FTAI Aviation(FTAI)2025-03-03 22:06Financial 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[194]. - Aerospace products revenue growth was primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B, and V2500 engine and module sales[194]. - Lease income rose by $47.4 million, attributed to a $37.3 million increase in engine lease revenue and a $17.5 million increase in aircraft lease revenue[194]. - Total expenses increased by $665.9 million to $1,497.1 million, with significant contributions from cost of sales and operating expenses[196]. - Net income from continuing operations decreased by $235.1 million, resulting in a net income of $8.7 million in 2024[197]. - Adjusted EBITDA increased by $264.8 million to $862.1 million, reflecting improved operational performance[198]. - 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[209]. - Net income attributable to shareholders decreased by $81.4 million to $210.2 million in 2024 from $291.6 million in 2023[212]. - Net income attributable to shareholders increased to $346.3 million in 2024, up from $180.2 million in 2023, representing a growth of 192%[220]. - Adjusted EBITDA rose to $380.6 million in 2024, a significant increase of $220.6 million compared to $160.0 million in 2023, marking a growth of 138%[220]. Asset Management - As of December 31, 2024, the company had total consolidated assets of $4.0 billion and total equity of $81.4 million[173]. - The company owned and managed 421 aviation assets, including 109 commercial aircraft and 312 engines as of December 31, 2024[205]. - The insured value of aircraft and engines remaining in Russia is $210.7 million, with uncertain timing and amounts for potential recoveries[177]. - Asset sales revenue decreased by $111.0 million, with three aircraft and 14 engines sold in 2024 compared to 13 aircraft and 41 engines in 2023[194]. Strategic Initiatives - On August 1, 2022, the company completed a spin-off of FTAI Infrastructure, resulting in a dividend of $730.3 million used to repay outstanding borrowings[180]. - The company launched a Strategic Capital Initiative on December 30, 2024, focusing on acquiring 737NG and A320ceo aircraft through partnerships[183]. - The company expects to provide aircraft management services and make minority investments in future partnerships under the Strategic Capital Initiative[183]. - Acquisition of LMCES in September 2024 aimed to enhance manufacturing capabilities for aircraft engines[218]. Expenses and Liabilities - Total expenses increased by $206.7 million, with cost of sales rising by $253.7 million primarily in the Aerospace Products segment[200]. - Interest expense increased by $60.1 million, reflecting a rise in average debt outstanding of approximately $779.3 million[199]. - The provision for income taxes increased by $65.3 million, reflecting higher tax obligations due to increased income from leasing and aerospace activities[196]. - Total expenses increased by $287.4 million, primarily due to a $300.0 million internalization fee to an affiliate effective May 28, 2024[235]. - As of December 31, 2024, the company had outstanding principal and interest payment obligations of $3.5 billion and $1.4 billion, respectively, with only $229.8 million in interest payments due in the next twelve months[260]. Cash Flow and Investments - Cash used for investments was $1,526.2 million in 2024, compared to $861.5 million in 2023[249]. - Cash flows from operating activities were $(136.5) million in 2024, a decrease from $163.0 million in 2023[256]. - Proceeds from the sale of assets were $969.3 million in 2024, up from $477.9 million in 2023[256]. - Net cash provided by financing activities increased by $399.6 million, driven by proceeds from debt of $1,630.2 million and maintenance deposits of $19.0 million, partially offset by debt repayment of $1,067.3 million and redemption of preferred shares of $105.4 million[257]. Management and Operational Changes - The company internalized its management function on May 28, 2024, eliminating management fees to the Former Manager[174]. - The company entered into a Transition Services Agreement with the Former Manager, requiring services until October 31, 2024, with a fee structure based on costs plus a 10% markup[175]. - The company anticipates operational cost savings following the internalization of management functions on May 28, 2024[253]. Taxation and Interest Rate Risk - The provision for income taxes increased by $69.2 million, primarily due to higher income from leasing activities in taxable jurisdictions[211]. - Interest rate risk is a significant exposure, with borrowing agreements generally requiring payments based on a variable interest rate index, such as SOFR[278]. - A hypothetical 100-basis point increase/decrease in the variable interest rate on borrowings would not have increased or decreased interest expense over the next 12 months[280].