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FORTRESS TRSP(FTAIN) - 2024 Q1 - Quarterly Report
FTAINFORTRESS TRSP(FTAIN)2024-04-26 20:16

Financial Performance - Total revenues for the three months ended March 31, 2024, increased by 34.0millionto34.0 million to 326.7 million compared to 292.7millionin2023[129]−Aerospaceproductsrevenuesurgedby292.7 million in 2023[129] - Aerospace products revenue surged by 103.9 million, primarily driven by increased sales of CFM56-7B, CFM56-5B, and V2500 engines[130] - Maintenance revenue rose by 10.6millionduetoahighernumberofaircraftandenginesplacedonlease[130]−Totalexpensesincreasedby10.6 million due to a higher number of aircraft and engines placed on lease[130] - Total expenses increased by 21.5 million, driven by higher depreciation and amortization, interest expense, and acquisition expenses[132] - Adjusted EBITDA for the three months ended March 31, 2024, increased by 36.4millionto36.4 million to 164.1 million compared to 127.7millionin2023[140]−NetincomeattributabletoshareholdersforthethreemonthsendedMarch31,2024,was127.7 million in 2023[140] - Net income attributable to shareholders for the three months ended March 31, 2024, was 31.3 million, an increase of 8.7millionfrom8.7 million from 22.6 million in 2023[128] Aviation Leasing Segment - As of March 31, 2024, the Aviation Leasing segment managed 380 aviation assets, including 103 commercial aircraft and 277 engines[141] - Total revenues for the Aviation Leasing segment decreased by 63.7millionto63.7 million to 135.3 million, primarily due to a 70.1milliondecreaseinassetsalesrevenue[143][146]−Maintenancerevenueincreasedby70.1 million decrease in asset sales revenue[143][146] - Maintenance revenue increased by 10.6 million, driven by a higher number of aircraft and engines placed on lease and increased utilization[150] - Total expenses decreased by 50.2millionto50.2 million to 89.9 million, mainly due to a 60.3millionreductionincostofsales[147]−NetincomeattributabletoshareholdersfortheAviationLeasingsegmentdecreasedby60.3 million reduction in cost of sales[147] - Net income attributable to shareholders for the Aviation Leasing segment decreased by 15.2 million to 42.6million[149]−AdjustedEBITDAfortheAviationLeasingsegmentdecreasedby42.6 million[149] - Adjusted EBITDA for the Aviation Leasing segment decreased by 2.7 million to 104.8million[152][160]AerospaceProductsSegment−AerospaceProductssegmentrevenueincreasedby104.8 million[152][160] Aerospace Products Segment - Aerospace Products segment revenue increased by 103.9 million to 189.1million,primarilyduetoincreasedsalesofCFM56−7B,CFM56−5B,andV2500engines[154][156]−TotalexpensesintheAerospaceProductssegmentroseby189.1 million, primarily due to increased sales of CFM56-7B, CFM56-5B, and V2500 engines[154][156] - Total expenses in the Aerospace Products segment rose by 61.6 million to 119.6million,largelyduetoincreasedcostsofsalesandoperatingexpenses[157]−NetincomeattributabletoshareholdersintheAerospaceProductssegmentincreasedby119.6 million, largely due to increased costs of sales and operating expenses[157] - Net income attributable to shareholders in the Aerospace Products segment increased by 41.4 million to 66.4million[159]−AdjustedEBITDAfortheAerospaceProductssegmentincreasedby66.4 million[159] - Adjusted EBITDA for the Aerospace Products segment increased by 42.9 million to 70.3million[152][160]ImpairmentandUtilization−Thecompanyrecognizedanimpairmentchargeof70.3 million[152][160] Impairment and Utilization - The company recognized an impairment charge of 120.0 million related to leasing equipment assets in Russia due to the ongoing conflict[119] - As of March 31, 2024, the aviation equipment utilization rate was approximately 78%, with a weighted average remaining lease term of 44 months for aircraft and 19 months for engines[142] Tax and Interest Expenses - The provision for income taxes increased by 2.0millionduetoareductioninadeferredtaxassetrelatedtoataxlawchangeinBermuda[151]−Interestexpenseroseby2.0 million due to a reduction in a deferred tax asset related to a tax law change in Bermuda[151] - Interest expense rose by 8.4 million, reflecting an increase in average debt outstanding of approximately 417.1million[173]CashFlowandInvestments−Cashusedforinvestmentswas417.1 million[173] Cash Flow and Investments - Cash used for investments was 303.0 million in Q1 2024, compared to 167.0millioninQ12023[174]−Netcashprovidedbyoperatingactivitiesdecreasedby167.0 million in Q1 2023[174] - Net cash provided by operating activities decreased by 39.0 million to (0.3)millioninQ12024[175]−AsofMarch31,2024,thecompanyhadoutstandingprincipalandinterestpaymentobligationsof(0.3) million in Q1 2024[175] - As of March 31, 2024, the company had outstanding principal and interest payment obligations of 2.7 billion and 0.7billion,respectively[178]−Thecompanyexpectstomeetfutureshort−termliquidityrequirementsthroughcashonhand,unusedborrowingcapacity,orfuturefinancings[181]−Ahypothetical100−basispointincreaseinvariableinterestrateswouldresultinanincreaseofapproximately0.7 billion, respectively[178] - The company expects to meet future short-term liquidity requirements through cash on hand, unused borrowing capacity, or future financings[181] - A hypothetical 100-basis point increase in variable interest rates would result in an increase of approximately 1.8 million in interest expense over the next 12 months[189] Offshore Energy Business - Total revenues decreased by 6.2millionto6.2 million to 2.3 million in Q1 2024, primarily due to a decrease in the Offshore Energy business as one vessel was off-hire[164] - Total expenses increased by 10.1millionto10.1 million to 72.0 million, driven by higher interest expense, acquisition and transaction expenses, and management fees[165] - Net loss attributable to shareholders increased by 17.5millionto17.5 million to 77.7 million in Q1 2024[167] - Adjusted EBITDA decreased by 3.7millionto3.7 million to (10.98) million, reflecting the changes in revenues and expenses[168]