FORTRESS TRSP(FTAIN) - 2024 Q4 - Annual Report

Financial Performance - Total revenues increased by $564.0 million to$1,734.9 million in 2024, driven by a $624.9 million increase in aerospace products revenue[195]. - Net income from continuing operations decreased by$235.1 million, resulting in a net income of $8.7 million in 2024[198]. - Adjusted EBITDA increased by$264.8 million to $862.1 million, reflecting improved operational performance[199]. - Net income attributable to shareholders decreased by$81.4 million to $210.2 million in 2024 from$291.6 million in 2023[215]. - Net income attributable to shareholders rose to $346.3 million in 2024, up from$180.2 million in 2023, reflecting a $166.2 million increase[227]. - Adjusted EBITDA increased by$220.6 million to $380.6 million in 2024, compared to$160.0 million in 2023[228]. - Adjusted EBITDA for the corporate segment was $(18.6) million in 2024, an improvement from$(30.1) million in 2023[237]. Revenue Breakdown - Aerospace products revenue growth was primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B, and V2500 engine and module sales[195]. - Aerospace products revenue surged to$1,079.8 million in 2024, up from $455.0 million in 2023, marking a significant increase of$624.9 million[222]. - Total revenues decreased by $53.2 million, with asset sales revenue dropping by$111.0 million due to fewer sales transactions of commercial aircraft and engines[212]. - Lease income increased by $54.7 million, driven by a$37.3 million rise in engine lease revenue and a $17.5 million increase in aircraft lease revenue[212]. - Maintenance revenue increased by$9.5 million, with engine maintenance revenue rising by $43.2 million, partially offset by a$32.7 million decrease in aircraft maintenance revenue[212]. Expenses and Costs - Total expenses increased by $665.9 million to$1,497.1 million, with significant contributions from cost of sales and acquisition expenses[197]. - Total expenses increased by $206.7 million, with cost of sales rising by$253.7 million, primarily in the Aerospace Products segment[201]. - Total expenses increased by $406.1 million in 2024, with a significant rise in cost of sales by$393.6 million[226]. - Interest expense increased by $60.1 million, reflecting an increase in average debt outstanding of approximately$779.3 million[200]. - The provision for income taxes increased by $65.3 million, reflecting higher tax obligations due to increased income from leasing and aerospace activities[197]. Asset Management - As of December 31, 2024, the company had total consolidated assets of$4.0 billion and total equity of $81.4 million[175]. - The Aviation Leasing segment owns and manages aviation assets, while the Aerospace Products segment develops and manufactures aircraft engines and components[186]. - As of December 31, 2024, the Aviation Leasing segment managed 421 aviation assets, with 94 commercial aircraft and 181 engines leased to operators[207]. - The insured value of aircraft and engines remaining in Russia is$210.7 million, with uncertain timing and amount of recoveries under insurance policies[179]. - Proceeds from the sale of assets were $969.3 million in 2024, significantly higher than previous years[260]. Strategic Initiatives - The company launched a Strategic Capital Initiative on December 30, 2024, focusing on acquiring 737NG and A320ceo aircraft[185]. - The company expects to provide aircraft management services and make minority investments in future partnerships under the Strategic Capital Initiative[185]. - The company launched a Strategic Capital Initiative in December 2024 to maintain an asset-light business model while acquiring on-lease aircraft[251]. Management and Internalization - The company internalized its management function on May 28, 2024, eliminating management fees to the Former Manager[176]. - The company entered into a Transition Services Agreement with the Former Manager to provide services until October 31, 2024[177]. - The company anticipates operational cost savings following the internalization of management functions effective May 28, 2024[256]. Financing and Liquidity - The company issued$500.0 million in senior unsecured notes due 2033, using proceeds to redeem $130.5 million of Senior Notes due 2027 and pay down the Revolving Credit Facility[250]. - Net cash provided by financing activities increased by$399.6 million, primarily due to proceeds from debt of $1,630.2 million and maintenance deposits of$19.0 million[261]. - The company expects to meet future short-term liquidity requirements through cash on hand, unused borrowing capacity, and net cash from current operations[267]. - Outstanding principal and interest payment obligations as of December 31, 2024, total $3.5 billion and$1.4 billion, respectively, with $229.8 million due in the next twelve months[264]. Taxation - The provision for income taxes increased by$69.2 million, reflecting higher tax obligations from increased income in taxable jurisdictions[214]. - The benefit from income taxes increased by $65.1 million, primarily due to the establishment of a deferred tax asset of$72.2 million[203]. - The provision for income taxes increased by $46.7 million in 2024, correlating with the growth in income from Aerospace Products activities[226]. Impairments and Losses - The company recognized an impairment charge of$120.0 million for leasing equipment assets due to the impact of Russia's invasion of Ukraine[178]. - Net loss attributable to shareholders from continuing operations was $588.7 million in 2024, compared to a loss of$259.8 million in 2023[236]. - Net loss increased by $320.0 million, primarily due to increased expenses and interest costs[241]. Interest Rate Risk - Interest rate risk is present due to variable interest rate agreements, with potential increases in interest rates impacting net income[281]. - A hypothetical 100-basis point increase/decrease in variable interest rates would not have affected interest expense over the next 12 months[284].