Financial Performance - Total revenues for the year ended December 31, 2022, were $708.4 million, a 111% increase from $335.6 million in 2021[194] - Total expenses for 2022 were $870.9 million, up from $419.2 million in 2021, reflecting a significant increase in costs[194] - Net loss attributable to shareholders for 2022 was $220.4 million, compared to a net loss of $129.0 million in 2021[194] - Adjusted EBITDA increased by $105.3 million, reflecting improved operational performance despite rising expenses[213] - The company reported a net income of $60.9 million for 2022, down from $140.7 million in 2021, reflecting a decrease of $79.8 million[230][231] Revenue Breakdown - Total revenues increased by $372.8 million in 2022, driven by higher asset sales revenue, aerospace products revenue, maintenance revenue, and lease income[197] - Asset sales revenue rose by $208.5 million, primarily due to increased sales of commercial aircraft and engines in the Aviation Leasing segment[197] - Aerospace Products revenue increased by $130.2 million, attributed to higher sales of CFM56-7B and CFM56-5B engines and related components[198] - Maintenance revenue grew by $20.0 million, supported by a higher number of aircraft and engines leased and increased utilization[199] - Total revenues for the Aviation Leasing segment increased by $229.8 million to $527.9 million in 2022, driven by a $208.5 million increase in asset sales revenue and a $20.0 million increase in maintenance revenue[230][232] Expenses and Losses - Total expenses increased by $451.7 million, mainly due to higher costs of sales, asset impairment charges, and operating expenses[203] - Asset impairment charges surged by $126.8 million, primarily due to write-downs of aircraft and engines in Ukraine and Russia[204] - Total expenses increased by $340.2 million to $524.1 million, primarily due to increases in cost of sales, asset impairment, operating expenses, and depreciation and amortization[233][242] - Total expenses rose by $81.6 million, mainly due to increased costs of sales and operating expenses[248] - Total expenses in the Corporate and Other segment increased by $29.9 million, mainly due to higher interest expenses and operating costs[260] Corporate Actions - The company completed a spin-off of FTAI Infrastructure on August 1, 2022, which included a dividend payment of $730.3 million to the company[185] - The merger with FTAI Aviation Ltd. was completed on November 10, 2022, resulting in FTAI becoming a subsidiary of the company[188] - The company has two reportable segments: Aviation Leasing and Aerospace Products, following the spin-off of FTAI Infrastructure[189] Asset Management - As of December 31, 2022, the Aviation Leasing segment managed 330 aviation assets, including 106 commercial aircraft and 224 engines[227] - The number of aircraft in the leasing segment decreased from 108 to 106, while the number of engines increased from 207 to 224[228] - As of December 31, 2022, the aviation equipment utilization rate was approximately 71%, with a weighted average remaining lease term of 42 months for aircraft and 11 months for engines[228] Tax and Provisions - The company recognized approximately $47.1 million in provision for credit losses due to sanctions related to Russia's invasion of Ukraine[180] - The provision for income taxes increased by $2.2 million, primarily due to higher provisions in the Aerospace Products segment[209] Cash Flow and Investments - Cash used for investments was $831.5 million in 2022, compared to $1.5 billion in 2021 and $597.5 million in 2020[278] - Distributions to shareholders, including cash dividends, were $155.6 million in 2022, up from $142.8 million in 2021 and $131.4 million in 2020[278] - Net cash provided by financing activities decreased by $1.5 billion, primarily due to a decrease in proceeds from debt of $2.1 billion[284] - Cash flows from operating activities were $(20.7) million in 2022, compared to $(22.0) million in 2021 and $63.1 million in 2020[281] Market Risks - Interest rate risk exposure is significant, with a hypothetical 100-basis point change in variable interest rates potentially impacting interest expense by approximately $1.5 million over the next 12 months[310] - The company is exposed to market risks from fluctuations in interest rates and foreign exchange rates, which could affect operations and cash flows[305] Accounting and Revenue Recognition - The company recognizes asset sales revenue primarily from the sale of aircraft and aircraft engines, with revenue recorded when control is transferred to the customer[297] - Aerospace Products revenue includes sales of repaired CFM56-7B and CFM56-5B engines, engine modules, and spare parts, recognized upon transfer of control[298] - Maintenance payments from lessees are typically required monthly and are based on aircraft utilization, with reimbursements recorded against maintenance deposit liabilities[299][300] - The company assesses the recoverability of long-lived assets based on future undiscounted cash flows, adjusting carrying values if they do not meet recoverability tests[302][303]
FTAI AVIATION(FTAIM) - 2022 Q4 - Annual Report