FTAI Aviation Ltd.

Good day, and thank you for standing by. Welcome to the Q2 2023 FTAI Aviation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to introduce your host for today's call, Alan Andrini, Head of Investor Relations. Please go ahead.

Thank you, Justin. I would like to welcome you all to the FTIA Aviation Second Quarter 2023 Earnings Call. Joining me here today are Joe Adams, our Chief Executive Officer, and Angela Nam, our Chief Financial Officer. We have posted an investor presentation in 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 was opened 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 EBITDA. The reconciliation of those measures to the most directly comparable GAAP measures can be found in the earnings 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.

Thank you, Alan. To start today, I'm pleased to announce our 33rd dividend as a public company and our 48th consecutive dividend since inception. The dividend of 30 cents per share will be paid on August 29th based on the shareholder record date of August 14th. Now let's turn to the numbers. The key metrics for us are adjusted EBITDA. We had another strong quarter with adjusted EBITDA of 153.1 million in Q2 of 2023, which is up 20% compared to 127.7 million in Q1 of 2023, and up 2% compared to 150.7 million in Q2 of 2022, where we had over 64 million of gains on sale in that quarter. During the first quarter, the 153.1 million EBITDA number was comprised of 125.9 million from our leasing segment and 30.1 million from our aerospace product segment and negative 2.8 million from corporate and other. Turning now to leasing. Leasing had a great quarter, posting approximately 126 million of EBITDA. The pure leasing component of the 126 million came in at 94 million for Q2 versus $91 million in Q1 of 2023. With strong demand for assets and the peak of the Northern Hemisphere summer season, we expect Q3 will grow incrementally. Additionally, on the acquisition side, we closed on 15 aircraft and 23 engines at very attractive prices, which will contribute to further growth in future leasing EBITDA. We remain confident in leasing EBITDA of 350 million to 400 million for the year, excluding gains on asset sales. Part of the 126 million in EBITDA for leasing came from gains on asset sales. We sold 69.6 million book value assets at a 31% margin gain of 31.9 million, benefiting from strong demand for assets globally. We have more asset sales coming in the remainder of the year, and continue to be comfortable assuming gains on asset sales of approximately $25 million per quarter or $100 million for all of 2023. Aerospace Products had yet another excellent quarter with $30 million of EBITDA at an overall EBITDA margin of 44%. We sold 37 modules in Q2 to nine unique customers comprised of three new customers and six repeat customers. We see tremendous potential and continue to feel good about generating 20 to 30 million in quarterly EBITDA and think 100 million plus in 2023 EBITDA remains very doable. We feel confident about this number because we're seeing an expanding backlog of aerospace products business with leasing companies, MROs or maintenance and repair and overhaul organizations, and airlines. With that, I will turn the call back to Alan.