FTAI Aviation Ltd 8-K/A, filed Sep 8, 2021

FTAI Aviation Ltd. (FTAI)

8-K/A 2021-09-08 For: 2021-07-28

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Added on April 05, 2026

About this 8-K/A

FTAI Aviation Ltd filed this 8-K/A on September 8, 2021, reporting on events of July 28, 2021.

Items reported

Item 9.01: Financial statements and exhibits

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Delaware	001-37386	32-0434238
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common shares, $0.01 par value per share	FTAI	New York Stock Exchange

8.25% Fixed-to-Floating Rate Series A Cumulative Perpetual Redeemable Preferred Shares	FTAI PR A	New York Stock Exchange

8.00% Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares	FTAI PR B	New York Stock Exchange

8.25% Fixed Rate Series C Cumulative Perpetual Redeemable Preferred Shares	FTAI PR C	New York Stock Exchange

Exhibit No.	Description

23.1	Consent of Ernst & Young LLP.
99.1	Audited consolidated financial statements of Transtar and the related notes thereto for the year ended December 31, 2020 and unaudited consolidated financial statements of Transtar as of and for the six months ended June 30, 2021.
99.2	Unaudited pro forma condensed combined financial information of the Company, which includes the unaudited pro forma condensed combined balance sheet as of June 30, 2021, the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2021 and the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020.
99.3	Unaudited supplemental non-GAAP financial information.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

By:	/s/ Eun Nam
	Name:	Eun Nam
	Title:	Chief Accounting Officer

	As of June 30, 2021 (unaudited)		As of December 31, 2020
ASSETS
Current assets
Cash and cash equivalents	$	433	$	748
Investment in affiliate		354,653		525,117
Accounts receivable, net		9,202		11,656
Prepaids and other current assets		2,768		3,306
Due from affiliates		11,491		10,905
Total current assets		378,547		551,732

Property and equipment, net		136,149		137,943
Operating lease right of use assets		11,722		12,567
Other assets		5,987		5,710

Total assets	$	532,405	$	707,952

LIABILITIES & MEMBER’S EQUITY
Current liabilities
Accounts payable		33,437		27,182
Payroll and benefits liabilities		6,236		5,315
Accrued taxes and other current liabilities		1,874		2,853
Operating lease liabilities		2,315		2,320
Finance lease liabilities		840		702
Due to affiliates		878		798
Note payable to affiliate		-		5,845
Total current liabilities		45,580		45,015
Non-current liabilities

Operating lease liabilities		9,283		10,320
Finance lease liabilities		1,425		1,600
Deferred income tax liabilities		15,320		15,320
Other liabilities		10,720		9,852
Total non-current liabilities		36,748		37,092
Total liabilities		82,328		82,107
Member’s equity
Total member’s equity		450,077		625,845
Total liabilities and member’s equity	$	532,405	$	707,952

	Year Ended December 31, 2020
Revenues
Revenues from affiliates	$	93,586
Revenues from unrelated parties		21,596
Total revenues		115,182
Operating expenses
Cost of sales		52,907
Depreciation expense		9,357
Selling, general and administrative expense		5,985
Total operating expenses		68,249
Operating income		46,933
Other income, net		627
Interest income from affiliate		11,511
Interest expense		(214	)
Income before income taxes		58,857
Income tax expense		14,934
Net income	$	43,923

	Six months ended June 30, 2021 (unaudited)
Revenues
Revenues from affiliates	$	56,405
Revenues from unrelated parties		12,867
Total revenues		69,272
Operating expenses
Cost of sales		31,175
Depreciation expense		4,453
Selling, general and administrative expenses		2,825
Total operating expenses		38,453
Operating income		30,819
Other income, net		1,159
Interest income from affiliate		4,143
Interest expense		(76	)
Income before income taxes		36,045
Income tax expense		9,132
Net income	$	26,913

BALANCE, January 1, 2020	$	566,487
Contributions from Parent, net		15,435
Net income		43,923
BALANCE, December 31, 2020	$	625,845
Distributions to Parent, net (unaudited)		(202,681	)
Net income (unaudited)		26,913
BALANCE, June 30, 2021 (unaudited)	$	450,077

	Year ended December 31, 2020
Cash flows from operating activities
Net income	$	43,923
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		9,357
Loss on sale of fixed assets		36
Amortization of operating lease right of use assets		1,778
Deferred tax provision		72
Change in other liabilities		(99	)
Change in:
Accounts receivables, net		172
Due to/from affiliates		512
Other assets		(217	)
Prepaids and other current assets		(1,161	)
Accounts payable		(1,464	)
Payroll and benefits liabilities		(746	)
Operating lease liabilities		(1,780	)
Accrued taxes and other current liabilities		1,263
Net cash provided by operating activities		51,646
Cash flows from investing activities
Purchase of fixed assets		(1,529	)
Proceeds from sale of fixed assets		68
Net cash outflows from investment in affiliate		(65,101	)
Net cash used by investing activities		(66,562	)
Cash flows from financing activities
Repayment of finance lease principal		(486	)
Borrowings on note payable from affiliate		220
Contributions from Parent, net		15,435
Net cash provided by financing activities		15,169

Net increase in cash and cash equivalents		253
Cash and cash equivalents at beginning of period		495
Cash and cash equivalents at end of period		748

	Six months ended June 30, 2021 (unaudited)		Year ended December 31, 2020
Switching	$	39,644	$	69,005
Interline		22,201		29,301
Ancillary services		6,175		14,373
Total revenues from contracts with customers		68,020		112,679
Rental revenues		1,252		2,503
Total revenues	$	69,272	$	115,182

	As of June 30, 2021 (unaudited)			As of December 31, 2020
Accounts receivable – trade	$	9,943		$	12,397
Allowance for doubtful accounts		(741	)		(741	)
Accounts receivable, net	$	9,202			11,656

	Cost		Accumulated Depreciation			Net Book Value		Life of Asset (Years)
Buildings	$	8,395	$	(4,801	)	$	3,594		20-35
Land		7,296		-			7,296		-
Machinery and Equipment		281,647		(156,108	)		125,539		5-50
Vehicles		2,969		(1,861	)		1,108		4-6
Construction in Progress		406		-			406		-
Total	$	300,713	$	(162,770	)	$	137,943

Current tax expense
Federal	$	10,488
State		4,374
Deferred tax expense
Federal		27
State		45
Income tax expense	$	14,934

	December 31, 2020
Tax provision at statutory rate		21.0	%
State income taxes, net of federal income tax benefit		5.9	%
Income tax credits		(1.6	)%
Other, net		0.1	%
Effective income tax rate		25.4	%

	December 31, 2020
Deferred income tax assets:
Operating lease liabilities	$	2,904
Accruals and reserves not deducted for tax purposes until paid		4,327
Other		143

Deferred income tax liabilities:
Property and equipment basis difference		(19,785	)
Operating lease right of use asset		(2,909	)
Net deferred tax liabilities	$	(15,320	)

			Six Months Ended June 30, 2021 (unaudited)				Year Ended December 31, 2020
	Cash paid for interest, net		$	76			$	214

	June 30, 2021 (unaudited)		December 31, 2020
Operating lease right of use assets	$	2,127	$	2,183
Operating lease liabilities, current		272		272
Operating lease liabilities, noncurrent		1,696		1,888

Classification	As of December 31, 2020
Assets
Operating lease right of use assets	$	12,567
Property and equipment, net		2,262
Total leased assets	$	14,829
Liabilities
Current
Operating lease liabilities, current	$	2,320
Finance lease liabilities, current		702
Noncurrent
Operating lease liabilities, noncurrent		10,320
Finance lease liabilities, noncurrent		1,600
Total lease liabilities	$	14,942

		Year Ended December. 31, 2020
	Classification	Year Ended December. 31, 2020
Operating lease cost	Cost of Sales	$	2,799
Finance lease cost	Depreciation expense		511
Finance lease cost	Interest expense		69
Total lease cost		$	3,379

	Operating Leases			Finance Leases			Total
2021	$	2,693		$	765		$	3,458
2022		2,573			765			3,338
2023		2,364			636			3,000
2024		2,109			240			2,349
2025		2,096			21			2,117
After 2025		4,301			-			4,301
Total lease payments	$	16,136		$	2,427		$	18,563
Less: Imputed Interest		(3,496	)		(125	)		(3,621	)
Present value of lease liabilities	$	12,640		$	2,302		$	14,942

	Year Ended December. 31,
	2020
Weighted-average remaining lease term (years)
Operating leases	8.53 years
Finance leases	4.21 years
Weighted-average discount rate (%)
Operating leases		7.66	%
Finance leases		3.14	%

	Year Ended December 31,
	2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(2,799	)
Investing cash flows from operating leases		-
Operating cash flows from finance leases		(69	)
Financing cash flows from finance leases		(486	)
Leased assets obtained in exchange for finance lease liabilities		1,330
Leased assets obtained in exchange for operating lease liabilities		-

	FTAI			Transtar, as Reclassified		Financing Adjustments (Note 4)		Notes	Acquisition Adjustments (Note 5)			Notes	Pro Forma Combined
Assets
Cash and cash equivalents	$	105,244		$	433	$	632,325	(a)	$	(638,383	)	(a)	$	99,619
Restricted cash		38,001			-		-			-				38,001
Accounts receivable, net		175,827			20,693		-			(16	)	(b)		196,504
Leasing equipment, net		1,656,702			-		-			-				1,656,702
Operating lease right-of-use assets, net		64,541			11,722		-			(23	)	(c)		76,240
Finance leases, net		13,124			2,270		-			95		(d)		15,489
Property, plant, and equipment, net		1,014,390			133,879		-			372,497		(e)		1,520,766
Investments		114,493			354,653		-			(354,653	)	(f)		114,493
Intangible assets, net		14,488			-		-			62,370		(g)		76,858
Goodwill		122,735			-		-			117,310		(h)		240,045
Other assets		234,401			8,755		-			12,384		(i)		255,540
Total assets	$	3,553,946		$	532,405	$	632,325		$	(428,419	)		$	4,290,257

Liabilities
Accounts payable and accrued liabilities	$	148,367		$	42,425	$	-		$	2,164		(j)	$	192,956
Debt, net		2,127,086			-		632,325	(b)		-				2,759,411
Maintenance deposits		119,448			-		-			-				119,448
Security deposits		35,663			-		-			-				35,663
Operating lease liabilities		64,120			11,598		-			101		(k)		75,819
Pension and other postretirement benefits		-			-		-			37,543		(l)		37,543
Other liabilities		18,249			28,305		-			(15,283	)	(m)		31,271
Total liabilities	$	2,512,933		$	82,328	$	632,325		$	24,525			$	3,252,111

Equity
Common shares	$	856		$	-	$	-		$	-			$	856
Preferred shares		133			-		-			-				133
Additional paid in capital		1,163,748			450,077		-			(450,077	)	(n)		1,163,748
Accumulated deficit		(88,056	)		-		-			(2,867	)	(o)		(90,923	)
Accumulated other comprehensive loss		(49,115	)		-		-			-				(49,115	)
Shareholders’ equity		1,027,566			450,077		-			(452,944	)			1,024,699
Non-controlling interest in equity of consolidated subsidiaries		13,447			-		-			-				13,447
Total equity		1,041,013			450,077		-			(452,944	)			1,038,146
Total liabilities and equity	$	3,553,946		$	532,405	$	632,325		$	(428,419	)		$	4,290,257

	FTAI			Transtar, as Reclassified		Financing Adjustments (Note 4)			Notes	Acquisition Adjustments (Note 5)			Notes	Pro Forma Combined
Revenues
Equipment leasing revenues	$	138,178		$	-	$	-			$	-			$	138,178
Infrastructure revenues		35,886			69,272		-				-				105,158
Total revenues		174,064			69,272		-				-				243,336
Expenses
Operating expenses		56,180			31,175		-				(650	)	(p)		86,705
General and administrative		7,907			2,825		-				-				10,732
Acquisition and transaction expenses		6,042			-		-				191		(q)		6,233
Management fees and incentive allocation to affiliate		8,103			-		-				-				8,103
Depreciation and amortization		91,906			4,453		-				6,418		(r)		102,777
Asset impairment		2,189			-		-				-				2,189
Interest expense		70,494			76		30,289		(c)		(57	)	(s)		100,802
Total expenses		242,821			38,529		30,289				5,902				317,541
Other (expense) income
Equity in losses of unconsolidated entities		(5,778	)		-		-				-				(5,778	)
Gain on sale of assets, net		4,798			356		-				-				5,154
Loss on extinguishment of debt		(3,254	)		-		-				-				(3,254	)
Interest income		739			4,143		-				(4,143	)	(t)		739
Other (expense) income		(703	)		803		-				-				100
Total other (expense) income		(4,198	)		5,302		-				(4,143	)			(3,039	)
(Loss) income before income taxes		(72,955	)		36,045		(30,289	)			(10,045	)			(77,244	)
(Benefit from) provision for income taxes		(1,471	)		9,132		(7,674	)	(d)		(2,545	)	(u)		(2,558	)
Net (loss) income		(71,484	)		26,913		(22,615	)			(7,500	)			(74,686	)
Less: Net loss attributable to non-controlling interests in consolidated subsidiaries		(11,586	)		-		-				-				(11,586	)
Less: Dividends on preferred shares		11,176			-		-				-				11,176
Net (loss) income attributable to shareholders	$	(71,074	)	$	26,913	$	(22,615	)		$	(7,500	)		$	(74,276	)

Loss per share
Basic ^(v)	$	(0.83	)	$	-									$	(0.86	)
Diluted ^(v)	$	(0.83	)	$	-									$	(0.86	)
Weighted-average shares outstanding:
Basic		86,029,305			-										86,029,305
Diluted		86,029,305			-										86,029,305

	Transtar Before Reclassification		Reclassification Adjustments			Transtar, as Reclassified		FTAI Presentation
ASSETS
Current assets
Cash and cash equivalents	$	433	$	-		$	433	Cash and cash equivalents
Investment in affiliate		354,653		-			354,653	Investments
Accounts receivable, net		9,202		11,491			20,693	Accounts receivable, net
Prepaids and other current assets		2,768		(2,768	)		-	Other assets
Due from affiliates		11,491		(11,491	)		-
Total current assets		378,547		-			378,547

Property and equipment, net		136,149		(2,270	)		133,879	Property, plant and equipment, net
				2,270			2,270	Finance leases, net
Operating lease right of use assets		11,722		-			11,722	Operating lease right-of-use assets, net
Other assets		5,987		2,768			8,755	Other assets
Total assets	$	532,405	$	-		$	532,405
LIABILITIES & MEMBER’S EQUITY
Current liabilities
Accounts payable	$	33,437	$	8,988		$	42,425	Accounts payable and accrued liabilities
Payroll and benefits liabilities		6,236		(6,236	)		-
Accrued taxes and other current liabilities		1,874		(1,874	)		-
Operating lease liabilities		2,315		(2,315	)		-
Finance lease liabilities		840		(840	)		-
Due to affiliates		878		(878	)		-
Total current liabilities		45,580		(3,155	)		42,425
Non-current liabilities
Operating lease liabilities		9,283		2,315			11,598	Operating lease liabilities
Finance lease liabilities		1,425		(1,425	)		-
Deferred income tax liabilities		15,320		(15,320	)		-
Other liabilities		10,720		17,585			28,305	Other liabilities
Total non-current liabilities		36,748		3,155			39,903
Total liabilities		82,328		-			82,328
Member’s equity
Total member’s equity		450,077		-			450,077	Additional paid in capital
Total liabilities and member’s equity	$	532,405	$	-		$	532,405

	Transtar Before Reclassification			Reclassification Adjustments			Transtar, as Reclassified			FTAI Presentation
Revenues
Revenues from affiliates	$	56,405		$	(56,405	)	$	-
Revenues from unrelated parties		12,867			56,405			69,272		Infrastructure revenues
Total revenues		69,272			-			69,272		Total revenues
Operating expenses
Cost of sales		31,175			-			31,175		Operating expenses
Depreciation expense		4,453			-			4,453		Depreciation and amortization
Selling, general and administrative expenses		2,825			-			2,825		General and administrative
Total expenses		38,453			-			38,453
Operating income		30,819			-			30,819
		-			356			356		Gain (loss) on sale of assets, net
Other income, net		1,159			(356	)		803		Other (expense) income
Interest income from affiliate		4,143			-			4,143		Interest income
Interest expense		(76	)		-			(76	)	Interest expense
Income before income taxes		36,045			-			36,045
Income tax expense		9,132			-			9,132		(Benefit from) provision for income taxes
Net income	$	26,913		$	-		$	26,913

in thousands
(i) Cash consideration subject to adjustments set forth in Purchase Agreement	$	636,008
Fair value of cash consideration		636,008
Total purchase consideration	$	636,008

in thousands	As of June 30, 2021
Fair value of assets acquired:
Cash and cash equivalents	$	366
Accounts receivable, net		20,677
Operating lease right-of-use assets, net		11,699
Finance leases, net		2,365
Property, plant and equipment, net		506,376
Intangible assets, net		62,370
Other assets		18,831
Amount attributable to assets acquired	$	622,684

in thousands	As of June 30, 2021
Fair value of liabilities assumed:
Accounts payable and accrued liabilities	$	41,722
Operating lease liabilities		11,699
Pension and other postretirement benefits		37,543
Other liabilities		13,022
Amount attributable to liabilities assumed	$	103,986


Fair value of net assets acquired	$	518,698
Goodwill		117,310
Total preliminary estimated purchase consideration	$	636,008

Identifiable intangible assets	Estimated useful life in years		Estimated fair value
Above/below market leases		2-7	$	1,370
Favorable contracts		13-15		51,000
Customer relationships		13-15		10,000
			$	62,370

Property, plant and equipment	Weighted average estimated useful life in years		Estimated fair value
Rail and railroad cars		1-40	$	205,308
Bridges and Tunnels		15-55		176,310
Land		n/a		91,890
Buildings and Improvements		3-25		12,533
Locomotives		1-16		8,668
Other machinery and equipment		2-15		6,541
Leased vehicles		2-5		2,286
Construction in process		n/a		1,928
Communication equipment		2-22		711
Total property, plant and equipment			$	506,376

in thousands	Six Months Ended June 30, 2021			Year Ended December 31, 2020
Basic EPS
Combined pro forma net loss from continuing operations	$	(74,686	)	$	(122,620	)
Add: Loss attributable to non-controlling interests		(11,586	)		(16,522	)
Less: Preferred stock dividend		11,176			17,869
Combined pro forma net loss from continuing operations attributable to FTAI common shareholders	$	(74,276	)	$	(123,967	)
Combined pro forma net income from discontinued operations attributable to FTAI common shareholders	$	-		$	1,331

Weighted average common shares outstanding		86,029,305			86,015,702

Basic EPS from continuing operations	$	(0.86	)	$	(1.44	)
Basic EPS from discontinued operations	$	-		$	0.02

Weighted average diluted shares outstanding		86,029,305			86,015,702

Diluted EPS from continuing operations	$	(0.86	)	$	(1.44	)
Diluted EPS from discontinued operations	$	-		$	0.02

	Six Months Ended June 30,		Year Ended December 31,
(dollars in thousands)	2021		2020
Net income	$	26,913	$	43,923
Add: Provision for income taxes		9,132		14,934
Add: Equity-based compensation expense		-		-
Add: Acquisition and transaction expenses		-		-
Add: Losses on the modification or extinguishment of debt and capital lease obligations		-		-
Add: Changes in fair value of non-hedge derivative instruments		-		-
Add: Asset impairment charges		-		-
Add: Incentive allocations		-		-
Add: Depreciation and amortization expense		4,453		9,357
Add: Interest expense		76		214
Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities		-		-
Less: Equity in losses of unconsolidated entities		-		-
Less: Non-controlling share of Adjusted EBITDA		-		-
Adjusted EBITDA (non-GAAP)	$	40,574	$	68,428