FTAI Aviation Ltd. Q4 FY2023 earnings call

• Announced 35th dividend as public company and 50th consecutive dividend. • Adjusted EBITDA ended 2023 strongly. • Leasing segment had good quarter, acquired new equipment, sold assets at 40% margin. • Aerospace Products had excellent quarter with 34% EBITDA margin, sold modules to new and repeat customers, and sees potential in V2500 engine. • Expect annual aviation EBITDA for 2024 between $675M to $725M excluding corporate and other.

In Q4 2023, adjusted EBITDA was $162.3 million. The Leasing segment contributed $121.8 million, Aerospace Products contributed $54.6 million, and Corporate and Other had a negative $14.1 million. For 2023, adjusted EBITDA was $597.3 million, up 40% from 2022. Leasing had $122 million EBITDA in Q4, with $99 million from pure leasing, acquired $229 million in new equipment (10 aircrafts and 33 engines) and expects ~$425 million EBITDA in 2024 excluding ~$50 million asset sale gains. Aerospace Products had $54.6 million EBITDA in Q4 with a 34% margin, sold 61 modules to 17 unique customers, and expects $200-250 million EBITDA in 2024.

• Expect 2024 annual aviation EBITDA between $675M to $725M excluding corporate and other. • Leasing expects ~$425 million EBITDA in 2024 excluding ~$50 million asset sale gains. • Aerospace Products expects EBITDA for 2024 towards the middle or higher end of $200M to $250M range.

• Lease terminations of aircrafts by Bamboo Airlines impacted Q4 and Q1 2024 revenue. • Uncertainty in PMA approval timing for V2500. • FAA production cap on MAX affecting lease rent dynamics. • Potential impact of asset availability and maintenance needs on leasing business.

Q: On the leasing portion, what drove the sequential decline in revenue?

A: Termination of four A320s on lease to Bamboo Airlines in Q3, which were off leased in Q4 and Q1, affecting ~$5 million per quarter EBITDA.

Q: How about market response for lease rents after FAA MAX production cap?

A: Lease rates for CFM56 engines are up to $75,000 plus maintenance reserves, and the MAX production cap extends supply-demand imbalance.

Q: Update on V2500 MRE program?

A: Progressing well, have 15 engines in maintenance shops, close on large fleet deal for V2500 engines, expects $25 million EBITDA contribution from V2500 in 2024.

Q: PMA initiative update?

A: Great progress, but FAA approval process is rigorous.

Q: Cash position and working capital needs?

A: $90 million cash, $300 million undrawn on revolvers, $200 million LOIs in pipeline, no significant near-term issues.

Q: Well intervention vessels?

A: Pioneer vessel on hire since December, Pride vessel in repair until March, expect both on hire by second quarter, aiming to sell both this year.

Q: 2025 notes due?

A: Notes due in October 2025, monitoring market for refinancing or payment.