Good day, ladies and gentlemen and thank you for standing by. Welcome to the Fortress Transportation and Infrastructure Investors LLC Third Quarter 2022 Earnings Conference Call. At this time, I would like to turn the conference over to your host, Mr. Alan Andreini. Sir, please begin..

Thank you, Howard. I would like to welcome you all to the Fortress Transportation Infrastructure third quarter 2022 earnings call. Joining me here today are Joe Adams, the CEO of FTAI; and Angela Nam, the CFO of FTAI.

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 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..

Thanks, Alan. I'm pleased to announce our 30th dividend as a public company and our 45th consecutive dividend since inception. The dividend of $0.30 per share will be paid on November 28, based on a shareholder record date of November 14.

Also, please note FTAI successfully completed the spinoff of its infrastructure business on the 1st of August of this year. Historical financial condition and the results of operations related to the infrastructure business prior to the spinoff date have been disclosed under Discontinued Operations within the consolidated financial statements.

Now, let's turn to the numbers. The key metric for us is adjusted EBITDA. Adjusted EBITDA was $108.9 million, down 24% compared to $143.7 million in Q2 2022 and up 25% compared to $87.2 million in Q3 2021. The above numbers are for consolidated FTAI which includes both leasing and aerospace products.

Starting this quarter, we will be presenting leasing and aerospace products as separate segments going forward. Let's start with leasing. Leasing had a good quarter, posting approximately $96 million of EBITDA. The pure leasing component of the $96 million of EBITDA came in at $75 million for Q3, down from $87 million in Q2 as expected.

The principal reason for the decline was due to the sale of approximately $145 million of book value of assets in Q2 and Q3 attributed to our cargo campaign sales in which we sold 5 aircraft and 30 engines. With very strong demand for assets and the addition of some new acquisitions which we will talk about later, we expect Q4 will rebound.

And next year, 2023, we're very confident in leasing EBITDA of $350 million to $400 million for the year, excluding gains on asset sales. Part of the $96 million in EBITDA for leasing came from gains on asset sales which also performed as expected. We sold $64.9 million book value of assets for a gain of $20.6 million.

We have more asset sales coming in Q4 to recycle capital invested in some of 2021's larger acquisitions. In addition, we'll continue to make freighter sales to capitalize on the continuing robust freighter market. We're very comfortable assuming gains on asset sales continuing at approximately $25 million per quarter or $100 million for all of 2023.

Aerospace products had another solid quarter with $19 million of EBITDA. We started these activities only a little over a year ago and in the last 4 quarters have booked approximately $70 million of EBITDA without any contribution from PMA.

We see tremendous potential and feel good about generating $20 million to $30 million in quarterly EBITDA and think $100 million-plus in 2023 EBITDA to be very doable.

We feel confident about this number because we're seeing a rapidly expanding backlog of aerospace products business with other leasing companies, MROs, or maintenance repair organizations and airlines.

With respect to Q4, we have begun closing the sale of $200 million in assets and have signed letters of intent to purchase $300 million in new assets also in Q4. The net pickup in leasing EBITDA from the new investments minus the give-up from the sales we estimate to be $40 million per annum or $10 million per quarter.

Importantly, 2 of these asset sales involved FTAI retaining the engine services contract on behalf of the buyer which should generate $1 million per annum per aircraft or $10 million total per annum of aerospace EBITDA over the remaining lease term of approximately 8 years.

After 3 years of macro trade headwinds, we now have macro factors that are greatly helping us. First, OEMs have instituted mostly double digit percentage price increases for parts effective this quarter. And parts price increases creates more opportunity for our cost saving products to increase market share for us.

And since service shop visits costs are predominantly parts, the replacement value of our engines goes up correspondingly. Second, many airlines are trying to reduce expensive full engine restorations and instead increase module swaps and light shop visits that do not require disassembly which plays right to our strengths and into our products.

Thirdly, delays in new aircraft deliveries are creating scarcity of 737NGs and A320 COs which will drive strong demand for 737NGs, A320 COs and, importantly, CFM56 engines for many years to come. And fourth, industry demand for travel has returned to almost pre-COVID levels.

Regarding PMA, or parts manufacturing authorization, there's no change in our planning which includes a full complement of airfoil parts becoming available throughout next year. In summary, it feels like we are finally operating in an environment with strong tailwinds.

We managed through the COVID disruptions, followed by Russia-Ukraine and will have our portfolio optimized by this year end. And with demand for air travel surging globally, combined with proprietary cost-saving aerospace products, 2023 is shaping up to be an outstanding year. With that, let me turn the call back to Alan..

Thank you, Joe. Howard, you may now open the call to Q&A..

Our first question or comment comes from the line of Giuliano Bologna from Compass Point..

Congrats on another quarter, great quarter.

I’d be curious, when I’m looking at some of the numbers that you just mapped out around asset sales and redeployment of capital into new assets that are happening during 4Q, you’re selling a fair amount more assets than you sold in the last two quarters and you’ve been able to recognize pretty impressive gains on sale that were even above the range during one of those quarters of the $20 million to $30 million range.

Is it fair to assume that the combination of the large asset sales could move you towards the higher end of that $20 million to $30 million range in 4Q? And then kind of as an add-on to that, with the EBITDA take-up and probably some lease-up demand in the portfolio, is it also fair to assume that you can get back within the, call it, $90 million to $100 million run rate during two for core leasing?.

Yes. So I would say on the gains, yes, it's fair to assume that some of the asset sales we were targeting for Q2 got delayed and have been pushed in -- or targeted for Q3 got delayed and are pushed into Q4. So I do think there's upside over the sort of guided range we have in Q4 just because of that, the sequencing and the timing.

So it's shaping up to be a pretty good quarter from an asset sales point of view. On the leasing side, as I indicated, we're very comfortable next year hitting the sort of $90 million to $100 million per quarter. The Q4 will really be a function of the timing of closings and when those occur. So I think it's possible that we can get there.

But in today's world, it seems like there's more delays than accelerations and sort of every time you turn around, there's something about a part not available or a maintenance shop can't get something delivered. And so I'm a little hesitant to promise on that just because we're in a world ..

Hopefully -- the call may have cut out. Hopefully it wasn't on my side. But if the others are still there and it's still working. I'd be curious, I realize it's an imperfect science but with the vote coming up on the merger that would effectively -- that would convert and remove the K-1.

One of the topics that's come up in some discussions is index inclusion and how that could impact your shareholder base. I'm curious if you've done any analysis around kind of the low end and the high end of the range of what index buying may need to happen on the back of converting into a PFIC..

Joe, are you there? Did you hear Giuliano’s question?.

I did, yes. And I gave a long answer which unfortunately it sounds like you didn't hear it. But I'll -- so in terms of asset sales, we have pushed -- some of the deals we expected to close in Q3 got delayed and will end up closing in Q4. So we think there is upside to the sort of typical run rate of what we've been expecting on gain on sale.

So I think that you're right. We should be at the high end of that number or potentially even above it, just given the sequence and closing deals is taking a little bit longer than we expect. In terms of the leasing EBITDA, I said we're very comfortable with next year being in that $90 million to $100 million per quarter range.

But it's really a function of the timing of the closing of some of these new acquisitions. And in today's world, everything seems to take a little bit longer than expected. It's either a delay on a part or a delay on a maintenance shop which -- so I'm a little hesitant to be able to predict Q4 yet given that item.

Now ultimately, these supply chain disruptions are good for us because we have available equipment and engines other people don’t. But it is a reality of today’s world that everything seems to be taking a little bit longer to get done. So I feel good about the total run rate once we get all the assets deployed. Q4 is a little bit variable.

Definitely will be up. Question is whether we get to the $90 million or not for the quarter..

Joe, did you happen to hear Giuliano's second question relating to the indexes? Giuliano, if Joe didn't hear that, can you repeat it, please?.

Yes. I think it was when we lost you, so I'll re-ask those questions quickly. One of the questions that I was curious about was with the vote approaching on November 9 for the reverse merger that will effectively change the corporate structure and remove the K-1 and convert you guys to PFIC.

I realize it's imperfect science but one of the topics that's come up is index included and what that could mean just from an index ownership perspective over time.

And I'm curious if you've done any analysis or you have any sense of what kind of the low end or high end ranges for how the impact of special index buying from kind of a need to buy perspective as a percentage of the outcome to shares?.

Yes. We have done some analysis and we have a list of some potential funds that might -- we might get included in. And I think the -- historically, obviously well with Aircastle which Aircastle was very successful at getting included and has a very similar corporate structure to the one we’re adopting. So that would bode well.

But it is -- there is a qualitative element in all these applications, so we’re not totally sure. But I would say the range is probably between 10% and 30% of our total stock market capitalization should end up in passive funds..

Our next question or comment comes from the line of Hillary Cacanando from Deutsche Bank..

So, for the -- in terms of the insurance recovery, you have mentioned that you are expecting -- previously you had mentioned that you're expecting partial recovery from your insurance claims this year.

I just wanted to understand like how much of the -- is that still the case? And if so, how much of the recovery relates to assets in Ukraine that actually may have been destroyed versus how much of the recovery will be for planes that are still operational and still operating in Russia?.

Yes. Happy to talk about insurance. Just to recap, we have about $290 million of insurance claims on our $125 million of book value of assets that we've filed. And really, as I mentioned before, we've broken it into 3 buckets of the different strategies with each one.

The first one is sort of -- I think that would be the most -- the first to pay is the contingent insurance coverage that we have. And that's about $90 million and it's covered mostly engines. The second is Ukraine which is about $75 million. And the third is Russian assets airplanes, mostly airplanes that are lost in Russia, about $125 million.

I would say we've made progress on 2 of those 3 categories, namely the contingent coverage and the Ukraine assets.

And progress means that we've had a good dialogue and we have a framework of a plan but we don't have a sort of definitive -- enough of a definition of the plan for me to give you a definitive time line, although I am optimistic that that could -- those 2 buckets could resolve in the next 3 to 6 months is my hope.

The Ukrainian assets that we were thinking or destroyed may not be and they may be in good shape as far as we can tell. We now have people on the ground. And so we're working on various strategies with respect to those assets, either with insurance or without insurance that we can monetize.

But clearly, those are -- that's a priority for us to focus and work on those. And then the Russian assets is a bit frustrating. It's frustrating for the whole industry in that the insurance companies just refuse to engage. And I think you saw AerCap and DAE have filed lawsuits.

Ultimately, the good news is that none of the participants are talking again about, well, we canceled the policy and you don't have coverage. Or it's not a loss; it's all about sanctions and obfuscation that I think ultimately will -- they'll run out of excuses and room and litigation forces the issue.

So I think that will pay, as I've said from the very beginning but I think it may take the longest of the three.

Okay. Got it. And then my second question is, obviously we're seeing all these supply chain issues affecting the OEMs. And you've also mentioned the cost, the increase in I guess price and cost escalation.

So I was wondering if you could talk a little bit about the cost escalation that you're seeing on the engine side and if we could actually see an impact, maybe like the benefit from the maintenance side of the business that you could actually like point to in terms of quantifying the benefit..

Yes. So all of our engine maintenance reserve payments are indexed to shop visit costs. and job visits costs are 90% parts. And so if the parts prices just went up 10%, effectively you’re getting a 10% increase in our maintenance reserve payments.

And so that for the CFM, GE, Safran fleet that goes into effect November 1, we had a feeling that was coming. So we’ve been looking to acquire more engines this summer and add as much as we can. So we’re -- I think we’re well positioned in that.

And then that should translate -- that will translate into additional EBITDA for us starting then, starting November..

Our next question or comment comes from the line of Josh Sullivan from Benchmark Company..

Just kind of following up on that question.

As far as the process where FTAI retains the maintenance streams in some of these aircraft sales which aircraft or customer types are most drawn to that arrangement? Or where should we see that process really gain some traction?.

It's all older CFM56 engines. And the way we're positioning ourselves in the market is our view is for CFM56 engines, the first 10 to 12 years is covered by the OEM under power by our maintenance agreements for the most part. And so we're not going after that business. It's not really available.

But once the engine has passed maybe the second shoppers that are -- or looking at the second shop is about year 12 or 14, a lot of those maintenance contracts are up for bid and us to acquire. And so what we want to do is use our products and our services to be effectively the OEM for the second half of the life of that engine.

And so that's the way we position ourselves with airlines and MRO shops is that we can take over your maintenance activity, much like GE does on the front end. We can save you money and we can totally derisk it for you because you won't have any negative surprise events. You won't have any overruns or surprise expenses to deal with.

And in the case of airlines that are looking to phase out the fleet, we can buy the fleet and then provide you a new engine whenever you want it. So we'll provide you liquidity, flexibility and cost savings. So we're finding a very broad appeal for that pitch.

It resonates with people, particularly accelerated by the fact that the prices just went up, are going up 10%. And airlines are experiencing a lot of cost inflation and they are looking for every potential way to do it. So I think it is resonating.

And I think all of that we're able to do before any incremental savings that might come from PMA which we expect next year will..

Got it. No, that’s helpful.

And then maybe, could you just give us some general thoughts on the current leasing environment maybe by geography? What are you seeing as far as duration or some of the other features on leases that might be changing in this environment?.

Yes. So a lot of the airlines are now coming saying that they have new orders. They've built their fleet plan around receiving NEOs and MAX aircraft over the next couple of years and they're seeing those delayed.

So we're seeing airlines come saying, show me anything you have that in the NG and the CO range where I could add capacity in meaningful numbers. So it's a very, very strong environment. And they're willing to -- typically, those leases are 5 to 6 years in duration. You do from one D check to another.

So the term of the agreement is attractive and the quantity that people are looking to get is very broad-based. So I'd say obviously, the only market that is still relatively closed or constrained is China but that's -- they're an outlier. Every other region of the world is really robust.

Latin America, as I mentioned previously, we've done a lot of business in Latin America. It's above average growth rates. Middle East, Southeast Asia, very strong. And then Western Europe is -- was probably the latest to recover because of omicron but its capacity is coming back and being added there now again as well.

So I think it's a very, very strong market environment. Obviously, Russia's gone forever which is about 5% of market, so it's not that material. But a very good global dynamic..

Our next question or comment comes from the line of Brandon Oglenski from Barclays..

Joe, appreciate the outlook here. Could you just run us through the set of asset sales and net additions to the portfolio closing out the year? And then I guess the bigger question we’re having -- I mean, the outlook here is pretty good but your cash balance is a little bit low.

So, how do you expect to manage through liquidity here in the next few quarters?.

Yes. So I think we had about $70 million of cash at the end of Q3. When you look at the various asset sales and asset purchases, I think we should end up the year potentially with sort of $50-ish million drawn on the revolver. So we have a $225 million revolver that is undrawn at the moment. It's fully available.

So that's how we're going to manage liquidity as we have done in the past. So mostly the pluses and minuses, we're adding $300 million of assets and effectively cash flows will receive from the operations as well as the asset sales, it's pretty much -- pretty close to a wash.

So we expect to end the year with very little -- with most of the revolver, if not all of it, available going into next year..

And I guess, longer term, where do you want to see leverage on the portfolio, especially -- has that changed at all with higher interest rates as well?.

Not so much to the higher interest rates. What we've communicated to the rating agencies is that A, we want to be BB and B, we want to manage debt to EBITDA under 5x. And if you look at our pro forma -- if we do $550 million to $600 million of EBITDA next year, we'll be under 4x.

And I think both agencies, Moody's, S&P and Fitch have all indicated if we do that, we would be either upgraded or sort of -- we'd be in the BB range and that's kind of consistent with where we want to be. So I don't think it's necessarily interest rate driven. We do have some opportunities now.

And I think next year, we would look to as a priority to repay some debt with excess cash flow, so bring that net debt balance down and get even lower in terms of the debt to EBITDA and higher in terms of rating. So, I think that's where we're leaning at the moment.

And I think part of the program of selling assets and buying assets is to manage so that we're not necessarily adding a lot of capital at this point. We're recycling and picking up EBITDA..

Okay. Appreciate that.

And then on the greater than the $0.5 billion in EBITDA targets for next year which I think you’ve reiterated here, what type of portfolio utilization level do you think you need to achieve to get there?.

Well, the aircraft, I think generally, we've been over 90% which I think we will be. We've had -- we still have some assets that we've repositioned from Russia-Ukraine that are either to be sold or to be leased. And we added some aircraft like 737-800s this summer which we bought at a very attractive price off-lease.

All of those are going on lease this month in October. 2 in October, 1 in November. So those types of -- when I say the portfolio will be optimized by the end of the year, everything we're doing is to get assets redeployed from Russia-Ukraine, or cargo assets that we were targeting for sale, get those sold.

So I think by the end of the year, utilization should be -- for aircraft should be 90%-plus. Engines is always -- we've always targeted 50% to 75%. And effectively, utilization is really what drives it. It's the number of hours flown and the total amount of the portfolio.

So we've been -- for instance, the last 2 quarters, we've acquired quite a lot of CFM56 engines that are off-lease. So utilization hasn't really gone up in spite of a strong market environment because we've been adding to the denominator.

And we will keep doing that because we could see there was a price increase coming and we also think the economics of those engines are extremely attractive. So we would add as many of those as we can. So, I think that the target range is still the same, 50% to 75% on engine utilization. And that’s not what -- we don’t really manage to that.

We manage to sort of having the total EBITDA of the portfolio optimized..

Our next question or comment comes from the line of Brian Mckenna from JMP Securities..

So the business has clearly navigated some unexpected headwinds over the past couple of years. I’m curious, though, the backdrop today seems like it couldn’t be better.

But with the potential for a recession next year or maybe some pullback in related activity, would you think about accelerating asset sales in the near term or slowing the pace of new investments in order to delever the business even more, that way you have more liquidity and excess capital to be more offensive in any slowdown?.

Well, we've been doing that this year. With the cargo sales, we consciously decided early this year that we felt like the cargo market is maybe as good as it gets and we decided that it was better to be early than late. So I think that was a good decision. And we've sold probably $400 million of cargo assets to do -- to generate capital.

But on the flip side, just sitting with cash, given the attractive environment in the CFM56 engine and the substantial competitive advantage we have, that didn't seem like a good idea either. And I think from our point of view, it feels like we already had recessions. We had 2 of them.

And the economic -- potential economic recession will have less impact on CFM56 demand than COVID did, for example. So we feel that there's -- even if there is an economic slowdown globally, the demand for those assets and the travel recovery is sort of a bigger driver than the global economy..

Helpful. And then, I appreciate the color on the insurance claims.

But if you were to see some windfall from these claims over the next couple of quarters, I guess what’s your number one priority for that capital? Is it paying down some incremental debt and if so which maturities would you look to pay down first? Would you even maybe dividend some of it back to shareholders, or would you put some of it into incremental asset purchases? Just curious how you’re thinking about that..

I think probably repayment of debt. And we'll look at all the various issues. I mean, we've debated as part of the dividend from the infrastructure, we repaid the 2025s which is the next maturity due. So we brought that down to $650 million. We could do more of that.

The other attractive investment would be the more expensive debt which you can also -- that has more -- it's more accretive when you pay down the highest cost debt. So that -- I think those would be the two choices but I think our focus would be to repay debt..

Our next question or comment comes from the line of Frank Galanti from Stifel..

This is Frank.

Can you hear me?.

Yes..

Great. I wanted to start on the module factory and around the competitive landscape there.

I guess first, can you just sort of talk high level what the business provides from a customer’s perspective? Like does it actually -- is it sort of a 2-year kick down the road from a maintenance visit? And sort of how does that compare to a quick engine change? Just trying to think through where people find value in the module factory.

And then I guess secondarily, who does this? Who do you see as your big competitors that you’re going up against? Obviously with the PMA parts and the used service and materials, there’s going to be a cost advantage. But that’s only minimal at this point with the PMA approval progress so far.

So just sort of wanted to dig in on that business specifically..

Sure. So the customers for the module factory, I think you would sort of divide them into 2 different categories of how they see the benefit. One would be optimizing. So you might have an LTT that needs a shop visit but the rest of the engine doesn't.

And so if you can do a module swap and optimize the number of hours and cycles and match up that with the other parts of that engine, you can significantly reduce your maintenance cost because you don't have to put the whole engine through for a shop visit. And that was similar -- there's a cost savings and a benefit for that.

And that was illustrated in the WestJet deal that we won with Lufthansa. So that's one customer would be optimizing. The second is avoiding that shop visit by doing engine -- module exchanges totally.

So lots of airlines today, particularly as they look at their CFM56 suite are saying, what can I do to avoid a full restoration, meaning you have to induct the whole engine into an MRO shop, disassemble it and then every part in that engine gets looked at and it often ends up in a significant increase in total cost.

So a module swap would allow you to exchange the fan or the LPT and put a new core in and keep the fan and the LPT and not have to touch those. So that's the target market for that product and it's substantial.

We've met with many airlines over the last 3 to 6 months and it's their stated goal was to try to reduce the number of full restorations they do. And modules fit perfectly into being able for them to sort of achieve that objective.

And so the question is, who does that? And so if you look at in the industry today, the big airlines that have their own MRO shop do this internally. So it could be a Delta, United, American. They manage module exchanges right now in terms of their own fleet because they have enough airplanes and they have an MRO shop.

The market that doesn't have access to that is all other airlines of which there are hundreds. And if you went out today and said, who can I buy a fan from or who can I buy an LPT from, it's no one but us. So we're the first to sort of create this storefront where people can do that.

And it's very powerful for a lot of these airlines that are just learning about the opportunity. And so we're seeing airlines start with 1 or 2 modules, leasing companies that are trying to do it to minimize return compensation and maintenance shops who are trying to win business. So the entire ecosystem is open to this.

And today, there's no one else offering this product. So we think it's very beneficial to the airlines, very beneficial in maintenance shops, beneficial to the whole industry and it opens everybody up to have that capability..

Okay, great. Yes, that's super helpful. Appreciate that. And then for my second question, I wanted to dig in on the PMA parts. And I apologize; you may have gone through this in the beginning of the call. I've got sick kids, so I was a little bit late getting on.

But can you sort of reiterate the time line on the remaining parts approval? And then specifically around the second part, obviously that's been delayed. What's changed from when you first kind of contemplated getting approval on that part relative today? Sort of walk us through why that's been so delayed..

Yes. I think, as I mentioned previously, there's two things going on. There's the natural process of design ..

Ladies and gentlemen, please stand by. We lost connection. Go ahead, Mr. Adams..

So where did I drop off?.

Just sort of the beginning of the PMA question..

Okay. So there's a natural process in all of these where designs are tweaked and test results are come in and there's modifications made, so that's part of the process that occurs in every one of these. So that's part of the delay. The second is FAA responsiveness and turnaround time.

And the FAA has been unusually slow in terms of getting back to people with answers, responding, having the right people in the meeting. They have personnel vacancies that have not been filled. So that part of it is out of our control and unusual. It's never happened that way before. So all those -- those are the 2 reasons for delays.

But as I mentioned, all the parts and process are proceeding. They're doing very well. And it's expected that all the remaining parts that are under development will be submitted for approval next year in 2023..

Okay, that's helpful. And I got another question, if I could, around Chromalloy. Veritas is looking -- or is going to be buying that company. I just wanted to confirm that it's got no effect on FTAI from an operations perspective.

And then sort of second around that and this is maybe a bit premature but given where we stand or you guys stand in the PMA approval process but can you sort of talk about sort of the duration of the competitive advantage with the PMA business? Because if the PMA business only is for the CFM56-7B/5B engine, what can FTAI do from a competitive advantage perspective kind of in the out years?.

Yes. So I can confirm that there's no effect on the Chromalloy joint venture. There is no change in control provision, no termination right in the agreements and we look forward to the -- working with Veritas. I think it's a very significant positive for Chromalloy.

It was a quite robust auction and price which I think reflects very well on the quality of the management team and the future opportunities. So I think it's a positive from our point of view that the transaction happens and we look forward to that. In terms of duration, there is a -- we are focused on the CFM56 engine really exclusively.

We started working with Chromalloy on a CF6-80 engine and we've had a great partnership on that. And we've been reducing our exposure in the CF6-80 engine, so that is becoming more mature. So the sweet spot of the CFM56 engine from a number of shop visits point of view really runs from probably 2023 to a minimum of 2030.

And it might have been extended, I think, by these new delivery delays as well that are coming out. And also by the total maintenance cost of some of this new technology is still an unknown. So we feel very good about at least the next 6 to 7 years, having 3,000-plus shop visits a year which is a huge, huge market opportunity.

After 2030, I'm not quite sure yet. But I feel like we have a lot of time to come up with some new ideas. We already have some ideas on the drawing board for next year in terms ..

Please stand by..

Not sure if you had any additional -- you said you had something on the drawing board but that sort of answers my question. Appreciate taking the questions..

I'm back.

Can you hear me?.

Yes, we can hear you. You had said something about we had things on the drawing board..

Yes. We have some ideas about other maintenance-related products that we're developing for next year. So I think it's not going to be static. We're not going to sit and wait until 2030 and do nothing..

We have time for one more question. Our last question for today will come from the line of Mr. Greg Lewis from BTIG..

Yes, Joe, I just had one question. Realizing that it’s still early days. We got to get the C Corp conversion. But I guess, as we think about this bigger picture, like right now, FTAI’s clearly trading at a nice discount to its peers. I heard a lot about continuing to deploy cash for assets. You did touch on the dividend.

I mean, at a certain point, do we need to start thinking about buying back the stock?.

Sure. I think when we have the decision with excess cash flow, I think we're going to look at all 3 alternatives which is pay down debt, increase the dividend or buy back stock. So I don't have any preset answer to that. It'll be a function of what the outlook is, what the opportunities are, where the various securities are trading.

So we'll take a look at all of that..

Thank you. At this time, I'd like to turn the conference back over to Mr. Andreini for any closing remarks..

Thank you, Howard. Thank you all for participating in today's conference call. We look forward to updating you after Q4. Thank you..

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, stand by..