FTAI Aviation Ltd.

Hello, and welcome to FTIA Aviation fourth quarter 2024 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. I would now like to turn the conference over to Alan Andrini, Head of Investor Relations. You may begin.

Thank you, Tawanda. I would like to welcome you all to the FTIA Aviation fourth quarter and full year 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 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. I'm pleased today to announce our 39th dividend as a public company and our 54th consecutive dividend since inception. The dividend of 30 cents per share will be paid on March 24, based on a shareholder record date of March 14. I'd also like to start today by talking about the investor presentation posted to our website. While I'm not going to go slide by slide, We wanted to speak to our market opportunity, the value proposition, scalability, and durability of our aerospace products business. Starting with the market opportunity, if you look at the total number of operators, the majority of our target customers are small and medium-sized airlines, which have narrow-body fleets powered by CFM56 and V2500 engines, our focus engines. They represent approximately 600 operators worldwide, and 80% of the number of all these engines flown, which creates a large and fragmented addressable market of $22 billion of annual maintenance spend, where FTI focuses and can provide significant value to the customer. We offer these customers a lower fixed price with minimal downtime product compared to what our competitors do. This is made possible through our unique maintenance capabilities and expertise, and a large owned engine fleet. Central to our maintenance approach is green time optimization, which is how we rebuild modules and engines that require repair. Unlike traditional MROs, FTIE leverages in-house engineering and maintenance capabilities to extract every available cycle from each module. Our scale enables us to optimize module deployment or combine modules to build right-sized engines for our customers. You can see a typical example that we detailed on slide 13 in the presentation. But let me take a moment now to explain the process in a little more detail. The CFM56 engine, it consists of three modules, the fan, the core, and the low pressure turbine, or otherwise called the LPT. Engine maintenance is needed when one of these modules hits their life limit. When this occurs, usually the other two modules still have remaining life. And the key to our green time optimization strategy is to acquire and dismantle unserviceable engines, refurbish the viable modules, and sell them individually or reassemble them into right size engines for customers. And a right size engine is one where the various modules, three modules, all have a similar remaining useful life. Performing module maintenance at scale, in addition to owning the engine throughout the repair cycle, creates significant cost savings opportunities. This allows us to offer significant benefits to customers compared to a traditional shop visit, while also generating higher margins than typical MROs. We see a bright future ahead in our unique role in the aftermarket, supported by significant investments we made in 2024, as well as the announcements we made yesterday regarding the new facility, maintenance facility in Rome and our strategic capital initiative, which we call SCI, to accelerate our market share and help sustainably support airlines in their long-term maintenance needs. Our new joint venture agreement with IAG Engine Center Europe, which will be rebranded as Quick Turn Europe, complements our existing facilities in Montreal and Miami and will help address the strong demand for FTIE's MRE, or maintenance, repair, and exchange services from our global customer base in a critical geographic location. Secondly, we were excited to announce yesterday that the SCI has received $2.5 billion commitment for asset-level debt financing from Atlas, which is a majority-owned subsidiary of Apollo and Deutsche Bank. The SCI team is currently in the late stages of closing a second round of equity financing, and we believe the market opportunity to deploy capital-raised in these SPVs in this way is in the region of more than $4 billion annually. Turning out to adjusted free cash flow, in 2024, we generated approximately 670 million from business operations, which included 140 million related to the sale of both of our offshore vessels. At the same time, we invested approximately 1.3 billion in major growth initiatives which range from the purchase of the Montreal maintenance facility, the termination of the management agreement with Fortress, and investments in aviation assets, in particular engines and parts, to support our growth strategy in 2025 and beyond. Overall, we feel more confident in our annual business segment EBITDA for 2025 to be between 1.1 and 1.15 billion, excluding corporate and other. We're also expecting adjusted free cash flow of approximately $650 million in 2025, which is broken out in more detail on slide 24. We will continue to make strategic reinvestments in the business. However, the launch of our strategic capital initiative will reduce our capital asset acquisition needs in 2025 and beyond. So while we will continue to prioritize growth opportunities, we will also consider capital redistribution to shareholders. Finally, as we look at our current pipeline, we now expect our annual aviation EBITDA to rise from our previously projected $1.25 billion to be approximately now $1.4 billion in 2026. With that, I'll hand it over to Angela to talk through the numbers in more detail.