{
  "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": 49,
  "pageCount": 64,
  "prevPage": 48,
  "nextPage": 50,
  "slideType": "problem_statement",
  "function": "diagnose_problem",
  "density": "overcrowded",
  "nDataPoints": 8,
  "notes": "The slide uses a narrative structure to connect margin compression with inventory valuation trends.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b97-afb07f54b28c/49",
  "deckHref": "/decks/019dd923-622c-750b-8b97-afb07f54b28c",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b97-afb07f54b28c.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-afb07f54b28c#slide-49",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We believe this is evidence that the fundamentals of core Aerospace Products have deteriorated.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-25b4-767c-9bf0-28bc99f20b08",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.1,
        "x": 0.85,
        "y": 0.03
      },
      "kind": "image",
      "text": "MUDDY WATERS RESEARCH",
      "attrs": null,
      "subkind": "logo",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5a1d1949-8909-4de8-af1d-52034d355b85",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "EBITDA margin: 200bps",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-25b4-767c-9bf0-32c3cb6d510f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.9,
        "x": 0.05,
        "y": 0.15
      },
      "kind": "paragraph",
      "text": "Reported EBITDA margins dropped by 200bps YoY in Q3 2024; however, FTAI’s ~20% gross margin Used Serviceable Material (USM / spare parts) business has declined from 25% to 15% of total Aerospace Products EBITDA. A lower proportion of USM revenue should be a tailwind for margins, but core-module margins have declined by ~600bps Q3 2024 vs H1 2024 after normalizing for the USM business. We believe this is evidence that the fundamentals of core Aerospace Products have deteriorated.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "86fd4cb4-b801-4204-b98a-b0b0f536520d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.2,
        "w": 0.9,
        "x": 0.05,
        "y": 0.45
      },
      "kind": "paragraph",
      "text": "Less than half of Aerospace Products’ inventory was ever actually on lease, implying that the business is reliant on the secondary market for Inventory. Before COVID, FTAI was paying ~$4.5m, on average for an ~half-life engine (CFM56-7B), with ~48 months of flight time. During COVID the same engine fell to ~$2.5m per engine, and today the same engine is worth ~$7m.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e8308052-29c4-4059-9a6a-075fc49033e8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "On USM, it's been -- we've indicated in the past that we -- it was roughly previously about 25% of EBITDA from Aerospace Products, but as we have ramped up the MRE business that percentage is going down to where it less than 15% of EBITDA at this point. And we'll continue as a percentage to decline because that's not a high-growth business. So hopefully, that helps. — FTAI Aviation Q1 2024 Earnings Call April 26, 2024, CEO",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-25b4-767c-9bf0-2ce84eea18eb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.9,
        "x": 0.05,
        "y": 0.8
      },
      "kind": "source-note",
      "text": "FTAI Aviation Q1 2024 Earnings Call April 26, 2024, CEO: “On USM, it’s been -- we’ve indicated in the past that we -- it was roughly previously about 25% of EBITDA from Aerospace Products, but as we have ramped up the MRE business that percentage is going down to where it less than 15% of EBITDA at this point. And we’ll continue as a percentage to decline because that’s not a high-growth business. So hopefully, that helps.” Investor call with FTAI IR, October 2024. Consultant A.",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a07a58d1-ecb2-40ec-9117-08ecde0502ed",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.6,
        "x": 0.05,
        "y": 0.05
      },
      "kind": "title",
      "text": "Aerospace Products Is Facing Fundamental Headwinds",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "cf4900f9-12dc-4b17-92ea-17ec0d6c63e0",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 64,
      "from": 41,
      "beatId": "a9cb613d-f388-47fc-b02a-1d4f2321ab2e",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "The Conclusion",
      "beatSlug": "overcoming-monster-the-victory",
      "evidence": "The deck concludes with a summary of findings and implications",
      "position": 3,
      "confidence": 0.8,
      "parentBeatName": "Turn",
      "parentBeatSlug": "turn"
    }
  ],
  "loops": [
    {
      "to": 54,
      "from": 49,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "07953916-f602-4c19-aea2-ea34ee8b83d5",
      "evidence": "The deck highlights the risks and consequences of FTAI's financial manipulation",
      "position": 1,
      "objective": "What are the implications of FTAI's financial manipulation?",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.6,
      "description": "Quantify what happens if the audience does nothing"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}