10-QPeriod: Q2 FY2017

FTAI Aviation Ltd. Quarterly Report for Q2 Ended Jun 30, 2017

Filed August 4, 2017For Securities:FTAIFTAIMFTAIN

Summary

FTAI Aviation Ltd. (FTAI) reported its second-quarter 2017 financial results, showcasing significant growth in total revenues, which increased to $51.2 million from $33.2 million in the prior year's quarter, primarily driven by a substantial rise in equipment leasing revenues, especially from its Aviation Leasing segment. Despite the top-line growth, the company reported a net loss attributable to shareholders of $1.5 million for the quarter, an improvement from a $11.2 million loss in the same period last year. This improvement was largely due to a significant decrease in other expenses, notably the absence of a $7.5 million asset impairment charge recorded in the prior year. However, total expenses also increased due to higher operating expenses, depreciation, and interest expense, largely driven by new asset acquisitions and debt issuances. The company ended the period with total assets of $1.74 billion and total equity of $1.10 billion.

Financial Statements
Beta
Revenue$51.19M
Operating Expenses$58.31M
Interest Expense$7.68M
Net Income-$1.46M
EPS (Basic)$-0.02
EPS (Diluted)$-0.02
Shares Outstanding (Basic)75.76M
Shares Outstanding (Diluted)75.76M

Key Highlights

  • 1Total revenues increased significantly by 54% year-over-year to $51.2 million, primarily driven by a strong performance in the Aviation Leasing segment.
  • 2The company reported a reduced net loss attributable to shareholders of $1.5 million, compared to a $11.2 million loss in the prior year's second quarter.
  • 3Equipment leasing revenues more than doubled to $40.4 million, with Aviation Leasing lease income and maintenance revenue showing substantial increases.
  • 4Infrastructure revenues remained relatively flat at $10.8 million, with increases in Railroad and Jefferson Terminal segments offset by declines in Ports and Terminals and Jefferson Terminal terminal services.
  • 5Total operating expenses increased by $4.5 million, mainly due to higher compensation, facility operations, and professional fees across various segments.
  • 6Interest expense increased by $2.6 million, largely due to the issuance of Senior Notes in March 2017.
  • 7The company's total assets grew to $1.74 billion, while total equity decreased slightly to $1.10 billion, impacted by dividends declared.
  • 8FTAI Aviation entered into a revolving credit facility providing up to $75 million in liquidity.

Frequently Asked Questions

FTAI Aviation Ltd. reported a significant increase in total revenues to $51.2 million in Q2 2017, up from $33.2 million in Q2 2016. This growth was primarily driven by higher equipment leasing revenues, especially in the Aviation Leasing segment. However, the company still reported a net loss attributable to shareholders of $1.5 million for the quarter, although this was an improvement from a $11.2 million loss in the prior year's quarter. Total expenses increased due to higher operating, depreciation, and interest costs.

The substantial revenue growth was mainly attributed to the Aviation Leasing segment, which saw increased lease income and maintenance revenue. This was due to a higher number of aircraft and engines on lease compared to the previous year. The company also acquired new assets, contributing to this growth.

Total assets increased to $1.74 billion as of June 30, 2017. Total equity decreased slightly to $1.10 billion from $1.17 billion at the end of 2016, primarily impacted by dividends declared during the period. Debt levels increased significantly, with total debt, net, rising to $494.8 million from $259.5 million at the end of 2016, largely due to the issuance of Senior Notes.

FTAI Aviation's liquidity improved during the period. Net cash provided by operating activities was $33.3 million for the first six months of 2017, a significant increase from $0.99 million in the same period of 2016. Additionally, the company entered into a $75 million revolving credit facility on June 16, 2017, further enhancing its liquidity. However, the company also drew down $60,000 on this facility on July 28, 2017, after the reporting period.