FTAI Aviation(FTAI) - 2022 Q1 - Quarterly Report

Forward-Looking Statements and Risk Factors Summary Forward-Looking Statements Forward-looking statements are based on current beliefs and assumptions, subject to risks that could materially alter actual results - Forward-looking statements are identified by words like 'outlook,' 'believes,' 'expects,' 'potential,' and are based on historical performance, current plans, estimates, and expectations[9] - The inclusion of forward-looking information should not be seen as a guarantee that future plans, estimates, or expectations will be achieved[9] Risk Factors Summary Principal risk factors, including economic conditions, asset liquidity, customer defaults, competition, and regulatory changes, could adversely affect the company - Key risks include changes in economic conditions, reductions in cash flows from assets, ability to acquire assets, changes in asset composition due to spin-off, lack of asset liquidity, and adverse changes in financing markets[11] - Operational risks cover customer defaults, contract renewals, capital availability for acquisitions, asset concentration, competition, joint venture risks, integration of acquired businesses, asset obsolescence, uninsurable losses, and substantial capital expenditures for infrastructure operations[11] - Other significant risks include legislative/regulatory environment, exposure to volatile oil and gas prices, difficulties in legal redress in less developed legal systems, maintaining Investment Company Act exemption, leverage utilization, foreign currency risk, internal control effectiveness, environmental risks, interest rate changes, government actions, dependence on the Manager, effects of the SoftBank merger, share price volatility, and inability to pay future dividends[11][14] Part I - Financial Information Item 1. Financial Statements This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, changes in equity, and cash flows, with detailed notes Consolidated Balance Sheets This section provides a snapshot of the company's financial position at specific points in time, detailing assets, liabilities, and equity Consolidated Balance Sheet Highlights (March 31, 2022 vs. December 31, 2021) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | | Total assets | $4,758,497 | $4,863,854 | $(105,357) | | Total liabilities | $3,997,502 | $3,739,754 | $257,748 | | Total equity | $760,995 | $1,124,100 | $(363,105) | | Cash and cash equivalents | $145,266 | $188,078 | $(42,812) | | Restricted cash | $214,401 | $251,983 | $(37,582) | | Leasing equipment, net | $1,901,960 | $1,891,649 | $10,311 | | Property, plant, and equipment, net | $1,587,291 | $1,555,857 | $31,434 | | Debt, net | $3,399,367 | $3,220,211 | $179,156 | Consolidated Statements of Operations This section details the company's revenues, expenses, and net loss over specific periods, reflecting operational performance Consolidated Statements of Operations Highlights (Three Months Ended March 31, 2022 vs. 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :------------------------------------- | :------------------ | :------------------ | :-------------------- | | Total revenues | $137,839 | $77,149 | $60,690 | | Total expenses | $356,484 | $114,507 | $241,977 | | Net loss | $(229,659) | $(34,876) | $(194,783) | | Net loss attributable to shareholders | $(228,984) | $(34,540) | $(194,444) | | Basic loss per share | $(2.30) | $(0.40) | $(1.90) | | Diluted loss per share | $(2.30) | $(0.40) | $(1.90) | - Total revenues increased by $60.7 million, primarily driven by higher revenues in the Transtar segment ($34.1 million) and Aviation Leasing segment ($28.9 million)[187] - Total expenses increased by $242.0 million, mainly due to higher asset impairment charges ($120.7 million), operating expenses ($83.9 million), interest expense ($17.6 million), and depreciation and amortization ($13.8 million)[191] Consolidated Statements of Comprehensive Loss This section presents the net loss and other comprehensive income/loss items, providing a complete view of changes in equity from non-owner sources Consolidated Statements of Comprehensive Loss Highlights (Three Months Ended March 31, 2022 vs. 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :------------------------------------------ | :------------------ | :------------------ | :-------------------- | | Net loss | $(229,659) | $(34,876) | $(194,783) | | Other comprehensive (loss) income related to equity method investees, net | $(94,779) | $9,954 | $(104,733) | | Comprehensive loss | $(324,438) | $(24,922) | $(299,516) | | Comprehensive loss attributable to shareholders | $(316,972) | $(19,961) | $(297,011) | Consolidated Statement of Changes in Equity This section outlines the changes in the company's equity components over a period, including net loss, accumulated deficit, and dividends Consolidated Statement of Changes in Equity Highlights (Three Months Ended March 31, 2022) | Equity Component | December 31, 2021 (in thousands) | March 31, 2022 (in thousands) | Change (in thousands) | | :----------------------------------- | :----------------------------- | :---------------------------- | :-------------------- | | Total Equity | $1,124,100 | $760,995 | $(363,105) | | Accumulated deficit | $(132,392) | $(354,585) | $(222,193) | | Accumulated other comprehensive loss | $(156,381) | $(251,160) | $(94,779) | | Dividends declared - common shares | N/A | $(32,749) | $(32,749) | | Dividends declared - preferred shares | N/A | $(6,791) | $(6,791) | Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities, illustrating liquidity changes Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, 2022 vs. 2021) | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :-------------------------------------- | :------------------ | :------------------ | :-------------------- | | Net cash provided by (used in) operating activities | $1,923 | $(48,932) | $50,855 | | Net cash used in investing activities | $(228,127) | $(154,418) | $(73,709) | | Net cash provided by financing activities | $145,810 | $235,408 | $(89,598) | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(80,394) | $32,058 | $(112,452) | - Net cash provided by operating activities increased by $50.9 million, primarily due to adjustments for asset impairment, bad debt expense, and equity in losses of unconsolidated entities, partially offset by an increased net loss[236] - Net cash used in investing activities increased by $73.7 million, driven by higher acquisitions of leasing equipment and property, plant and equipment, partially offset by increased proceeds from asset sales[237] - Net cash provided by financing activities decreased by $89.6 million, mainly due to increased debt repayments and decreased proceeds from preferred share issuance, partially offset by higher proceeds from new debt[238] Notes to Consolidated Financial Statements This section provides detailed explanations and supplementary information for the consolidated financial statements, clarifying accounting policies and specific line items Note 1: Organization Fortress Transportation and Infrastructure Investors LLC operates through its subsidiary, Fortress Worldwide Transportation and Infrastructure General Partnership, owning and leasing aviation equipment and operating various infrastructure assets across four reportable segments - The Company operates in two primary businesses: Equipment Leasing (Aviation Leasing) and Infrastructure (Jefferson Terminal, Ports and