FTAI Aviation Ltd.

Good day, and thank you for standing by. Welcome to the FTIA Aviation First Quarter 2024 Earnings Conference Call. At this time, all participants are in 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 hand the conference over to your speaker today, Alan Andreini, Investor Relations. Please go ahead.

Thank you, Shannon. I would like to welcome you all to the FTIA Aviation First Quarter 2024 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 supplements. 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 presentations 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 36th dividend as a public company and our 51st consecutive dividend since inception. The dividend of 30 cents per share will be paid on May 21, based on a shareholder record date of May 10. Now let's turn to the numbers. The key metric for us is adjusted EBITDA. We began the year strongly with adjusted EBITDA of $164.1 million in Q1 2024, which is up 1% compared to $162.3 million in Q4 2023 and up 29% compared to $127.7 million in Q1 of 2023. During the first quarter, The 164.1 million EBITDA number was comprised of 104.8 million from our leasing segment, 70.3 million from our aerospace product segment, and negative 11 from corporate and other. Turning now to leasing, leasing had another good quarter, hosting approximately 105 million of EBITDA. The pure leasing component of the 105 million came in at $98 million for Q1 versus $99 million of Q4 of last year. With exceptionally strong demand for assets and the commencement of the Northern Hemisphere summer season, we expect meaningful growth in Q2. We remain very confident in leasing EBITDA of $425 million for the year, excluding gains on asset sales. Part of the $105 million in EBITDA for leasing came from gains on asset sales. We sold 31.9 million book value of assets for a gain of 6.7 million, slightly below our expectations, but we have more asset sales coming in Q2 and the rest of the year and are comfortable assuming gains on asset sales of approximately 12.5 million per quarter or 50 million for all of 2024. Aerospace products had yet another excellent quarter with 70.3 million of EBITDA at an overall EBITDA margin of 37%. We sold 72 CFM56 modules in Q1 to 16 unique customers. Additionally, we sold six V2500 engines in Q1 to three customers through our recently launched V2500 engine program. We continue to see the tremendous potential in aerospace products and are comfortable that we will generate approximately 250 million in EBITDA in 2024. the high end of our previous range. Our maintain, repair, and exchange, or MRE model, for the two most widely used engines in commercial aviation produces cost savings and operational flexibility for airlines and aircraft lessors by allowing them to avoid shop visits through engine or module exchanges. Our recently executed perpetual power agreement with LATAM covering over 60 V2500 and CFM56 engines, illustrates the growing acceptance of airlines and lessors to outsource this activity to FTI Aviation. Overall, looking ahead, we continue to expect our annual aviation EBITDA for 2024 to be approximately $725 million, not including corporate and other. With that, I'll turn the call back to Alan.