Cash Provided by Operating Activities to FAD for the three months ended and year ended December 31, 2019:

     Three Months Ended December 31, 2019
    (in thousands)Equipment Leasing Infrastructure Corporate and Other Total
    Funds Available for Distribution (FAD)$174,173  $167,289  $(52,844) $288,618 
    Less: Principal Collections on Finance Leases      (304)
    Less: Proceeds from Sale of Assets      (265,976)
    Less: Return of Capital Distributions from Unconsolidated Entities      (131)
    Add: Required Payments on Debt Obligations      7,046 
    Add: Capital Distributions to Non-Controlling Interest       
    Include: Changes in Working Capital      29,077 
    Net Cash Provided by Operating Activities      $58,330 


     Year Ended December 31, 2019
    (in thousands)Equipment Leasing Infrastructure Corporate and Other Total
    Funds Available for Distribution (FAD)$587,810  $122,165  $(143,539) $566,436 
    Less: Principal Collections on Finance Leases      (13,398)
    Less: Proceeds from Sale of Assets      (432,273)
    Less: Return of Capital Distributions from Unconsolidated Entities      (1,555)
    Add: Required Payments on Debt Obligations      36,559 
    Add: Capital Distributions to Non-Controlling Interest       
    Include: Changes in Working Capital      (4,726)
    Net Cash Provided by Operating Activities      $151,043 

    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.

     

    Primary Logo

Share on,