We're going to go ahead and get started with the next presentation. First off, thank you everyone for joining us here presently in person, as well as those who are joining us via the webcast. My name is Joe Noyons. Up next we have Sky Harbour Group Corporation, traded on the New York Stock Exchange under the symbol SKYH. They are a developer and operator of aviation hangar campuses throughout the U.S. to meet the growing demand of private and corporate airport infrastructure. Presenting on behalf of the company today is going to be the Senior Vice President and Treasurer, Tim Herr. Go ahead, Tim. Morning, thanks so much. I'm Tim Herr, Treasurer and SVP of Finance with Sky Harbour. Started my career in military aviation, was a Navy pilot for 10 years. Ended up getting out, going to business school and joining our CEO and founder, Tal Keinan, as he was getting Sky Harbour started. Tal, he's not here today, but he's a former Israeli F16 pilot, had a second career in Wall Street. Now Sky Harbour is his third career. Before Sky Harbour, he owned an aircraft here in the New York area and could not find a hangar for it. That's what really sparked his interest in why that was. If he couldn't find a hangar, is that just the New York area? Turns out it's not. It's most major metropolitan airports around the country suffer from a chronic lack of hangar space. We'll get into why that is. That's kind of the genesis of the business was Tal solving a personal problem that he had with his own aircraft. Our business is fairly simple to explain. A lot of nuance related to aviation and financing it. It looks very much like real estate. It's getting land. We can't own airport land because it's typically owned by the local city or county that the airport is located in. We get the land at airports in the form of long-term ground leases, typically out to 50 years. A couple of advantages to that. One is no upfront capital cost. We don't pay fee simple dollars for a piece of land to develop. The other is because the public technically owns the land that we develop on, it actually qualifies us for issuing federally tax-exempt municipal debt that private companies like ourselves can issue for greenfield development on airports. The ground lease is actually a pretty powerful tool for us in our financing. That's land acquisition. We'll get into how we do that here in a future slide. We design and construct the hangars that you see in the pictures here. In recent years, we've vertically integrated into a lot of the construction supply chain. On the manufacturing side, we actually own our own captive hangar manufacturing company called Stratus Building Systems outside of Fort Worth. We do our own manufacturing of our hangars. In the last year, we've also started doing our own general contracting. Again, this is all efforts to drive down our construction costs, which is obviously our big input in the business. That's the development side. Finally, it's leasing and operating them. We conduct general operations to get the aircraft out of the hangar and flying. We don't do things like maintenance and other upkeep of the aircraft. That's incumbent on aircraft owners. We do aircraft towing, we sell fuel, and do other services to get the aircraft ready to fly. We lease to kind of three categories of tenants. The first, the majority of our clients are high-net-worth individuals who own their own plane or sometimes planes. They may have a fleet of aircraft. That's kind of the first category. Second category is corporate fleets. Those are companies that own, again, one or multiple aircraft for the business's use. The other is our smallest category, is a kind of a mixture of charter companies. We have a couple of government clients. Anyone else who uses the general aviation infrastructure system in business aviation. That's the business. It's acquire land, construct, and lease. We look to earn an unlevered yield of low to mid teens. We'll get into some of the unit economics in a future slide. I mentioned we are able to issue tax-exempt debt, very low cost of debt for us, and it drives our ROE at the project level into very attractive levels for equity holders, and we'll get into the numbers here in a few slides. Just a quick note on kind of the macro picture of business aviation. The middle picture kind of explains our business in one graphic. You can see, without fail, every year the size of the business aviation fleet is growing. If you take an aircraft, its wingspan, and it times its length, that's the area of an aircraft, and you add up all the aircraft in the fleet, that size of the square footage of the fleet is growing without fail every year. Driven by a couple things. One is the number of aircraft is increasing, so retirements have been slowing, and then new aircraft coming off the manufacturing line by the manufacturers like Gulfstream and Bombardier and others is increasing. The number of aircraft is increasing. Importantly, the average size is increasing. Those bottom red bars represent aircraft that have a tail height of greater than 24 ft. That's kind of our proxy for your biggest Gulfstreams and Bombardiers. That is increasing faster than the size of the total fleet. On the demand side. On the supply side, hangar development has not kept up with that increase in aircraft square footage. New airports aren't being constructed. We always joke that the most recent airport to be constructed serving a major metropolitan area was the Denver International Airport in the early 1990s. It's been decades since a new airport has been built serving a major city. Where you need an airport, you can't build one, and where you can build one, you don't really need it. Airports, where they were constructed in the 1930s and 1940s is where they will forever be. It's really beachfront property, and we're in a race to try to get as much as it as we can. That's on the actual land. On the hangar side, traditionally, airports have partnered with companies called FBOs or fixed-base operators, which I'll get to in a little bit. FBOs are fundamentally in the fuel business. It's an industry that's been around for decades. It's a good business, a high cash flow generating business, but their focus is on fuel sales, not on hangar rent. The airport typically mandates that they build a certain minimum of hangar space in exchange for the right to sell that fuel, but the FBO only builds that minimum. Again, they're in the fuel business. You can't fuel an aircraft in a hangar. They only build that minimum that they have to. For much of business aviation's life, it's been enough. The industry has really only come into its own based on that chart that I showed you in kind of the last 10- 15 years. 20, 30, 40 years ago, when business aviation was much smaller, only FBO hangars being on airports was sufficient. With the growth in the aircraft square footage we've seen over the last 15 years, FBOs are no longer sufficiently building enough hangar space to house all these aircraft. Again, that's the dynamic that Tal saw 10 years ago when he was operating his own airport. That's what led him to start Sky Harbour. We're now partnering with these airports to bring generally the most amount of hangar space that they've seen in their life. Each airport we come onto, we're building generally at least 100,000 sq ft of hangar space, which sometimes drastically increases the amount of hangar on an airport. The airports are very happy to see it because it draws new aircraft to their airports. This is just a quick slide on how we're differentiated from those FBOs that I mentioned. Again, fixed-base operators, an industry that's been around for decades, but they're focused on fuel sales, not just to the aircraft based at an airport, but importantly to aircraft that are visiting the airport, those transient aircraft coming in to buy fuel. That's really what FBOs cater to. We call ourselves a home-base operator, where we cater to only the clients and aircraft that are housed with us. Where an FBO may have dozens, sometimes hundreds of operations a day, whether that's towing, fueling, and getting aircraft ready to go, we may have a fraction of that. A busy day for us at our Miami campus may be 10 operations. On average, maybe even less than that, call it three or four a day. Our operational footprint is much lower, and from a client perspective, it's much better to be based with us than at an FBO because we're much more responsive, we're much quicker at providing services, and we're much more private and secure. An FBO, it's technically a public terminal when you go into an FBO terminal that's serving an airport. With us, you have your own dedicated spot in the hangar, and it's your hangar to control. It's just the amount of privacy and security as compared to what a client would have with basing at an FBO is significantly different. Site acquisition. This is the race we're in right now that I mentioned, because they're not creating new airport land out of thin air. Of the remaining land on airports around the country, it's that land that we're trying to get under ground lease. The map you see on the right there, those are the 23 ground leases that we currently have under our control. The green circles represent where we're in operation. That's everywhere from Miami, Opa-locka in Florida there to San Jose, California on the West Coast, and various airports in between. The yellow ones are where we're under construction. That's Orlando Executive in Florida, up to the northeast, including Bradley in Hartford, and then out west to Salt Lake City in Utah. The ones in blue are the ones where we have either signed or announced ground lease, but are in various stages of permitting and regulatory processes to get ready for construction. The strategies on the left I won't get too deep into, the two main ways we get on there are via RFP or a request for proposal. That's where an airport puts out to the public requests for development of a certain parcel of land. Sometimes we actually initiate these RFPs where we inquire about a certain portion of land. The airport feels that they need to put out a proposal for other respondents to answer. The airports don't have to, but typically for political reasons, they feel like they have to. We win them that way via RFP. The majority of our airports is just going one-on-one with the airport authority to conform with their master plan for developing the airport, and getting into one-on-one conversations for entering into a ground lease. A lot more nuance there. I'm time-limited, I won't get too deep into the details, but happy to answer any questions on that at the end of the presentation. That's the land acquisition piece. Design and development. We've internalized a lot of the functions of the design and construction process over the last couple of years. We do prototyping. This is our new prototype hangar, where design is consistent across all of our various campuses, which just drives our unit cost for each one of these that we manufacture down. We do our own internal hangar manufacturing now. We own a company called Stratus Building Systems. That's a hangar manufacturer outside of Fort Worth in Texas. That factory floor is now retooled and configured exactly for Sky Harbour's hangars, driving down our unit costs at each one of these that we stamp out. The most recent effort over the last year has been the internalization of a lot of the design and construction functions actually needed to bring these things from the engineering stage to the ground up. We do our own architectural services in-house now. At a lot of our locations, do our own general contracting as well. Still certain regions we don't do, we still use third-party GCs in some regions of the country. For example, Orlando Executive, which I mentioned earlier, which is under construction, Salt Lake City, Addison phase II in Dallas. These are markets where our general contractor, called Ascend Aviation Services, is actually doing the general contracting ourselves. All this is in an effort to get our unit cost down. If we think in real estate terms, it's our NOI at the property level over our construction cost. That's our NOI yield. Getting that denominator down as low as possible is the name of the game. We've had a lot of success in internalizing these processes and getting that cost of construction down over time. Even in the face of the COVID-level inflation that we saw in 2022, and now increasing competition with things like data centers and other warehousing that we compete with. Lastly is the lease-up. I mentioned we provide fueling services. Fueling provides about 10%-15% of our total revenues, so it's becoming an increasingly important part of the business. The remaining 85% is still long-term contracted rent with our clients. We do the fueling and other services to get the aircraft out and ready to go. On the client side, I mentioned the three categories of clients that we have. Our target client lease is about three to five years. It's long enough where you have certainty of cash flows coming in over time, but it's also short enough where we can take advantage of pretty significant re-lease rates that we see at airports. One of the theses of the business is we think airport-level inflation is going to be much higher than CPI or other broader measures of inflation in the economy, just because of the constrained nature of these airports. We see that in our own data. Our re-lease rates have averaged north of 20% from a first-generation lease to a second-generation client lease. It's that dynamic that we're trying to take advantage of with shading shorter in the tenant re-lease rates. Kind of that three to five years is what a typical tenant lease looks like. We do have a couple longer ones, out to 10-15 years for the right client, really just a handful, though. We do also have a couple shorter ones, kind of one to two-year leases. Those are to get clients in when we're just doing initial lease-up of a campus to get aircraft and their principals used to our offering. That three to five-year range is where most of our client leases are from a time perspective. All right, financing. I mentioned the tax-exempt financing that we're able to do. One of the big efforts we've done in the last year has been raising our second round of debt financing. Our first debt financing we did in 2021. This was our first six airports under ground lease that are now completed and in operation. That first round of tax-exempt debt that we issued was long-term debt, so it was 33-year final, 25-year average life. It has a 10-year interest-only period, and then it has a sinking provision after that. By the end of that 33 years, it's fully paid off, mirroring essentially the, it's a little bit less, but kind of mirroring the ground lease length that we have. We issued that at 70/30 debt to equity, so 70% leverage, and that debt was issued at 4.18%. Even as an unrated issuer, this was 2021, interest rates were much lower back then, but even as an unrated issuer, we were able to issue sub 5% long-term debt capital for our construction. I'm just going to skip ahead to this slide. More recently, for our next plan of finance for our next seven projects, we shaded shorter on the debt, still tax-exempt which is important, we issued it, or we entered into a construction drawdown facility with JP Morgan that has a term of five years, where we can add airports over time to this construction facility and draw on JP Morgan to fund our construction. This was 65/35 debt to equity. We did a floating to fixed swap at 473, so that five-year financing we locked in at 473, still sub 5% at the five-year maturity. The big change we also did was in lieu of issuing equity for that additional 35% equity requirement, we actually issued a type of tax-exempt sub-debt that we're going to use in lieu of equity to draw on the JP Morgan facility. We issued the sub-debt. It kind of mirrors the same term. It's a five-year term. It's $150 million at 6%. Remember, still tax-exempt, still very low cost of debt capital for us. This increases our debt to equity ratio from that 65/35 that I mentioned to about 90/10. The sub-debt kind of took away a lot of the requirement to issue any additional equity for these projects, while still maintaining very robust projected cash flow levels into the future because of that low cost of capital. The sub-debt was a pretty transformational idea for us. We just closed that in the last few months, I think end of February. That, along with the JP Morgan facility, is what's going to fund our construction through 2027. Just going back to the unit economic slide and how the debt factors into this, that low cost of debt is a really powerful tool we use for our equity holders to drive our project level ROEs higher. On the left-hand side, this is what it used to look like with that first issuance of debt that I talked about a few years ago. On the revenue and then NOI side, we have about $45 per sq ft on average in revenue, $36 of NOI after OpEx. Once you factor in the cost of debt, it was about $25 of pre-tax income over an average development cost of $300 per sq ft. You can kind of see that $300 is divided 70/30 in that debt to equity from our first issuance there. Still very attractive ROE there into the 20s. What the sub-debt allowed us to do was drive that even higher. Still the same unit economics from a revenue and expense side. All this was now, instead of that 30% equity requirement, it's now at 10%. Even with the additional cost of debt interest, you have about $20 in income over that $30 in equity. It drives your project level ROEs into the 60s instead of into the 20s. The sub-debt with its kind of combined cost of capital with the JP Morgan facility of, it's really about 5% or 5.5%, very powerful tool for us as we fund these things going into the future. These are our current operational results. The big story here is, look, we're still in a ramp-up phase. This year, Let me take a step back. The name of the game is getting enough operational campuses at the project level, very profitable at the consolidated level, to cover our corporate expenses. We're now at a point where that's happening. This year we're going to be EBITDA positive. With all of those future airfields coming online, it's just a step function every quarter as we open up one or two of these campuses, where revenues increases and then eventually our EBITDA increases. If you look at our company on a backwards, looking back a couple of years, doesn't look good because we're so CapEx heavy, and we've been spending a lot of money getting these things up and operational. It's really looking out into 2027, 2028, 2029 as these 23 campuses get completed and come online that our cash flow generation is going to be increasing on a step function with each of those completed campuses. Development update, we won't get too into the details here, but again, it's that step function. You can see one or two airports every quarter are going to be completed, and it's just going to be additive to the bottom line as those get completed. Just a quick case study on our most recent completion. This is our first phase II completion. This Miami Opa-locka, was one of our first airports. That phase I was completed in 2023. Phase I has now been up and operational for a few years now, and we just completed phase II last month, where we got certificate of occupancy, and our new clients can move in. Really powerful phase II on two things. One is the revenue side. Because we had the phase I, stabilized, fully occupied, and had a nice wait list being generated, there was a lot of pent-up demand when we came back to the market with our phase II opening. You can see the bars on the bottom there. Our first leases in phase I in 2023 were signed at $32.50 per square foot. The final phase I lease was signed around $45 a square foot. That middle bar is the average phase I lease rate, of about $41. Phase II, with that pent-up demand I mentioned, the average lease rate is now north of $51 per square foot. The average phase II lease is higher than the highest phase 1 lease. Bringing that phase II online with that pent-up demand really shows the marketing power we have when we bring that phase II online. It's been interesting to see. That's on the revenue side. On the expense side, we almost doubled the amount of square footage of our hangar space in Miami. OpEx is not going to double on a per square foot basis because our operational footprint is so small that, I mentioned earlier, we may only have a handful of operations every day. We're going to actually service the phase I and the phase II without a doubling of our crew there. On a per square foot basis, the OpEx actually sees significant economies of scale, and doesn't grow commensurate with the doubling of the square footage. We see an increase in the revenue side, and then actually on a per square foot basis, a decrease in the OpEx. Both ends, we've seen the power of bringing a phase II online, which has been really positive to see. With that was just a small case study on our most recently operated, or opened, phase II. I see we have about a little over five minutes left. I'll open it up to any questions. Yep. What's the most competitive aspect of your numbers? Where do you have to really sharpen your pencil to do what you want to do? It's been in the construction and development side, most recently. I talked about the COVID-era inflation. We saw a lot of inflation from 2022-2023. Just put some numbers on it. Sugar Land was our first airport, outside of Houston. We inked the GMP there in 2019, just prior to COVID. We built Sugar Land for $156 per square foot. That average we're building at now at $300 just shows you how far we've come. Miami phase I and Nashville International, those were airports number two and three. We built those for the low $200s. Just from a market perspective, getting our construction costs under control with all the efforts that I talked about has really been a focus of Tal and our senior team, over the last few years. Had some success with that. Really it was keeping it at that $300 per square foot range. We're seeing below that now in certain markets, $240, $250 hard costs. Now we have to layer on some soft costs, but still all in lower than that $300. Have had a lot of success with it, but it's trying to swim against the current, if you will. That's going to be one of the hardest parts of the business is keeping construction costs under control. Yeah. Once you get the 23 airports Do you think you'll be in a position to start paying something to shareholders? You think this is going to be a story of there'll be another 30, 50, 100 more? What is the end game? Yeah, I realized I forgot to say the earlier question there. This question is about the end game of the company. Once we get to 23, where is future growth going to take us? We're not content stopping at 23. We publicly say 50 by the end of the decade is somewhere where we'd want to be. Again, no real reason to even stop there. Once we get these 23 up and operational, that's going to be the 2028, 2029 timeframe. That's going to be the point where I think we start considering a return of capital to shareholders. These are still very capital-intensive businesses. Now, we've had a lot of success with raising cheap debt, so that cuts down on our future equity costs. We think the future growth of these campuses is worth retaining internally generated cash flows certainly for the short term, until we're really at a scale where we can start structuring the business in a different way. What does that look like? When we're fully constructed and stabilized and we're not adding new airports, say, past that 50 at a very fast pace, we could entertain looking like a REIT. I don't know. There's a couple of different ways, but probably the shareholder return, actual cash return, is still some years away. Yep. The other question I had is, Boston Omaha owns a big chunk of you. Is there some sort of standstill agreement or something that could close, or could they exit at any point? Because that would be a heavy amount of stock out there. The question was, Boston Omaha, big shareholder, could they exit at any time? The answer is yes. They were the SPAC sponsor by which we went public with in 2022, so still a significant shareholder. They have indicated in the last year, and you can see in their filings, have sold some shares for liquidity to get other parts of the business. They haven't sold any recently, which we've been happy about. We're hoping that holds. They're not bound by any lock-up or anything like that. We still think they're going to be a significant long-term investor. I don't know their plans exactly on raising liquidity. There's a question on CapEx. Yep. It seems to have been relatively high. As you bring in the 23 airports, they'll start cash flowing. What is the kind of maintenance CapEx to operate one of the airports, or think about that on a percentage of sales basis or something. Secondly, really when do you start to get to positive cash flows if you're going to go to 23 and then to 50? If I look at your free cash flow, you'll have, say, 15 and then 20 cash flowing airports. What are you going to continue to spend? How should I think about the total CapEx? The expansion and the maintenance. The question was about maintenance CapEx and then future CapEx as we continue to grow. Maintenance CapEx, pretty small right now. All of our campuses, even Sugar Land, I mentioned, it was our first one, not even five years old yet. Not a significant part of any spend right now. Internally, it's maybe 1% or 2% of sales dedicated to maintenance CapEx. Again, it's pretty small right now. It's mostly door maintenance and a floor resurfacing if a new tenant moves in or something like that. The structures themselves, they're fairly simple. We don't foresee any major maintenance CapEx in the foreseeable future. Going forward, on a consolidated basis, we're going to be cash flow positive this year. As I just mentioned in a previous answer, we'll likely maintain internally generated cash flows for future CapEx going forward because as we get to 23, even out to 50, kind of rough numbers, let's say each campus average is $40 million total, and let's say we do that 90/10 split that I talked about, $4 million in equity per campus. As we get out to 50 from our 23 now, I'll just use round numbers, 30 additional campuses times the $4 million, that's $120 million, could be more if we go beyond 50, in equity required. It could be a mix of either additional equity issuance or that internally generated cash flows. I think a lot of that will depend on the stock price, and it'll be a balance figuring that out. I would think to get to the point of being able to do a REIT conversion, let me just start doing the math in my head. It's still years away How many to issue m arket storage are have a good equity balance as a REIT. Right. Yeah. That's probably still some years away. Exactly. Okay. Yep. Another question. The quality of the airports. You have Bradley, which is a general airport, it has airlines, and then you also have airports that are only general aviation. How much does it impact the cost of the lease to be in a bigger airport versus a smaller airport? Not too much dispersion in actual. Sorry, the question was the type of airport we're in, a bigger airport that services commercial aircraft as well versus just a general aviation airport. Not too much dispersion in actual ground rents. Our cheapest ground rent is, and this is on a gross square footage basis, our cheapest is in Miami, which is in the $0.40 per square foot. Our most expensive is in, I think, Dulles, it's like $1.10 or $1.15 per square foot. Almost every airport is in the $0.50 to a $1 range, somewhere in there, on a gross per square foot basis. No real difference between whether an airport services commercial aviation or not in terms of that ground lease cost. It's mostly just a function of more in-demand airports tend to be a little bit higher, but again, all within that range. Really nothing to do with the commercial side of the house. You have a monopoly, or could there be another hangar for a competitor? Yeah, the question is if we have a monopoly or if competitors come in. If there's land available that the airport is willing to give to another developer, we could see someone come in. A lot of times at our airports is the airport designates a certain area of the airport for general aviation hangars, like us, but then they also designate part of the airport for logistics, they designate part of it for future commercial expansion, and terminal usage. There are a lot of times in the airport where we actually take the last land available dedicated to general aviation hangars. Yes, theoretically, yes, someone could come in and do that. We've seen one-off real estate developers do that at single airports around the country, but we haven't seen anyone doing it at multiple airports like we are yet. Our close competitors are still basically the FBOs who have hangar space and lease out to tenants, but no direct competitors on a national scale yet. Yep. I believe you mentioned a 20% re-lease rate. I would've thought it would've been higher than that. The question was about re-lease rates. Yeah, on average it's about 20%. I hope we can get higher than that. Yep. If somebody has an aircraft at a specific airport, I would think it would stay there for a much longer period of time. It does. Yeah. There is a limit. If we raise it too much, we'll lose our base clients to FBOs or another airport or something like that. We need to be careful of too much. I guess that's how much you raised the rent. Yes. I actually thought it was a rent renewal, the lease renewal rate would be much higher than 20%. Oh, yes. Yes. Sorry. The rent level renewal rate is that increase in rent of 20%, correct. The lease renewal rate is not 100%, but I want to say it's maybe 85%, 90%. Yes, almost all of our clients who renew end up staying. There are certainly some that end up leaving because they move and need to move. Obviously, it's an aircraft, it can travel with you. We do lose a few from here or there. Sometimes we'll lose a charter client who maybe overexpanded and doesn't need the hangar anymore. No, for the most part, yes. Most of our clients stay with us. Correct. Great. Thank you so much for your time.