FTAI Aviation Ltd.

Hello and welcome to FTIA Aviation third quarter 2023 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 the question during this 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. I would now like to hand the conference over to Alan Andreni, Investor Relations. Sir, you may begin.

Thank you, Tawanda. I would like to welcome you all to the FTIA Aviation Third Quarter 2023 Earnings Call. Joining me here today are Joe Adams, our Chief Executive Officer, and Angela Naum, 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. 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 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 the 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 34th dividend as a public company and our 49th consecutive dividend since inception. The dividend of $0.30 per share will be paid on November 28th based on a shareholder record date of November 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 $154.2 million in Q3 2023. which is up 1% compared to 153.1 million in Q2 of 2023, and up 42% compared to 108.9 million in Q3 2022. During the third quarter, the 154.2 million EBITDA number was comprised of 119.6 million from our leasing segment, 40.6 million from our aerospace product segment, and negative 6 million from corporate and others. Turning now to leasing, leasing had another good quarter posting approximately $120 million of EBITDA. The pure leasing component of the $120 million of EBITDA came in at $102 million for Q3 versus $94 million in Q2. Additionally, on the acquisition side, we closed on 10 aircraft and 23 engines at attractive prices, which will contribute to further growth in future leasing EBITDA. Part of the $120 million in EBITDA for leasing came from gains on asset sales. We sold 55.4 million book value of assets at a 24% margin for a gain of $17.6 million, benefiting from strong demand for assets globally. And we've had more asset sales coming in the final quarter of this year. Aerospace Products had yet another excellent quarter with $40.6 million of EBITDA at an overall EBITDA margin of 38%. We sold 41 modules in Q3 to 11 unique customers comprised of two new customers and nine repeat customers. We see tremendous potential in aerospace products and feel very good about generating consistent EBITDA growth. As to the balance of 2023, we see FTI coming in above the high end of the $550 to $600 million EBITDA range, which we communicated at the beginning of 2023. Looking ahead to 2024, our current expectation is for leasing EBITDA to total $475 million for the year, including $50 million from gains on asset sales. Based on a strong backlog and an expanding customer base, we are looking for $250 to $250 million of aerospace product EBITDA in 2024, up from $98 million year-to-date 2023 and $70 million in 2022. Overall, we therefore expect annual aviation EBITDA for 2024 to be between $675 to $725 million, not including corporate and other. With that, I'll turn the call back to Alan. Thank you, Joe.