FTAI Aviation Ltd. (NASDAQ:FTAI) Q4 2024 Earnings Conference Call February 27, 2025 8:00 AM ET Company Participants Alan Andreini – Head-Investor Relations Joe Adams – Chief Executive Officer Angela Nam – Chief Financial Officer David Moreno – Chief Operating Officer Conference Call Participants Kristine Liwag – Morgan Stanley Sheila Kahyaoglu – Jefferies Josh Sullivan – Benchmark Company Giuliano Bologna – Compass Point Brandon Oglenski – Barclays Hillary Cacanando – Deutsche Bank Ken Herbert – RBC Capital ...

Core Viewpoint - A class action securities lawsuit has been filed against FTAI Aviation Ltd. alleging securities fraud that affected investors between July 23, 2024, and January 15, 2025 [1][2]. Summary by Sections Class Action Details - The lawsuit aims to recover losses for investors who were adversely affected by alleged fraudulent activities during the specified period [1]. - The complaint claims that FTAI Aviation misrepresented its financial performance by reporting one-time engine sales as maintenance repair and overhaul revenue, overstating sales and demand, and misleadingly lowering the reported cost of goods sold [2]. Allegations Against FTAI Aviation - The company allegedly reported one-time engine sales as maintenance revenue despite only performing limited repair work [2]. - FTAI is accused of presenting whole engine sales as individual module sales, which inflated sales figures [2]. - The company reportedly depreciates engines not on lease, which misrepresents the cost of goods sold and inflates EBITDA [2]. - Positive statements made by the company regarding its business and prospects were claimed to be materially misleading [2]. Next Steps for Investors - Investors who suffered losses during the relevant timeframe have until March 18, 2025, to request to be appointed as lead plaintiff [3]. - Participation in the lawsuit does not require serving as a lead plaintiff, and there are no out-of-pocket costs for class members [3]. Firm Background - Levi & Korsinsky has a history of securing significant compensation for shareholders and has extensive expertise in complex securities litigation [4]. - The firm has been recognized as one of the top securities litigation firms in the United States for seven consecutive years [4].

Core Viewpoint - FTAI Aviation reported quarterly earnings of $0.84 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, but down from $1.09 per share a year ago, indicating a 22.9% year-over-year decline in earnings [1] - The company achieved revenues of $498.82 million for the quarter, surpassing the Zacks Consensus Estimate by 3.62% and showing a significant increase from $312.74 million in the same quarter last year, representing a 59.5% year-over-year growth [2] Earnings Performance - FTAI Aviation has surpassed consensus EPS estimates two times over the last four quarters, with a recent earnings surprise of 1.20% [1][2] - The company has consistently topped consensus revenue estimates, achieving this four times in the last four quarters [2] Stock Performance - FTAI Aviation shares have declined approximately 7.7% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations for it to outperform the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $481.91 million, and for the current fiscal year, it is $6.24 on revenues of $2.06 billion [7] - The aerospace and defense equipment industry, to which FTAI Aviation belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

SAN FRANCISCO, Feb. 26, 2025 (GLOBE NEWSWIRE) -- FTAI Aviation Ltd. (NASDAQ: FTAI) saw its shares jump on Feb. 20, after the aerospace firm dismissed allegations made by activist short-sellers Muddy Waters and Snowcap Research as “without merit.” While the company’s Audit Committee concluded that the claims lacked foundation, FTAI failed to provide specific rebuttals to detailed claims raised by Muddy Waters and a second short seller, Snowcap. FTAI’s broad dismissal of the short-seller reports, without prov ...

Financial Performance - Net income attributable to shareholders for Q4 2024 was $86,692,000, with basic earnings per share of $0.85 and diluted earnings per share of $0.84[2] - For the fiscal year 2024, net income attributable to shareholders in Aerospace Products was $346 million, representing a 92% year-over-year increase, and Adjusted EBITDA increased by 138% year-over-year[6] - Total revenues for Q4 2024 were $498,819,000, compared to $312,737,000 in Q4 2023, marking a significant increase[23] - The company reported total expenses of $340,610,000 for Q4 2024, up from $224,876,000 in Q4 2023[23] - Adjusted EBITDA for the year ended December 31, 2024, was $862,050, representing a 44% increase from $597,282 in 2023[28] - Net income attributable to shareholders for the year ended December 31, 2024, was $(32,079), compared to $212,022 in 2023[28] - Adjusted EBITDA for Aerospace Products was $380,636 for the year ended December 31, 2024, compared to $160,009 in 2023, marking a 138% increase[32] Dividends and Cash Flow - The company declared a cash dividend of $0.30 per ordinary share for Q4 2024, payable on March 24, 2025[3] - FTAI targets adjusted free cash flow of approximately $650 million for 2025, following significant growth investments in 2024[6] Future Projections - FTAI expects 2025 Adjusted EBITDA to be approximately $1.1 to $1.15 billion, with $500 million from Aviation Leasing and $600 to $650 million from Aerospace Products[10] - FTAI is increasing its 2026 Adjusted EBITDA guidance from $1.25 billion to approximately $1.4 billion, reflecting expected upside from the Strategic Capital Initiative[11] Assets and Liabilities - Total assets increased to $4,037,952, up 36% from $2,964,685 in 2023[25] - Total current assets rose to $1,226,018, a 83% increase from $671,434 in 2023[25] - Long-term debt increased to $3,440,478, up 37% from $2,517,343 in 2023[25] - Shareholders' equity decreased to $81,368, down 54% from $175,349 in 2023[25] - Total current liabilities increased to $347,246, up 91% from $181,843 in 2023[25] Inventory and Cash Management - Cash and cash equivalents increased to $115,116, a 27% increase from $90,756 in 2023[25] - Inventory increased significantly to $551,156, up 74% from $316,637 in 2023[25] Operational Developments - The joint venture with IAG Engine Center is expected to add capacity to maintain 450 modules (150 engines) per year, increasing FTAI's total maintenance capacity to 1,800 CFM56 modules (600 engines)[7] - FTAI's maintenance facility in Rome is expected to be fully operational within 24 months, with piece-part repair capabilities anticipated in the second half of 2025[7]

Financial Overview - FTAI Aviation Ltd. reported a net income attributable to shareholders of $86.692 million for Q4 2024, with basic earnings per share of $0.85 and diluted earnings per share of $0.84 [2][21] - The company achieved an Adjusted EBITDA of $252.015 million for Q4 2024 [2][21] Dividends - The Board declared a cash dividend of $0.30 per ordinary share for Q4 2024, payable on March 24, 2025 [3] - Cash dividends for Series C and Series D Preferred Shares were declared at $0.51563 and $0.59375 per share, respectively, payable on March 17, 2025 [4] Business Highlights - A subsidiary of FTAI entered into an agreement to acquire a 50% stake in IAG Engine Center, forming a joint venture named Quick Turn Engine Center Europe [6] - The new joint venture is expected to add capacity to maintain 450 modules (150 engines) per year, increasing FTAI's total maintenance capacity to 1,800 CFM56 modules (600 engines) [7] Growth and Financial Performance - FTAI's Aerospace Products segment reported a net income of $346 million for fiscal year 2024, a 92% increase year-over-year, with Adjusted EBITDA up 138% year-over-year [9] - The company targets an adjusted free cash flow of approximately $650 million for 2025, following significant growth investments in 2024 [9] Outlook - FTAI expects 2025 Adjusted EBITDA of approximately $1.1 to $1.15 billion, with $500 million from Aviation Leasing and $600 to $650 million from Aerospace Products [11] - The 2026 Adjusted EBITDA forecast has been increased from $1.25 billion to approximately $1.4 billion, reflecting expected incremental upside from the Strategic Capital Initiative [12] Key Performance Measures - Adjusted EBITDA is utilized as a key performance measure, providing insights into operational performance and resource allocation decisions [27][28]

Core Viewpoint - FTAI Aviation Ltd. has secured a $2.5 billion commitment for asset-level debt financing to support its Strategic Capital Initiative, enabling the deployment of over $4 billion into on-lease aircraft while maintaining an asset-light business model [1][2][3] Group 1: Financing and Strategic Initiative - The financing is led by ATLAS SP Partners and Deutsche Bank AG, with FTAI aiming to become a major investor in mid-life, on-lease aircraft [1][2] - The Strategic Capital Initiative will utilize engine and module exchanges through FTAI's Maintenance, Repair and Exchange business, enhancing operational efficiency [1][2] - The total addressable market for FTAI's Aerospace Products business is estimated at $22 billion, with the company currently holding a 5% market share [2][4] Group 2: Market Context and Growth Potential - The aircraft finance industry is experiencing robust growth due to record-high global travel, providing favorable conditions for FTAI's initiatives [3] - FTAI's innovative approach to aircraft engine maintenance is expected to transform asset owners' perspectives and drive significant growth in the market [2][3] - The company anticipates continued expansion in its customer base, aiming to deliver cost and time savings through its differentiated services [2] Group 3: Advisory and Support - Legal counsel for the Strategic Capital Initiative includes Kirkland & Ellis LLP, McGuireWoods LLP, and Gibson, Dunn & Crutcher LLP, with Lincoln International LLC serving as financial advisor [5] - ATLAS SP Partners acted as the sole structuring agent and lead arranger for the financing, indicating strong institutional support for FTAI's strategy [5] Group 4: Company Overview - FTAI specializes in owning and maintaining commercial jet engines, particularly CFM56 and V2500 engines, and offers a proprietary portfolio of products to enhance cost savings for clients [8] - The company also invests in aviation assets and aerospace products that generate stable cash flows and potential for earnings growth [8]

Core Viewpoint - FTAI Aviation Ltd. has secured a $2.5 billion asset-level debt financing commitment for its Strategic Capital Initiative, enabling the deployment of over $4 billion into on-lease aircraft, specifically 737NG and A320ceo models, while maintaining an asset-light business model [1][2][3]. Group 1: Strategic Capital Initiative - The Strategic Capital Initiative (SCI) aims to become one of the largest investors in mid-life, on-lease aircraft, supported by a $2.5 billion financing commitment from ATLAS SP Partners and Deutsche Bank [1][2]. - The financing will allow FTAI to leverage its Maintenance, Repair and Exchange (MRE) business, which is expected to enhance its market position in aircraft engine maintenance [2][3]. Group 2: Market Potential - FTAI's Aerospace Products business operates within a $22 billion total addressable market, currently holding only a 5% market share, indicating significant growth potential [2][4]. - The company is positioned to drive cost and time savings for asset owners through its differentiated MRE services, which are gaining traction in the market [2][8]. Group 3: Financial and Operational Insights - The financing commitment is structured to support FTAI's innovative approach to aircraft engine maintenance, which is expected to create future partnership opportunities [3]. - FTAI's business model focuses on generating strong and stable cash flows while pursuing asset appreciation through investments in aviation assets and aerospace products [8].

Core Viewpoint - FTAI Aviation Ltd. is facing a class action securities lawsuit due to alleged securities fraud that affected investors between July 23, 2024, and January 15, 2025 [1][2]. Group 1: Allegations of Fraud - The lawsuit claims that FTAI Aviation misrepresented its financials by reporting one-time engine sales as maintenance repair & overhaul revenue, despite only performing limited repair and maintenance work on the sold engine assets [2]. - It is alleged that FTAI presented whole engine sales as individual module sales, which resulted in an overstatement of sales and demand [2]. - The company reportedly depreciates engines that are not on lease, misleadingly lowering the reported cost of goods sold and inflating EBITDA [2]. - Due to these actions, the positive statements made by the defendants regarding the company's business, operations, and prospects were materially misleading and lacked a reasonable basis [2]. Group 2: Legal Process and Participation - Investors who suffered losses during the specified timeframe have until March 18, 2025, to request to be appointed as lead plaintiff in the case [3]. - Class members may be entitled to compensation without any out-of-pocket costs or fees, and participation does not require serving as a lead plaintiff [3]. Group 3: Firm Background - Levi & Korsinsky, LLP has a history of securing hundreds of millions of dollars for shareholders and has extensive expertise in complex securities litigation [4]. - The firm has been recognized in ISS Securities Class Action Services' Top 50 Report for seven consecutive years as one of the top securities litigation firms in the United States [4].

Core Viewpoint - A securities class action lawsuit has been filed against FTAI Aviation Ltd. for allegedly making materially false and misleading statements regarding its business operations and financial performance during the Class Period from July 23, 2024, to January 15, 2025 [1][2]. Group 1: Allegations Against FTAI - The complaint alleges that FTAI misrepresented one-time engine sales as Maintenance Repair & Overhaul revenue, despite only performing limited repair and maintenance work on the sold engine assets [2]. - FTAI is accused of presenting whole engine sales as individual module sales, which inflated reported sales and demand [2]. - The company allegedly depreciates engines not on lease, misleadingly lowering the reported cost of goods sold and inflating EBITDA [2]. - As a result of these practices, the positive statements made by FTAI regarding its business and prospects were materially misleading and lacked a reasonable basis [2]. Group 2: Lead Plaintiff Process - Investors in FTAI have until March 18, 2025, to seek appointment as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel [3]. - A lead plaintiff acts on behalf of all class members in directing the litigation and is typically the investor or small group of investors with the largest financial interest [3]. - The decision to serve as a lead plaintiff does not affect an investor's ability to share in any recovery from the lawsuit [3]. Group 3: Firm Information - Kessler Topaz Meltzer & Check, LLP has a reputation for prosecuting class actions and has recovered billions for victims of corporate misconduct [4]. - The firm encourages FTAI investors who have suffered significant losses to contact them for more information [4].