FTAI AVIATION(FTAIM) - 2023 Q3 - Quarterly Report

Financial Performance - Lease income for Q3 2023 was $45.6 million, down 10.2$50.2 million in Q3 2022; however, lease income for the nine months ended September 30, 2023, increased by 24.8% to $161.1 million from$129.2 million in the same period of 2022[143] - Maintenance revenue surged by 80.0% in Q3 2023 to $63.9 million compared to$35.5 million in Q3 2022, and for the nine months, it rose to $141.1 million from$112.2 million, a 25.8% increase[143] - Aerospace products revenue increased by 100.6% in Q3 2023 to $107.1 million from$53.4 million in Q3 2022, and for the nine months, it rose to $260.3 million from$94.2 million, a 176.5% increase[143] - Total revenues for Q3 2023 were $291.1 million, a 26.4$230.4 million in Q3 2022; for the nine months, total revenues reached $858.2 million, up 97.8$434.1 million in the same period of 2022[143] - Net income for Q3 2023 was $41.3 million, compared to a net loss of$18.9 million in Q3 2022, representing a turnaround of $60.2 million; for the nine months, net income was$125.5 million, compared to a net loss of $238.8 million in the same period of 2022[143] Expenses and Costs - Total expenses for Q3 2023 were$246.6 million, an increase of 17.9% from $209.1 million in Q3 2022; for the nine months, total expenses rose to$724.3 million from $624.3 million, a 16.0$37.5 million for the three months ended September 30, 2023, primarily due to higher Cost of sales, Operating expenses, and Depreciation and amortization[152] - Cost of sales increased by $246.8 million for the nine months ended September 30, 2023, primarily due to an increase in asset sales and Aerospace Products sales[155] - Total expenses rose by$32.8 million (94.5%) and $100.4 million (157.7$2.5 million (71.3%) and $4.7 million (58.0$2.6 billion, with total equity of $95.1 million[129] - As of September 30, 2023, the Aviation Leasing segment owned and managed 351 aviation assets, including 92 commercial aircraft and 259 engines[162] - The aviation equipment was approximately 77$138.1 million for the nine months ended September 30, 2023, reflecting an increase in net income of $364.3 million[197] - Cash used for investments was$562.8 million during the nine months ended September 30, 2023, compared to $545.7 million in the same period of 2022[196] - Total principal repayments in connection with the Revolving Credit Facility were$330.0 million during the nine months ended September 30, 2023[196] - The company had outstanding principal and interest payment obligations of $2.3 billion and$0.5 billion, respectively, as of September 30, 2023[201] - The company expects to meet future short-term liquidity requirements through cash on hand and unused borrowing capacity[204] Impairments and Charges - The company recognized an impairment charge of $120.0 million related to leasing equipment assets due to the impact of sanctions on Russian airlines[130] Mergers and Spin-offs - The spin-off of FTAI Infrastructure resulted in a dividend of$730.3 million, which was used to repay outstanding borrowings, including $200.0 million of senior unsecured notes[134] - The merger with FTAI LLC on November 10, 2022, resulted in FTAI Aviation Ltd. becoming a Cayman Islands exempted company, enhancing its operational structure[136] Interest Rate Sensitivity - As of September 30, 2023, a hypothetical 100-basis point increase/decrease in the variable interest rate on borrowings would result in an increase or decrease of approximately$2.5 million in interest expense over the next 12 months[212] - The sensitivity analysis regarding interest rate changes is based on a single point in time and does not account for complex market reactions[211] - The analysis does not include the impact of interest rate derivatives or other potential factors affecting the business due to interest rate changes[211] - The Series A and Series B preferred shares will accrue interest at a floating rate starting from September 15, 2024[211]