Fortress Transportation and Infrastructure Investors LLC
(NYSE:FTAI) (the “Company” or “FTAI”) today reported financial
results for the quarter and full year ended December 31, 2019. The
Company’s consolidated comparative 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 |
Q4’19 |
|
FY19 |
|
Net Cash
Provided by Operating Activities |
$ |
58,330 |
|
|
$ |
151,043 |
|
Net Income Attributable to Shareholders |
$ |
183,647 |
|
|
$ |
223,270 |
|
Basic and Diluted Earnings per Common Share |
$ |
2.13 |
|
|
$ |
2.59 |
|
|
|
|
|
|
Funds Available for Distribution (“FAD”) (1) |
$ |
288,618 |
|
|
$ |
566,436 |
|
Adjusted EBITDA(1) |
$ |
233,954 |
|
|
$ |
503,408 |
|
________________________________ |
(1) |
For
definitions and reconciliations of non-GAAP measures, please refer
to the exhibit to this press release. |
For the fourth quarter of 2019, total FAD was
$288.6 million. This amount includes $174.2 million from our
aviation leasing portfolio, and $167.2 million from our
infrastructure business, offset by $(52.8) million from corporate
and other.
Joe Adams, FTAI’s CEO, stated, “Our fourth
quarter was exceptional, as was all of 2019. 2020 is setting
up to be even better.”
Fourth Quarter 2019
Dividends
On February 27, 2020, 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 December 31, 2019,
payable on March 24, 2020 to the holders of record on March 13,
2020.
Additionally, on February 27, 2020, the Board
declared cash dividends on its Fixed-to-Floating Rate Series A
Cumulative Perpetual Redeemable Preferred Shares (“Series A
Preferred Shares”) and Fixed-to-Floating Rate Series B Cumulative
Perpetual Redeemable Preferred Shares (“Series B Preferred Shares”)
of $0.51563 and $0.60000 per share, respectively, for the quarter
ended December 31, 2019, payable on March 16, 2020 to the
holders of record on March 9, 2020.
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 Annual Report
on Form 10-K, 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, February 28, 2020 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
2019 Fourth 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, February 28,
2020 through midnight Friday, March 6, 2020 at 1-855-859-2056 (from
within the U.S.) or 1-404-537-3406 (from outside of the U.S.),
Passcode: 3473034.
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 fiscal year 2020. 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 the Series A Preferred and Series B
Preferred dividends declared in February 2020 will be treated as a
partnership distribution and guaranteed payments,
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) |
$ |
0.02000 |
|
U.S. Dividend Income(2) |
$ |
— |
|
Income Not from U.S.
Sources(3) |
$ |
— |
|
U.S. Long Term Capital Gain
(4) |
$ |
0.31000 |
|
Distribution Per Share |
$ |
0.33000 |
|
Series A Preferred Distribution Components |
|
Guaranteed Payments(5) |
$ |
0.51563 |
|
Distribution Per Share |
$ |
0.51563 |
|
Series B Preferred Distribution Components |
|
Guaranteed Payments(5) |
$ |
0.60000 |
|
Distribution Per Share |
$ |
0.60000 |
|
(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) |
U.S. Long
Term Capital Gain attributable to the sale of a U.S. Real Property
Holding Corporation. As a result, the gain will be treated as
income that is effectively connected with a U.S. trade or business
and be subject to withholding. |
(5) |
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, except per share
data)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues |
|
|
|
|
|
|
|
Equipment leasing
revenues |
$ |
110,411 |
|
|
$ |
67,035 |
|
|
$ |
349,322 |
|
|
$ |
253,039 |
|
Infrastructure revenues |
50,921 |
|
|
61,617 |
|
|
229,452 |
|
|
89,073 |
|
Total revenues |
161,332 |
|
|
128,652 |
|
|
578,774 |
|
|
342,112 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Operating expenses |
67,267 |
|
|
63,022 |
|
|
288,036 |
|
|
136,570 |
|
General and
administrative |
5,128 |
|
|
4,955 |
|
|
20,441 |
|
|
17,126 |
|
Acquisition and transaction
expenses |
8,498 |
|
|
2,234 |
|
|
17,623 |
|
|
6,968 |
|
Management fees and incentive
allocation to affiliate |
19,133 |
|
|
3,646 |
|
|
36,059 |
|
|
15,726 |
|
Depreciation and
amortization |
44,843 |
|
|
38,793 |
|
|
169,023 |
|
|
133,908 |
|
Interest expense |
24,267 |
|
|
17,694 |
|
|
95,585 |
|
|
56,845 |
|
Total expenses |
169,136 |
|
|
130,344 |
|
|
626,767 |
|
|
367,143 |
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
Equity in losses of
unconsolidated entities |
(848 |
) |
|
(410 |
) |
|
(2,375 |
) |
|
(1,008 |
) |
Gain (loss) on sale of assets,
net |
141,850 |
|
|
(1,287 |
) |
|
203,250 |
|
|
3,911 |
|
Asset impairment |
(4,726 |
) |
|
— |
|
|
(4,726 |
) |
|
— |
|
Interest income |
79 |
|
|
127 |
|
|
531 |
|
|
488 |
|
Other (expense) income |
(20 |
) |
|
1,909 |
|
|
3,445 |
|
|
3,983 |
|
Total other income |
136,335 |
|
|
339 |
|
|
200,125 |
|
|
7,374 |
|
Income (loss) from
continuing operations before income taxes |
128,531 |
|
|
(1,353 |
) |
|
152,132 |
|
|
(17,657 |
) |
Provision for income
taxes |
18,999 |
|
|
869 |
|
|
17,810 |
|
|
2,449 |
|
Net income (loss) from continuing operations |
109,532 |
|
|
(2,222 |
) |
|
134,322 |
|
|
(20,106 |
) |
Net income from discontinued operations, net of income taxes |
71,579 |
|
|
1,577 |
|
|
73,462 |
|
|
4,402 |
|
Net income
(loss) |
181,111 |
|
|
(645 |
) |
|
207,784 |
|
|
(15,704 |
) |
Less: Net income (loss)
attributable to non-controlling interests in consolidated
subsidiaries: |
|
|
|
|
|
|
|
Continuing operations |
(4,520 |
) |
|
(1,790 |
) |
|
(17,571 |
) |
|
(21,925 |
) |
Discontinued operations |
146 |
|
|
108 |
|
|
247 |
|
|
339 |
|
Dividends on preferred
shares |
1,838 |
|
|
— |
|
|
1,838 |
|
|
— |
|
Net income
attributable to shareholders |
$ |
183,647 |
|
|
$ |
1,037 |
|
|
$ |
223,270 |
|
|
$ |
5,882 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
Continuing operations |
$ |
1.30 |
|
|
$ |
(0.01 |
) |
|
$ |
1.74 |
|
|
$ |
0.02 |
|
Discontinued operations |
$ |
0.83 |
|
|
$ |
0.02 |
|
|
$ |
0.85 |
|
|
$ |
0.05 |
|
Diluted |
|
|
|
|
|
|
|
Continuing operations |
$ |
1.30 |
|
|
$ |
(0.01 |
) |
|
$ |
1.74 |
|
|
$ |
0.02 |
|
Discontinued operations |
$ |
0.83 |
|
|
$ |
0.02 |
|
|
$ |
0.85 |
|
|
$ |
0.05 |
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
Basic |
85,997,619 |
|
|
85,065,125 |
|
|
85,992,019 |
|
|
83,654,068 |
|
Diluted |
86,090,207 |
|
|
85,068,966 |
|
|
86,029,363 |
|
|
83,664,833 |
|
FORTRESS TRANSPORTATION AND
INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED BALANCE SHEETS
(Unaudited)(Dollar amounts in thousands, except per share
data)
|
|
December 31, |
|
|
2019 |
|
2018 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
226,512 |
|
|
$ |
99,601 |
|
Restricted cash |
|
16,005 |
|
|
21,236 |
|
Accounts receivable, net |
|
49,470 |
|
|
46,414 |
|
Leasing equipment, net |
|
1,707,059 |
|
|
1,432,210 |
|
Operating lease right-of-use
assets, net |
|
37,466 |
|
|
— |
|
Finance leases, net |
|
8,315 |
|
|
18,623 |
|
Property, plant, and
equipment, net |
|
732,109 |
|
|
662,019 |
|
Investments |
|
180,550 |
|
|
40,560 |
|
Intangible assets, net |
|
27,692 |
|
|
38,498 |
|
Goodwill |
|
122,639 |
|
|
115,990 |
|
Other assets |
|
129,105 |
|
|
106,883 |
|
Assets of discontinued
operations |
|
— |
|
|
56,744 |
|
Total assets |
|
$ |
3,236,922 |
|
|
$ |
2,638,778 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
144,855 |
|
|
$ |
100,668 |
|
Debt, net |
|
1,420,928 |
|
|
1,215,108 |
|
Maintenance deposits |
|
208,944 |
|
|
158,163 |
|
Security deposits |
|
45,252 |
|
|
38,539 |
|
Operating lease
liabilities |
|
36,968 |
|
|
— |
|
Other liabilities |
|
41,118 |
|
|
37,055 |
|
Liabilities of discontinued
operations |
|
— |
|
|
35,463 |
|
Total liabilities |
|
$ |
1,898,065 |
|
|
$ |
1,584,996 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Common shares ($0.01 par value
per share; 2,000,000,000 shares authorized; 84,917,448 and
84,050,889 shares issued and outstanding as of December 31, 2019
and 2018, respectively) |
|
$ |
849 |
|
|
$ |
840 |
|
Preferred shares ($0.01 par
value per share; 200,000,000 shares authorized; 8,050,000 and 0
shares issued and outstanding as of December 31, 2019 and 2018,
respectively) |
|
81 |
|
|
— |
|
Additional paid in
capital |
|
1,110,122 |
|
|
1,029,376 |
|
Retained earnings (accumulated
deficit) |
|
190,453 |
|
|
(32,817 |
) |
Accumulated other
comprehensive income |
|
372 |
|
|
— |
|
Shareholders' equity |
|
1,301,877 |
|
|
997,399 |
|
Non-controlling interest in
equity of consolidated subsidiaries |
|
36,980 |
|
|
56,383 |
|
Total equity |
|
$ |
1,338,857 |
|
|
$ |
1,053,782 |
|
Total liabilities and
equity |
|
$ |
3,236,922 |
|
|
$ |
2,638,778 |
|
FORTRESS TRANSPORTATION AND
INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(Dollar amounts in thousands, unless otherwise
noted)
|
Year Ended December 31, |
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
207,784 |
|
|
$ |
(15,704 |
) |
Adjustments to reconcile net
income (loss) to cash provided by operating activities: |
|
|
|
Equity in losses of
unconsolidated entities |
2,375 |
|
|
1,008 |
|
Gain on sale of
subsidiaries |
(198,764 |
) |
|
— |
|
Gain on sale of assets,
net |
(81,954 |
) |
|
(3,911 |
) |
Security deposits and
maintenance claims included in earnings |
(20,385 |
) |
|
(6,323 |
) |
Equity-based compensation |
8,404 |
|
|
901 |
|
Depreciation and
amortization |
171,225 |
|
|
136,354 |
|
Asset impairment |
4,726 |
|
|
— |
|
Change in current and deferred
income taxes |
14,495 |
|
|
649 |
|
Change in fair value of
non-hedge derivatives |
4,555 |
|
|
(5,523 |
) |
Amortization of lease
intangibles and incentives |
30,162 |
|
|
26,659 |
|
Amortization of deferred
financing costs |
8,333 |
|
|
5,430 |
|
Bad debt expense |
3,986 |
|
|
1,771 |
|
Other |
827 |
|
|
(4 |
) |
Change in: |
|
|
|
Accounts receivable |
(22,622 |
) |
|
(23,340 |
) |
Other assets |
(17,890 |
) |
|
(26,212 |
) |
Accounts payable and accrued liabilities |
31,543 |
|
|
30,471 |
|
Management fees payable to affiliate |
19,080 |
|
|
1,820 |
|
Other liabilities |
(14,837 |
) |
|
9,651 |
|
Net cash provided by
operating activities |
151,043 |
|
|
133,697 |
|
|
|
|
|
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 |
13,398 |
|
|
1,981 |
|
Acquisition of leasing
equipment |
(568,569 |
) |
|
(497,988 |
) |
Acquisition of property, plant
and equipment |
(331,171 |
) |
|
(229,963 |
) |
Acquisition of lease
intangibles |
606 |
|
|
(11,396 |
) |
Acquisition of remaining
interest in JV investment |
(28,828 |
) |
|
— |
|
Purchase deposit for aircraft
and aircraft engines |
(1,000 |
) |
|
(10,150 |
) |
Proceeds from sale of
subsidiaries |
183,819 |
|
|
— |
|
Proceeds from sale of leasing
equipment |
248,454 |
|
|
44,062 |
|
Proceeds from sale of
property, plant and equipment |
— |
|
|
23 |
|
Proceeds from deposit on sale
of leasing equipment |
— |
|
|
240 |
|
Return of deposit on sale of
leasing equipment |
— |
|
|
(400 |
) |
Return of capital
distributions from unconsolidated entities |
1,555 |
|
|
2,085 |
|
Net cash used in
investing activities |
$ |
(495,236 |
) |
|
$ |
(703,533 |
) |
FORTRESS TRANSPORTATION AND
INFRASTRUCTURE INVESTORS LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(Dollar amounts in thousands)
|
Year Ended December 31, |
|
2019 |
|
2018 |
Cash flows from
financing activities: |
|
|
|
Proceeds from debt |
$ |
788,829 |
|
|
$ |
750,980 |
|
Repayment of debt |
(405,131 |
) |
|
(218,819 |
) |
Payment of deferred financing
costs |
(34,218 |
) |
|
(3,055 |
) |
Receipt of security
deposits |
7,887 |
|
|
9,264 |
|
Return of security
deposits |
(368 |
) |
|
(1,775 |
) |
Receipt of maintenance
deposits |
65,279 |
|
|
53,645 |
|
Release of maintenance
deposits |
(26,940 |
) |
|
(25,582 |
) |
Proceeds from issuance of
common shares, net of underwriter's discount |
— |
|
|
148,318 |
|
Common shares issuance
costs |
— |
|
|
(820 |
) |
Proceeds from issuance of
preferred shares, net of underwriter's discount and issuance
costs |
193,992 |
|
|
— |
|
Settlement of equity-based
compensation |
(8,078 |
) |
|
— |
|
Purchase of non-controlling
interest shares |
— |
|
|
(3,705 |
) |
Cash dividends - common
shares |
(113,541 |
) |
|
(110,584 |
) |
Cash dividends - preferred
shares |
(1,838 |
) |
|
— |
|
Net cash provided by
financing activities |
465,873 |
|
|
597,867 |
|
|
|
|
|
Net increase in cash
and cash equivalents and restricted cash |
121,680 |
|
|
28,031 |
|
Cash and cash equivalents and
restricted cash, beginning of period |
120,837 |
|
|
92,806 |
|
Cash and cash
equivalents and restricted cash, end of period |
$ |
242,517 |
|
|
$ |
120,837 |
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for interest, net of
capitalized interest |
$ |
83,164 |
|
|
$ |
43,636 |
|
Cash paid for taxes |
1,072 |
|
|
721 |
|
|
|
|
|
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 (losses) attributable to shareholders from continuing
operations, adjusted (a) to exclude the impact of provision for
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 months and years ended December 31, 2019 and
December 31, 2018:
|
Three Months
Ended December 31, |
|
Year Ended
December 31, |
(in thousands) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income (loss) attributable to shareholders from
continuing operations |
$ |
112,214 |
|
|
$ |
(432 |
) |
|
$ |
150,055 |
|
|
$ |
1,819 |
|
Add: Provision for income taxes |
18,999 |
|
|
869 |
|
|
17,810 |
|
|
2,449 |
|
Add: Equity-based compensation expense |
343 |
|
|
186 |
|
|
1,509 |
|
|
717 |
|
Add: Acquisition and transaction expenses |
8,498 |
|
|
2,234 |
|
|
17,623 |
|
|
6,968 |
|
Add: Losses on the modification or extinguishment of debt and
capital lease obligations |
— |
|
|
— |
|
|
— |
|
|
— |
|
Add: Changes in fair value of non-hedge derivative instruments |
425 |
|
|
(6,090 |
) |
|
4,555 |
|
|
(5,523 |
) |
Add: Asset impairment charges |
4,726 |
|
|
— |
|
|
4,726 |
|
|
— |
|
Add: Incentive allocations |
15,122 |
|
|
(146 |
) |
|
21,231 |
|
|
407 |
|
Add: Depreciation and amortization expense (1) |
50,997 |
|
|
47,823 |
|
|
199,185 |
|
|
160,567 |
|
Add: Interest expense |
24,267 |
|
|
17,694 |
|
|
95,585 |
|
|
56,845 |
|
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities
(2) |
(492 |
) |
|
(27 |
) |
|
(1,387 |
) |
|
359 |
|
Less: Equity in losses of unconsolidated entities |
848 |
|
|
410 |
|
|
2,375 |
|
|
1,008 |
|
Less: Non-controlling share of Adjusted EBITDA (3) |
(1,993 |
) |
|
(726 |
) |
|
(9,859 |
) |
|
(9,744 |
) |
Adjusted EBITDA
(non-GAAP) |
$ |
233,954 |
|
|
$ |
61,795 |
|
|
$ |
503,408 |
|
|
$ |
215,872 |
|
________________________________________________________
(1) |
Includes the following items for the three months ended
December 31, 2019 and 2018: (i) depreciation and amortization
expense of $44,843 and $38,793, (ii) lease intangible amortization
of $1,445 and $2,675 and (iii) amortization for lease incentives of
$4,709 and $6,355, respectively. |
|
Includes
the following items for the years ended December 31, 2019 and
2018: (i) depreciation and amortization expense of $169,023 and
$133,908, (ii) lease intangible amortization of $7,181 and $8,588
and (iii) amortization for lease incentives of $22,981 and $18,071,
respectively. |
(2) |
Includes
the following items for the three months ended December 31,
2019 and 2018: (i) net loss of $(770) and $(463),
(ii) interest expense of $30 and $174 and
(iii) depreciation and amortization expense of $248 and $262,
respectively. |
|
Includes
the following items for the years ended December 31, 2019 and
2018: (i) net loss of $(2,563) and $(1,196),
(ii) interest expense of $131 and $477 and
(iii) depreciation and amortization expense of $1,045 and
$1,078, respectively. |
(3) |
Includes
the following items for the three months ended December 31,
2019 and 2018: (i) equity based compensation of $54 and $25, (ii)
provision for income taxes of $22 and $47, (iii) interest expense
of $642 and $844, (iv) depreciation and amortization expense of
$1,200 and $1,058 and (v) changes in fair value of non-hedge
derivative instruments of $75 and $(1,248), respectively. |
|
Includes
the following items for the years ended December 31, 2019 and
2018: (i) equity based compensation of $230 and $113, (ii)
provision for income taxes of $60 and $57, (iii) interest expense
of $3,400 and $4,624, (iv) depreciation and amortization expense of
$4,833 and $6,049 and (v) changes in fair value of non-hedge
derivative instruments of $1,336 and $(1,099), respectively. |
The Company uses Funds Available for
Distribution (“FAD”) in evaluating its ability to meet its 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. The Company believes FAD is a
useful metric for investors and analysts for similar purposes.
The Company defines 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 excluding changes in working capital.
The following table sets forth a reconciliation
of Net Cash Provided by Operating Activities to FAD for the years
ended December 31, 2019 and 2018:
|
Year Ended December 31, |
(in thousands) |
2019 |
|
2018 |
Net Cash Provided by
Operating Activities |
$ |
151,043 |
|
|
$ |
133,697 |
|
Add: Principal Collections on Finance Leases |
13,398 |
|
|
1,981 |
|
Add: Proceeds from Sale of Assets |
432,273 |
|
|
44,085 |
|
Add: Return of Capital Distributions from Unconsolidated
Entities |
1,555 |
|
|
2,085 |
|
Less: Required Payments on Debt Obligations (1) |
(36,559 |
) |
|
(7,793 |
) |
Less: Capital Distributions to Non-Controlling Interest |
— |
|
|
— |
|
Exclude: Changes in Working Capital |
4,726 |
|
|
7,610 |
|
Funds Available for
Distribution (FAD) |
$ |
566,436 |
|
|
$ |
181,665 |
|
_____________________________________________________
(1) |
Required payments on debt obligations for the year ended
December 31, 2019 exclude repayments of $350,000 for the
Revolving Credit Facility and $18,572 for the CMQR Credit
Agreement, and for the year ended December 31, 2018 exclude
repayments of $175,000 for the Revolving Credit Facility and
$36,026 for the CMQR Credit Agreement. |
The following tables set forth a reconciliation of Net Cash
Provided by Operating Activities to FAD for the three months ended
and year ended December 31, 2019:
|
Three Months
Ended December 31, 2019 |
(in thousands) |
Equipment Leasing |
|
Infrastructure |
|
Corporate and Other |
|
Total |
Funds Available for Distribution (FAD) |
$ |
174,173 |
|
|
$ |
167,289 |
|
|
$ |
(52,844 |
) |
|
$ |
288,618 |
|
Less: Principal Collections on Finance Leases |
|
|
|
|
|
|
(304 |
) |
Less: Proceeds from Sale of Assets |
|
|
|
|
|
|
(265,976 |
) |
Less: Return of Capital Distributions from Unconsolidated
Entities |
|
|
|
|
|
|
(131 |
) |
Add: Required Payments on Debt Obligations |
|
|
|
|
|
|
7,046 |
|
Add: Capital Distributions to Non-Controlling Interest |
|
|
|
|
|
|
— |
|
Include: Changes in Working Capital |
|
|
|
|
|
|
29,077 |
|
Net Cash Provided by Operating Activities |
|
|
|
|
|
|
$ |
58,330 |
|
|
Year Ended
December 31, 2019 |
(in thousands) |
Equipment Leasing |
|
Infrastructure |
|
Corporate and Other |
|
Total |
Funds Available for Distribution (FAD) |
$ |
587,810 |
|
|
$ |
122,165 |
|
|
$ |
(143,539 |
) |
|
$ |
566,436 |
|
Less: Principal Collections on Finance Leases |
|
|
|
|
|
|
(13,398 |
) |
Less: Proceeds from Sale of Assets |
|
|
|
|
|
|
(432,273 |
) |
Less: Return of Capital Distributions from Unconsolidated
Entities |
|
|
|
|
|
|
(1,555 |
) |
Add: Required Payments on Debt Obligations |
|
|
|
|
|
|
36,559 |
|
Add: Capital Distributions to Non-Controlling Interest |
|
|
|
|
|
|
— |
|
Include: Changes in Working Capital |
|
|
|
|
|
|
(4,726 |
) |
Net Cash Provided by Operating Activities |
|
|
|
|
|
|
$ |
151,043 |
|
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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