10-QPeriod: Q3 FY2015

FTAI Aviation Ltd. Quarterly Report for Q3 Ended Sep 30, 2015

Filed November 4, 2015For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. reported a net loss attributable to shareholders of $(11.7) million for the three months ended September 30, 2015, a significant shift from a net income of $4.0 million in the same period of the prior year. This downturn was primarily driven by increased expenses across various segments, notably higher operating expenses, depreciation, and management fees, which outpaced the substantial growth in total revenues. The company experienced revenue growth across its Equipment Leasing and Infrastructure segments, largely due to acquisitions in 2014 and 2015. However, significant impairments in the Shipping Containers segment, specifically within its joint venture, along with higher interest expenses and increased depreciation, impacted overall profitability. The company's balance sheet shows total assets of $1.68 billion and total equity of $1.32 billion as of September 30, 2015. Total debt decreased significantly from $592.9 million at the end of 2014 to $274.9 million as of September 30, 2015, largely due to the cancellation of Series 2010 Bonds. Cash and cash equivalents saw a substantial increase from $22.1 million to $448.3 million, bolstered by proceeds from the company's IPO in May 2015. Despite the revenue growth and debt reduction, the company's profitability was severely impacted by higher expenses and impairments, leading to a net loss for the quarter.

Financial Highlights

45 data points
Beta

Revenue

$35.23M

Net Income

-$11.74M

-33.3% Net Margin

EPS (Diluted)

$-0.16

Total Assets

$1.68B

Cash & Equivalents

$448.30M

Free Cash Flow

-$5.21M

Financial Statements
Beta
Revenue$35.23M
Operating Expenses$43.48M
Interest Expense$4.67M
Net Income-$11.74M
EPS (Basic)$-0.16
EPS (Diluted)$-0.16
Shares Outstanding (Basic)75.72M
Shares Outstanding (Diluted)75.72M

Key Highlights

  • 1FTAI Aviation Ltd. reported a net loss attributable to shareholders of $(11.7) million for Q3 2015, compared to a net income of $4.0 million in Q3 2014.
  • 2Total revenues significantly increased to $35.2 million in Q3 2015 from $16.1 million in Q3 2014, driven by growth in both Equipment Leasing and Infrastructure segments.
  • 3Total expenses more than doubled from $17.7 million in Q3 2014 to $43.5 million in Q3 2015, primarily due to higher operating expenses, depreciation, and management fees.
  • 4The company's cash and cash equivalents increased substantially to $448.3 million as of September 30, 2015, from $22.1 million at December 31, 2014, largely due to proceeds from the IPO.
  • 5Total debt decreased significantly to $274.9 million from $592.9 million, primarily due to the cancellation of Series 2010 Bonds.
  • 6The Shipping Containers segment was significantly impacted by an impairment charge of $20.6 million within its unconsolidated entity, Intermodal Finance I, Ltd.
  • 7The company completed an IPO in May 2015, issuing 20 million shares at $17.00 per share, followed by an additional 2.2 million shares due to overallotment option exercise.

Frequently Asked Questions

FTAI Aviation Ltd. reported a net loss attributable to shareholders of $(11.7) million for the three months ended September 30, 2015. This compares unfavorably to a net income of $4.0 million in the same period of the previous year. Revenue grew significantly to $35.2 million, but this was offset by a sharp increase in expenses, leading to the net loss.

The company saw a substantial increase in its cash and cash equivalents, rising to $448.3 million from $22.1 million, primarily due to the proceeds from its Initial Public Offering (IPO) completed in May 2015. Additionally, total debt was reduced significantly from $592.9 million to $274.9 million, largely due to the cancellation of Series 2010 Bonds.

The net loss was primarily driven by a significant increase in total expenses, which more than doubled year-over-year to $43.5 million. Key contributors to this increase included higher operating expenses, depreciation and amortization, and management fees. Furthermore, an impairment charge within the Shipping Containers segment's joint venture negatively impacted profitability.

FTAI operates across Equipment Leasing (Aviation Leasing, Offshore Energy, Shipping Containers) and Infrastructure (Jefferson Terminal, Railroad). While Aviation Leasing and Offshore Energy showed revenue growth, the Shipping Containers segment was significantly impacted by an impairment. The Infrastructure segments, Jefferson Terminal and Railroad, also contributed to revenue but faced higher operating costs. The overall increase in expenses across all segments outpaced revenue growth, leading to the net loss.