Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) Q3 2019 Earnings Conference Call - Final Transcript

Nov 01, 2019 • 08:00 am ET


Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Fortress Transportation and Infrastructure Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to turn the call over to your conference speaker today, Alan Andreini. Please go ahead, sir.

Alan Andreini

Thank you. I would like to welcome all of you to the Fortress Transportation Infrastructure third quarter 2019 earnings call. Joining me here today are Joe Adams, our Chief Executive Officer; and Scott Christopher, our Chief Financial Officer. We have posted an investor presentation and our press release on our website, which we encourage you to download if you have not already done so. Also, please note that this call is open to the public in listen-only mode and is being webcast.

In addition, we will be discussing some non-GAAP financial measures during the call today, including FAD. The reconciliations of those measures to the most directly comparable GAAP measures can be found in the earning supplement.

Before I turn the call over to Joe, I would like to point out that certain statements made today will be forward-looking statements, including regarding future earnings. These statements by their nature are uncertain and may differ materially from actual results. We encourage you to review the disclaimers in our press release and investor presentation regarding non-GAAP financial measures and forward-looking statements and to review the risk factors contained in our quarterly report filed with the SEC.

Now, I would like to turn the call over to Joe.

Joseph P. Adams Jr.

Thank you, Alan. To start the call, I'm pleased to announce our 18th dividend as a public company and our 33rd consecutive dividend since inception. The dividend of $0.33 per share will be paid on November 26 based on shareholder record date of November 15. The key metrics for us are adjusted EBITDA and FAD or funds available for distribution. Adjusted EBITDA for Q3 2019 was $114.1 million compared to Q2 of 2019 of $94.1 million and Q3 of 2018 of $58.8 million.

FAD was $120.7 million in Q3 versus $86.9 million in Q2 of 2019 and $44.7 million in Q3 of 2018. During the third quarter, the $120.7 million FAD number was comprised of $185.7 million from our aviation leasing portfolio, minus $32.1 million from infrastructure, which includes a one-time revolver paydown of $23 million, which happened in this quarter, and negative $32.9 million from corporate and other.

Now let's turn to Aviation. In Q3, Aviation hit on all cylinders. Strong asset utilization drove record EBITDA, excluding gains, of $89.7 million or $358.8 million annualized, up from $324 million in Q2. Second, the sale of 21 engines and five aircraft with a book value of $57.7 million produced gains of $37 million. And thirdly, our attractive new investment pipeline will allow us to generate continued growth in Q4 of this year