FTAI Aviation Ltd.

Good day and thank you for standing by. Welcome to the FTIE Aviation Third Quarter 2025 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 1-1 on your telephone. You will then hear automated messages writing your hand as raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is pre-recorded. I would like to hand the conference over to your first speaker today, Alan Nadrini, Head of Investor Relations. Please go ahead.

Thank you, Marvin. I would like to welcome you all to the FTIA Aviation Third Quarter 2025 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 a 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. Angela will provide a detailed overview of the numbers, but first I'd like to highlight a few key updates. Number one, we passed a significant milestone this month with a successful close on the final round of equity commitments for SCI, which is Strategic Capital Initiative number one. We've had tremendous interest from institutional investors in the partnership throughout the year, And given this high level of demand, we have upsized the total equity capital of the 2025 partnership to $2 billion. FTIE will co-invest up to approximately $380 million, including the $152 million we have invested year-to-date for a 19% minority equity interest compared to our original expectation of 20%. With a $500 million increase in equity capital, our new target is now to deploy over $6 billion in capital through the 2025 partnership up from our previous target of $4 billion and double the original goal of $3 billion we announced in December of last year when we launched SCI. This expanded partnership corresponds to a larger total portfolio size of approximately 375 aircraft with full deployment of capital now anticipated by mid-2026. Today, we now have 190 aircraft either closed or under LOI commitment and continue to have confidence and visibility from the SCI investments team on sourcing the remaining aircraft through a combination of lessor counterparties and direct sale leaseback transactions with airlines. The successful $6 billion launch of this partnership creates significant value and positions FTIE for sustained long-term earnings growth. The MRA agreement, which provides fixed price exchanges for all engines in the SCI portfolio, establishes a multi-year contractual pipeline of demand for rebuilt engines within our aerospace product segment. Additionally, our role as servicer and 19% minority equity investment is expected to generate attractive returns within our aviation leasing segment. For our equity partners, SCI represents a compelling opportunity of enhanced returns relative to the traditional leasing business model. Through the MRE, or maintenance repair exchange agreement, LPs benefit from higher, more predictable cash flows combined with lower residual risk across a highly diversified lessee pool. For our airline counterparties, engine exchanges also provide clear, meaningful value by eliminating the financial and operational risk and burden of managing engine shop visits. With this significant value proposition to all parties, FTIE, our equity LP partners, and airlines, we see strong opportunities, opportunity to launch additional SCI partnerships each year going forward. Turning now to Q3 results, aerospace products delivered another strong performance, generating $180 million in adjusted EBITDA at a 35% margin, up approximately 77% year over year. This positive momentum underscores the strong accelerating global demand for pre-built engines and modules in the CFM56 and V2500 aftermarket. We continue to see adoption of our aerospace products expanding across both new and existing customers, supplemented by our MRE agreement with the SEI. Airline operators and asset owners increasingly recognize FTI as the most flexible, cost-efficient alternative to traditional shop visits, which are more expensive, more complex, and more time-consuming than a simple and cost-effective exchange with FTI. A recent example of this is Finnair, with whom we announced a multi-year perpetual power program. Through our scale, asset ownership, and extensive in-house maintenance capabilities, FTI's engine exchanges help Finnair manage their maintenance costs, improve reliability, and ultimately deliver a better service to their passengers. The trend toward longer-term partnerships like Finnair is increasing, and we expect to announce additional new airline perpetual power programs in the future. Overall, we're confident our differentiated business model and competitive advantage places FTI to be the long-term leader in engine aftermarket maintenance for these engine types. We're well positioned to achieve our goal of reaching 25% market share in the years ahead. Moving over to production, we refurbished 207 CFM56 modules this quarter between our three facilities in Montreal, Miami, and Rome. an increase of 13% versus the last quarter. And we remain on track for our goal of producing 750 modules in 2020-25. In Montreal, our recently established training academy has also already enrolled over 100 trainees who are graduating significantly faster than traditional methods, thanks to our technology-driven approach using virtual reality and AI technology protocols. Combined with our emphasis on specialization and operational efficiencies, these initiatives are delivering measurable improvements in throughput and productivity. We remain confident in the trajectory of substantial production growth ahead as we scale the Montreal facility to capacity. In Rome, our operations continue to develop at an impressive pace. We have successfully integrated FTIE's MRE operations with the facility and technicians from Roam have conducted extensive training seminars at our Montreal Training Academy to improve skill development and optimize production efficiency. We're also actively investing in upgrading Roam's infrastructure and component repair capability, enabling heavier and more complex module repairs, which will position us to ramp production next year to double our 2025 target. We're also pleased to announce agreement to acquire ATOPs for approximately $15 million, an MRO with extensive CFM56 engine operations, strengthening our presence in Miami. This acquisition will transform our Miami MRE operations by complementing our nearby module and test cell facilities, adding expansion space and adding experienced technical staff to support increased production next year once the integration into our operation is complete. Additionally, the purchase includes an ATOPs facility in Portugal, which will serve as a logistics and field service hub in coordination with our European operations in Rome. We've also made good progress in expanding our component repair capabilities through the launch of a 50-50 joint venture called Prime Engine Accessories with Bauer, Inc., out of Bristol, Connecticut. The Bauer team brings tremendous experience and expertise in accessory test equipment, and together we're building an industry-leading MRE repair facility for accessory parts. Once operational, which we expect by the end of this year, this facility is expected to deliver up to $75,000 in average savings per shop visit. Our initial $10 million working capital investment will enable us to redirect FTI volumes to this facility rather than to outside vendors, driving meaningful cost efficiencies and time savings. This investment, like Pacific Arrow, which we did last quarter, further differentiates our offering and aids us in both expanding productivity and expanding margins. With a substantial activity in enhancing our facilities and the broader MRE ecosystem, we are now targeting growth in production next year to 1,000 CFM56 modules, an increase of 33% compared to this year's production. We also continue to expect aerospace products margins to grow to 40% plus next year as we optimize our parts procurement and repair strategies, including the approval of PMA part number three, which we continue to expect approval of in the very near term. Next, let's talk about adjusted free cash flow. In the third quarter, we generated $268 million, which includes $88 million from the sale of the final eight aircraft from the 45 aircraft seed portfolio, which were sold to SCI-1. Year to date, we have now generated $638 million in positive free cash flow, positioning us on track to our revised goal of $750 million for all of 2025 prior to our expanded contribution to SCI number one. As FTIE pivots to an asset-light model focused on aerospace products and strategic capital, we continue to expect substantial growth in free cash flow in the years ahead, Our primary use for available cash is to pursue investments in high impact growth initiatives, and we're seeing today a significant number of these opportunities and possibilities. FTIE's targeted discipline approach is to identify opportunities complementary to our MRE operations in areas where we can accelerate production, expand margins, and further differentiate our product offerings to customers worldwide. We do expect surplus cash balance above these investment opportunities and therefore we are announcing an increase to the dividend this quarter from 30 cents per quarter to 35 cents per share. The dividend of 35 cents per share will be paid on November 19th based on a shareholder record date of November 10th. This marks our 42nd dividend as a public company and our 57th consecutive dividend since inception. Additionally, we will also continue to evaluate future opportunities for capital redistribution to shareholders. And finally, we remain confident in our full-year 2025 estimates of $1.25 to $1.3 billion business segment EBITDA for all of 2025, comprised of aerospace products EBITDA ranging from $650 to $700 million and aviation leasing EBITDA of $600 million. Looking ahead to 2026, for aerospace products, we're estimating $1 billion in EBITDA for next year, which represents significant further growth versus the $650 to $700 million this year, and approximately $380 million, which we generated just recently in 2024. For aviation leasing, we're estimating $525 million in EBITDA in 2026, which is in line with our expected results for 2025, excluding insurance recoveries and gains on sale. Within the leasing segment, we estimate the growth in servicing fees and our 19% minority equity investment will offset the decline in on-balance sheet leasing revenues from the seed portfolio sold to the SEI as we continue to pivot to an asset-like growth model. Overall, we now anticipate total business segment EBITDA in 2026 of $1.525 billion, up from our original estimate of $1.4 billion. Based on these projections, we expect to generate $1 billion in adjusted free cash flow next year, representing a 33% increase over the $750 million we are targeting in 2025 prior to our expanded contribution to SCI-1. With that, I'll hand it over to Angela to talk through the numbers in more detail.