FTAI Aviation Ltd.

Good day and welcome to the Q4 2023 FTAI Aviation Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this call is being recorded. I would like to hand the call over to Alan Andrini, Investor Relations. You may begin.

Thank you, Michelle. I would like to welcome you all to the FTAI fourth quarter and full year 2023 earnings call. Joining me here today are Joe Adams, our Chief Executive Officer, Angela Nam, our Chief Financial Officer, and David Marino, our Chief Operating 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 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 annual 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 35th dividend as a public company and our 50th consecutive dividend since inception. The dividend of 30 cents per share will be paid on March 20, based on a sharehold record date of March 8. Now let's turn to the numbers. The key metric for us is adjusted EBITDA. We ended the year strongly with adjusted EBITDA of $162.3 million in Q4 2023, which is up just over 5% compared to $154.2 million in Q3 2023, and up 31% compared to 123.5 million in Q4 of 2022. During the fourth quarter, the 162.3 million EBITDA number was comprised of 121.8 million from our leasing segment, 54.6 million from our aerospace product segment, and negative 14.1 million from corporate and other. Now let's look at all of 2023 versus all of 2022. Adjusted EBITDA was $597.3 million in 2023, up 40% versus $428.1 million in 2022. Turning now to leasing, leasing had another good quarter, posting approximately $122 million of EBITDA. The pure leasing component of $122 million of EBITDA came in at $99 million for Q4 versus $102 million in Q3. Additionally, on the acquisition side, we acquired at attractive prices $229 million in new equipment comprised of 10 aircrafts and 33 engines, which will contribute to further growth in future leasing EBITDA. We're very comfortable in producing approximately $425 million of leasing EBITDA for 2024, excluding projected gains on asset sales of approximately $50 million. Part of the $122 million in EBITDA for leasing came from gains on asset sales. We sold 33.5 million book value of assets at a 40% margin for a gain of $22.7 million in the quarter, benefiting from exceptionally strong demand globally for our portfolio of assets. We remain comfortable assuming gains on asset sales continuing at approximately $12.5 million per quarter or 50 million for all of 2024. Aerospace products had yet another excellent quarter with 54.6 million of EBITDA and an overall EBITDA margin of 34%. We sold 61 modules in Q4 to 17 unique customers comprised of six new customers and 11 repeat customers. We see tremendous potential in aerospace products and feel good about generating EBITDA for 2024 towards the middle or higher end of the $200 million to $250 million range. We continue to expect strong growth in aerospace products as customers experience the clear benefits of our MRE products and programs. We are both expanding the number of customers and the usage per customer at an accelerating pace. We are very pleased with the introduction, acceptance of, and demand for our second focus engine, the V2500. With this, we have the ability to become the leading full-service aftermarket power provider for all 737NG and A320neo aircraft globally. Overall, looking ahead, we continue to expect our annual aviation EBITDA for 2024 to be between $675 million to $725 million, not including corporate and other. With that, I will turn the call back to Alan.