{ "docId": "019dd923-622c-750b-8b97-afb07f54b28c", "docSlug": "ae6eb7229943", "documentTitle": "FTAI Aviation, Ltd. (FTAI)", "authorId": "51_Muddy_Waters", "authorName": "Muddy Waters Research", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-01-15 00:00:00", "orientation": "landscape", "aspectRatio": 1.7777778, "pageNumber": 36, "pageCount": 64, "prevPage": 35, "nextPage": 37, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 2, "notes": "Includes a quote from a consultant/former executive to support the claim of accounting manipulation.", "elementsJson": [ "headline_text", "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b97-afb07f54b28c/36", "deckHref": "/decks/019dd923-622c-750b-8b97-afb07f54b28c", "deckJsonHref": "/decks/019dd923-622c-750b-8b97-afb07f54b28c.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-afb07f54b28c#slide-36", "components": [ { "bbox": null, "kind": "callout", "text": "This gives the misleading appearance of a capital liteness to FTAI's AP's business. In fact, the company has simply allocated the costs to Leasing.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-70f2-7016-81d1-e2761ab89709", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.94, "x": 0.03, "y": 0.25 }, "kind": "paragraph", "text": "The capital assets allocated to Aerospace Products are minimal, given that total depreciation & amortization was ~$3.2m and ~$300k in the YTD 2024 and 2023 periods, respectively. This gives the misleading appearance of a capital liteness to FTAI's AP's business. In fact, the company has simply allocated the costs to Leasing.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "926bc33a-7785-4749-9523-16a36501d823", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.94, "x": 0.03, "y": 0.15 }, "kind": "paragraph", "text": "By the time FTAI's Aerospace Products sells an engine/module, its carrying value could have been reduced to an artificially low level because the magnitude of depreciation is subject to a high degree of management discretion.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f453463a-cbf8-4f7b-9892-8d7dc2b071a8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.86, "x": 0.07, "y": 0.45 }, "kind": "quote", "text": "Consultant: \"But then, you know, to really get the numbers where they are, this is where... to use your phrase, that sleight of hand comes in—is that, you know when, when you're selling an engine, are you selling an engine or are you selling four modules? And if you start booking engine sales as module sales, and... then also you have assets that have been in the leasing portfolio for quite some time; so, you can, you can, you know, depreciate those down, and you can really boost the numbers on the aerospace side to show the strength on the aerospace to really get that valuation, and really kind of you're robbing Peter to pay Paul internally. You're kind of taking the money way out of the leasing sector and putting that into the aerospace sector and spinning it that way.\"1", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a546cbc4-c7e0-44e2-b371-1a9ae77f69d2", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "But then, you know, to really get the numbers where they are, this is where... to use your phrase, that sleight of hand comes in—is that, you know when, when you're selling an engine, are you selling an engine or are you selling four modules? And if you start booking engine sales as module sales, and... then also you have assets that have been in the leasing portfolio for quite some time; so, you can, you can, you know, depreciate those down, and you can really boost the numbers on the aerospace side to show the strength on the aerospace to really get that valuation, and really kind of you're robbing Peter to pay Paul internally. You're kind of taking the money way out of the leasing sector and putting that into the aerospace sector and spinning it that way. — Consultant A and former FTAI executive", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-70f2-7016-81d1-e5ed76ff9d5f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.03, "y": 0.88 }, "kind": "source-note", "text": "1 Consultant A and former FTAI executive", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8da08f5e-f68c-4a81-bd07-f4ccf22c539f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.45, "x": 0.03, "y": 0.05 }, "kind": "title", "text": "Aerospace Products Is Not Capital Lite", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9b1a7617-f995-48d3-bec4-62af5468b357", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "2e56fee3-8120-47f2-991b-4dbee8484ec8", "evidence": "The slide explicitly claims 'sleight of hand' and 'robbing Peter to pay Paul' to manipulate financial reporting.", "confidence": 0.9 } ], "arcBeats": [ { "to": 40, "from": 21, "beatId": "e326ab42-4898-4a2f-bbfd-3a554d62af1c", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Struggle", "beatSlug": "overcoming-monster-the-struggle", "evidence": "The deck presents evidence of FTAI's financial manipulation", "position": 2, "confidence": 0.8, "parentBeatName": "Development", "parentBeatSlug": "development" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }