Fortress Transportation and Infrastructure Investors LLC
(NYSE:FTAI) (the “Company”) today reported financial results for
the three months ended September 30, 2019. The Company’s
consolidated 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
Results |
Q3’19 |
|
|
Net Cash Provided by Operating Activities |
$ |
34,601 |
|
|
Net Income Attributable to Shareholders |
$ |
25,671 |
|
|
Basic and Diluted Earnings per Common Share |
$ |
0.30 |
|
|
|
|
|
|
Funds Available for Distribution (“FAD”) (1) |
$ |
120,741 |
|
|
Adjusted EBITDA(1) |
$ |
114,142 |
|
|
________________________________(1) For
definitions and reconciliations of Non-GAAP measures, please refer
to the exhibit to this press release.
For the third quarter of 2019, our total FAD was
$120.7 million. This amount includes $185.7 million from aviation
leasing activities, offset by $(32.0) million and $(32.9) million
from infrastructure and corporate and other activities,
respectively.
“We just put up record numbers in both net
income and adjusted EBITDA,” said Joe Adams, FTAI’s CEO. “We
see this momentum in profitability and cash flow continuing into
2020.”
Third Quarter Cash
Dividends
On October 31, 2019, 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 September 30, 2019,
payable on November 26, 2019 to the holders of record on November
15, 2019.
On October 31, 2019, the Board also declared a
cash dividend on its Fixed-to-Floating Rate Series A Cumulative
Perpetual Redeemable Preferred Shares of $0.53281 per share for the
quarter ended September 30, 2019, payable on December 16, 2019 to
the holders of record on December 2, 2019.
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 Quarterly
Report on Form 10-Q, 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, November 1, 2019 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
Third 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, November 1, 2019
through 10:00 A.M. Friday, November 8, 2019 at 1-855-859-2056 (from
within the U.S.) or 1-404-537-3406 (from outside of the U.S.),
Passcode: 3777558.
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 the Company’s continued
profitability and cash flow momentum. 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 AndreiniInvestor RelationsFortress
Transportation and Infrastructure Investors LLC(212)
798-6128aandreini@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 Series A preferred dividend declared in
October 2019 will be treated as a partnership distribution and
guaranteed payment, 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) |
$ |
0.14500 |
|
U.S. Dividend Income(2) |
$ |
— |
|
Income Not from U.S.
Sources(3) |
$ |
0.18500 |
|
Distribution Per Share |
$ |
0.33000 |
|
Series A Preferred Distribution Components |
|
Guaranteed Payments(4) |
$ |
0.53281 |
|
Distribution Per Share |
$ |
0.53281 |
|
(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) 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, unless otherwise
noted)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues |
|
|
|
|
|
|
|
|
Equipment leasing
revenues |
|
$ |
87,259 |
|
|
$ |
70,890 |
|
|
$ |
238,911 |
|
|
$ |
186,004 |
|
|
Infrastructure revenues |
|
74,962 |
|
|
30,265 |
|
|
206,942 |
|
|
55,974 |
|
|
Total revenues |
|
162,221 |
|
|
101,155 |
|
|
445,853 |
|
|
241,978 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Operating expenses |
|
89,368 |
|
|
41,667 |
|
|
244,049 |
|
|
96,839 |
|
|
General and
administrative |
|
6,284 |
|
|
4,012 |
|
|
15,313 |
|
|
12,171 |
|
|
Acquisition and transaction
expenses |
|
5,618 |
|
|
1,460 |
|
|
9,400 |
|
|
4,734 |
|
|
Management fees and incentive
allocation to affiliate |
|
7,378 |
|
|
3,846 |
|
|
16,926 |
|
|
12,080 |
|
|
Depreciation and
amortization |
|
43,744 |
|
|
34,422 |
|
|
125,877 |
|
|
96,853 |
|
|
Interest expense |
|
25,488 |
|
|
15,142 |
|
|
72,263 |
|
|
39,870 |
|
|
Total expenses |
|
177,880 |
|
|
100,549 |
|
|
483,828 |
|
|
262,547 |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
Equity in losses of
unconsolidated entities |
|
(974 |
) |
|
(442 |
) |
|
(1,527 |
) |
|
(598 |
) |
|
Gain on sale of equipment,
net |
|
37,061 |
|
|
262 |
|
|
61,416 |
|
|
5,253 |
|
|
Interest income |
|
121 |
|
|
111 |
|
|
452 |
|
|
361 |
|
|
Other income |
|
1,131 |
|
|
737 |
|
|
3,465 |
|
|
2,074 |
|
|
Total other income |
|
37,339 |
|
|
668 |
|
|
63,806 |
|
|
7,090 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
21,680 |
|
|
1,274 |
|
|
25,831 |
|
|
(13,479 |
) |
|
Provision for (benefit from)
income taxes |
|
1,004 |
|
|
551 |
|
|
(842 |
) |
|
1,580 |
|
|
Net income
(loss) |
|
20,676 |
|
|
723 |
|
|
26,673 |
|
|
(15,059 |
) |
|
Less: Net loss attributable to
non-controlling interests in consolidated subsidiaries |
|
(4,995 |
) |
|
(3,855 |
) |
|
(12,950 |
) |
|
(19,904 |
) |
|
Net income
attributable to shareholders |
|
$ |
25,671 |
|
|
$ |
4,578 |
|
|
$ |
39,623 |
|
|
$ |
4,845 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.30 |
|
|
$ |
0.05 |
|
|
$ |
0.46 |
|
|
$ |
0.06 |
|
|
Diluted |
|
$ |
0.30 |
|
|
$ |
0.05 |
|
|
$ |
0.46 |
|
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
85,996,067 |
|
|
84,708,071 |
|
|
85,990,131 |
|
|
83,178,546 |
|
|
Diluted |
|
86,005,604 |
|
|
84,709,656 |
|
|
86,013,539 |
|
|
83,179,181 |
|
|
FORTRESS TRANSPORTATION AND
INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, unless otherwise
noted)
|
|
(Unaudited) |
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
99,343 |
|
|
$ |
99,601 |
|
Restricted cash |
|
51,241 |
|
|
21,236 |
|
Accounts receivable, net |
|
61,970 |
|
|
53,789 |
|
Leasing equipment, net |
|
1,498,679 |
|
|
1,432,210 |
|
Operating lease right-of-use
assets, net |
|
42,590 |
|
|
— |
|
Finance leases, net |
|
8,620 |
|
|
18,623 |
|
Property, plant, and
equipment, net |
|
945,052 |
|
|
708,853 |
|
Investments |
|
51,109 |
|
|
40,560 |
|
Intangible assets, net |
|
30,182 |
|
|
38,513 |
|
Goodwill |
|
116,584 |
|
|
116,584 |
|
Other assets |
|
229,643 |
|
|
108,809 |
|
Total assets |
|
$ |
3,135,013 |
|
|
$ |
2,638,778 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
135,155 |
|
|
$ |
112,188 |
|
Debt, net |
|
1,582,262 |
|
|
1,237,347 |
|
Maintenance deposits |
|
197,989 |
|
|
158,163 |
|
Security deposits |
|
42,761 |
|
|
38,539 |
|
Operating lease
liabilities |
|
43,036 |
|
|
— |
|
Other liabilities |
|
28,158 |
|
|
38,759 |
|
Total liabilities |
|
$ |
2,029,361 |
|
|
$ |
1,584,996 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Common shares ($0.01 par value
per share; 2,000,000,000 shares authorized; 84,903,138 and
84,050,889 shares issued and outstanding as of September 30, 2019
and December 31, 2018, respectively) |
|
$ |
849 |
|
|
$ |
840 |
|
Preferred shares ($0.01 par
value per share; 3,450,000 shares authorized; 3,450,000 and 0
shares issued and outstanding as of September 30, 2019 and December
31, 2018, respectively) |
|
35 |
|
|
— |
|
Additional paid in
capital |
|
1,027,451 |
|
|
1,029,376 |
|
Retained earnings (accumulated
deficit) |
|
6,806 |
|
|
(32,817 |
) |
Accumulated other
comprehensive income |
|
25,474 |
|
|
— |
|
Shareholders' equity |
|
1,060,615 |
|
|
997,399 |
|
Non-controlling interest in
equity of consolidated subsidiaries |
|
45,037 |
|
|
56,383 |
|
Total equity |
|
1,105,652 |
|
|
1,053,782 |
|
Total liabilities and
equity |
|
$ |
3,135,013 |
|
|
$ |
2,638,778 |
|
FORTRESS TRANSPORTATION AND
INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands, unless otherwise
noted)
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
26,673 |
|
|
$ |
(15,059 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
Equity in losses of
unconsolidated entities |
1,527 |
|
|
598 |
|
Gain on sale of equipment,
net |
(61,416 |
) |
|
(5,253 |
) |
Security deposits and
maintenance claims included in earnings |
(3,863 |
) |
|
(4,325 |
) |
Equity-based compensation |
1,604 |
|
|
669 |
|
Depreciation and
amortization |
125,877 |
|
|
96,853 |
|
Change in current and deferred
income taxes |
(1,906 |
) |
|
670 |
|
Change in fair value of
non-hedge derivative |
4,130 |
|
|
567 |
|
Amortization of lease
intangibles and incentives |
24,008 |
|
|
17,629 |
|
Amortization of deferred
financing costs |
5,995 |
|
|
4,164 |
|
Bad debt expense |
3,139 |
|
|
1,586 |
|
Other |
748 |
|
|
51 |
|
Change in: |
|
|
|
Accounts receivable |
(16,002 |
) |
|
(19,024 |
) |
Other assets |
(15,128 |
) |
|
(10,891 |
) |
Accounts payable and accrued liabilities |
2,101 |
|
|
15,198 |
|
Management fees payable to affiliate |
8,961 |
|
|
(774 |
) |
Other liabilities |
(13,735 |
) |
|
3,756 |
|
Net cash provided by
operating activities |
92,713 |
|
|
86,415 |
|
|
|
|
|
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 leases |
13,094 |
|
|
658 |
|
Acquisition of leasing
equipment |
(287,508 |
) |
|
(330,492 |
) |
Acquisition of property, plant
and equipment |
(243,707 |
) |
|
(178,555 |
) |
Acquisition of lease
intangibles |
(101 |
) |
|
(5,039 |
) |
Purchase deposits for
acquisitions |
(45,852 |
) |
|
(17,350 |
) |
Proceeds from sale of leasing
equipment |
166,290 |
|
|
30,409 |
|
Proceeds from sale of
property, plant and equipment |
7 |
|
|
78 |
|
Return of capital
distributions from unconsolidated entities |
1,424 |
|
|
872 |
|
Return of purchase deposit for
aircraft and aircraft engines |
— |
|
|
240 |
|
Return of deposit on sale of
engine |
— |
|
|
(400 |
) |
Net cash used in
investing activities |
$ |
(409,853 |
) |
|
$ |
(501,606 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds from debt |
$ |
568,704 |
|
|
$ |
615,239 |
|
Repayment of debt |
(218,934 |
) |
|
(181,856 |
) |
Payment of deferred financing
costs |
(31,585 |
) |
|
(2,686 |
) |
Receipt of security
deposits |
5,802 |
|
|
7,084 |
|
Return of security
deposits |
(368 |
) |
|
(1,520 |
) |
Receipt of maintenance
deposits |
49,356 |
|
|
41,808 |
|
Release of maintenance
deposits |
(23,822 |
) |
|
(11,518 |
) |
Proceeds from issuance of
common shares, net of underwriter's discount |
— |
|
|
128,451 |
|
Common shares issuance
costs |
— |
|
|
(789 |
) |
Proceeds from issuance of
preferred shares, net of underwriter's discount and issuance
costs |
82,888 |
|
|
— |
|
Purchase of non-controlling
interest |
— |
|
|
(3,705 |
) |
Cash dividends - common
shares |
(85,154 |
) |
|
(82,623 |
) |
Net cash provided by
financing activities |
$ |
346,887 |
|
|
$ |
507,885 |
|
|
|
|
|
Net increase in cash
and cash equivalents and restricted cash |
29,747 |
|
|
92,694 |
|
Cash and cash equivalents and
restricted cash, beginning of period |
120,837 |
|
|
92,806 |
|
Cash and cash
equivalents and restricted cash, end of period |
$ |
150,584 |
|
|
$ |
185,500 |
|
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 attributable to shareholders, adjusted (a) to exclude
the impact of provision for (benefit from) 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 and nine months ended September 30, 2019 and 2018:
|
Three Months Ended September 30, |
|
Change |
|
Nine Months Ended September 30, |
|
Change |
(in thousands) |
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
Net income
attributable to shareholders |
$ |
25,671 |
|
|
$ |
4,578 |
|
|
$ |
21,093 |
|
|
$ |
39,623 |
|
|
$ |
4,845 |
|
|
$ |
34,778 |
|
Add: Provision for (benefit
from) income taxes |
1,004 |
|
|
551 |
|
|
453 |
|
|
(842 |
) |
|
1,580 |
|
|
(2,422 |
) |
Add: Equity-based compensation
expense |
676 |
|
|
232 |
|
|
444 |
|
|
1,604 |
|
|
669 |
|
|
935 |
|
Add: Acquisition and
transaction expenses |
5,618 |
|
|
1,460 |
|
|
4,158 |
|
|
9,400 |
|
|
4,734 |
|
|
4,666 |
|
Add: Losses on the
modification or extinguishment of debt and capital lease
obligations |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Add: Changes in fair value of
non-hedge derivative instruments |
4,380 |
|
|
385 |
|
|
3,995 |
|
|
4,130 |
|
|
567 |
|
|
3,563 |
|
Add: Asset impairment
charges |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Add: Incentive
allocations |
3,736 |
|
|
(20 |
) |
|
3,756 |
|
|
6,109 |
|
|
553 |
|
|
5,556 |
|
Add: Depreciation and
amortization expense (1) |
50,464 |
|
|
39,162 |
|
|
11,302 |
|
|
149,885 |
|
|
114,482 |
|
|
35,403 |
|
Add: Interest expense |
25,488 |
|
|
15,142 |
|
|
10,346 |
|
|
72,263 |
|
|
39,870 |
|
|
32,393 |
|
Add: Pro-rata share of
Adjusted EBITDA from unconsolidated entities (2) |
(801 |
) |
|
402 |
|
|
(1,203 |
) |
|
(895 |
) |
|
385 |
|
|
(1,280 |
) |
Less: Equity in losses of
unconsolidated entities |
974 |
|
|
442 |
|
|
532 |
|
|
1,527 |
|
|
598 |
|
|
929 |
|
Less: Non-controlling share of
Adjusted EBITDA (3) |
(3,068 |
) |
|
(3,563 |
) |
|
495 |
|
|
(8,242 |
) |
|
(9,175 |
) |
|
933 |
|
Adjusted EBITDA
(non-GAAP) |
$ |
114,142 |
|
|
$ |
58,771 |
|
|
$ |
55,371 |
|
|
$ |
274,562 |
|
|
$ |
159,108 |
|
|
$ |
115,454 |
|
________________________________________________________
(1) Includes the following items for the three
months ended September 30, 2019 and 2018: (i) depreciation and
amortization expense of $43,744 and $34,422, (ii) lease intangible
amortization of $1,072 and $1,911 and (iii) amortization for lease
incentives of $5,648 and $2,829, respectively. Includes the
following items for the nine months ended September 30, 2019
and 2018: (i) depreciation and amortization expense of $125,877 and
$96,853, (ii) lease intangible amortization of $5,736 and $5,913
and (iii) amortization for lease incentives of $18,272 and $11,716,
respectively.
(2) Includes the following items for the three
months ended September 30, 2019 and 2018: (i) net loss of
$(1,096) and $(483), (ii) interest expense of $30 and $97 and
(iii) depreciation and amortization expense of $265 and $788,
respectively. Includes the following items for the nine months
ended September 30, 2019 and 2018: (i) net loss of $(1,793)
and $(734), (ii) interest expense of $101 and $303 and
(iii) depreciation and amortization expense of $797 and $816,
respectively.
(3) Includes the following items for the three
months ended September 30, 2019 and 2018: (i) equity based
compensation of $85 and $19, (ii) provision for income taxes of $27
and $2, (iii) interest expense of $846 and $1,512, (iv)
depreciation and amortization expense of $1,325 and $1,809, and (v)
changes in fair value of non-hedge derivative instruments of $785
and $221, respectively. Includes the following items for the nine
months ended September 30, 2019 and 2018: (i) equity based
compensation of $220 and $96, (ii) provision for income taxes of
$73 and $10, (iii) interest expense of $2,854 and $3,823, (iv)
depreciation and amortization expense of $3,834 and $5,097 and (v)
changes in fair value of non-hedge derivative instruments of $1,261
and $149, respectively.
We use Funds Available for Distribution (“FAD”)
in evaluating our ability to meet our 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. We believe FAD is a useful metric for
investors and analysts for similar purposes.
We define 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 excludes
changes in working capital.
The following table sets forth a reconciliation
of Net Cash Provided by Operating Activities to FAD for the nine
months ended September 30, 2019 and 2018:
|
Nine Months Ended September 30, |
(in thousands) |
2019 |
|
2018 |
Net Cash Provided by
Operating Activities |
$ |
92,713 |
|
|
$ |
86,415 |
|
Add: Principal Collections on
Finance Leases |
13,094 |
|
|
658 |
|
Add: Proceeds from Sale of
Assets |
166,297 |
|
|
30,487 |
|
Add: Return of Capital
Distributions from Unconsolidated Entities |
1,424 |
|
|
872 |
|
Less: Required Payments on
Debt Obligations (1) |
(29,513 |
) |
|
(6,231 |
) |
Less: Capital Distributions to
Non-Controlling Interest |
— |
|
|
— |
|
Exclude: Changes in Working
Capital |
33,803 |
|
|
11,735 |
|
Funds Available for
Distribution (FAD) |
$ |
277,818 |
|
|
$ |
123,936 |
|
________________________________________________________
(1) Required payments on debt obligations for
the nine months ended September 30, 2019 exclude repayments of
$175,000 for the Revolving Credit Facility and $14,421 for the
Central Maine & Québec Railway (“CMQR”) Credit Agreement, and
for the nine months ended September 30, 2018 exclude
repayments of $150,000 for the Revolving Credit Facility and
$25,625 for the CMQR Credit Agreement, all of which were voluntary
refinancings as repayments of these amounts were not required at
such time.
The following tables set forth a reconciliation
of FAD to Net Cash provided by Operating Activities for the three
and nine months ended September 30, 2019:
|
Three Months Ended September 30, 2019 |
(in thousands) |
Aviation Leasing |
|
Infrastructure |
|
Corporate and Other |
|
Total |
Funds Available for Distribution (FAD) |
$ |
185,679 |
|
|
$ |
(32,000 |
) |
|
|
$ |
(32,938 |
) |
|
$ |
120,741 |
|
|
Less: Principal Collections on Finance Leases |
|
|
|
|
|
|
(10,098 |
|
) |
Less: Proceeds from Sale of Assets |
|
|
|
|
|
|
(94,793 |
|
) |
Less: Return of Capital Distributions from Unconsolidated
Entities |
|
|
|
|
|
|
(144 |
) |
|
Add: Required Payments on Debt Obligations (1) |
|
|
|
|
|
|
26,388 |
|
|
Add: Capital Distributions to Non-Controlling Interest |
|
|
|
|
|
|
— |
|
|
Include: Changes in Working Capital |
|
|
|
|
|
|
(7,493 |
|
) |
Net Cash provided by Operating Activities |
|
|
|
|
|
|
$ |
34,601 |
|
|
(1) Required payments on debt obligations for
the three months ended September 30, 2019 exclude repayments of
$60,000 for the Revolving Credit Facility and $3,711 for the CMQR
Credit Agreement, both of which were voluntary refinancings as
repayments of these amounts were not required at such time.
|
Nine Months Ended September 30, 2019 |
(in thousands) |
Aviation Leasing |
|
Infrastructure |
|
Corporate and Other |
|
Total |
Funds Available for Distribution (FAD) |
$ |
413,637 |
|
|
$ |
(46,179 |
) |
|
|
$ |
(89,640 |
) |
|
$ |
277,818 |
|
|
Less: Principal Collections on Finance Leases |
|
|
|
|
|
|
(13,094 |
|
) |
Less: Proceeds from Sale of Assets |
|
|
|
|
|
|
(166,297 |
|
) |
Less: Return of Capital Distributions from Unconsolidated
Entities |
|
|
|
|
|
|
(1,424 |
) |
|
Add: Required Payments on Debt Obligations (2) |
|
|
|
|
|
|
29,513 |
|
|
Add: Capital Distributions to Non-Controlling Interest |
|
|
|
|
|
|
— |
|
|
Include: Changes in Working Capital |
|
|
|
|
|
|
(33,803 |
|
) |
Net Cash provided by Operating Activities |
|
|
|
|
|
|
$ |
92,713 |
|
|
(2) Required payments on debt obligations for
the nine months ended September 30, 2019 exclude repayments of
$175,000 for the Revolving Credit Facility and $14,421 for the CMQR
Credit Agreement, both of which were voluntary refinancings as
repayments of these amounts were not required at such time.
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.
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