Financial Performance - Total revenues for the three months ended March 31, 2023, were $292.7 million, an increase of $201.0 million compared to $91.7 million in the same period of 2022 [140]. - Adjusted EBITDA for the three months ended March 31, 2023, was $127.7 million, an increase of $82.7 million from $45.0 million in Q1 2022 [141]. - The company reported a net income attributable to shareholders of $22.6 million for Q1 2023, a turnaround from a net loss of $229.7 million in Q1 2022 [140]. - Net income from continuing operations increased by $208.4 million, reflecting the changes in revenue and expenses noted above [151]. - The company reported a net income of $25.0 million in the Aerospace Products segment, an increase of $12.1 million from the previous year [168]. Revenue Breakdown - Lease income increased by $16.7 million to $56.0 million in Q1 2023 from $39.3 million in Q1 2022 [140]. - Aerospace products revenue surged by $70.8 million to $85.1 million in Q1 2023, compared to $14.3 million in Q1 2022 [140]. - Total revenues increased by $201.0 million, driven by higher asset sales revenue, aerospace products revenue, lease income, and other revenue [143]. - Asset sales revenue rose by $108.7 million, primarily due to increased sales of commercial aircraft and engines in the Aviation Leasing segment [143]. - Aerospace products revenue for the segment reached $85.1 million, a significant increase of $70.8 million compared to the previous year [168]. - Total Aerospace Products revenue increased by $70.8 million, driven by higher sales of CFM56-7B and CFM56-5B engines [171]. Expenses and Impairments - Total expenses decreased by $26.0 million, attributed to lower asset impairment charges, operating expenses, and interest expense [146]. - Total expenses in the Aerospace Products segment increased by $47.2 million, driven by higher cost of sales and operating expenses [168]. - Asset impairment decreased by $121.6 million primarily due to the write-down of aircraft and engines located in Ukraine and Russia [169]. - Operating expenses decreased by $47.4 million, mainly due to lower provisions for credit losses and professional fees [169]. - Total expenses increased by $47.2 million, primarily due to higher costs of sales and operating expenses [172]. Cash Flow and Investments - Net cash provided by operating activities increased by $36.8 million, reflecting an increase in net income [186]. - Cash used for investments decreased to $167.0 million from $284.4 million year-over-year [184]. - Proceeds from the sale of assets were $153.7 million, up from $54.4 million in the previous year [184]. Debt and Liquidity - As of March 31, 2023, the company had outstanding principal and interest payment obligations of $2.1 billion and $0.6 billion, respectively [192]. - Interest expense decreased by $4.8 million due to a reduction in average outstanding debt [183]. - The company declared cash dividends of $125.7 million on ordinary shares and $27.2 million on preferred shares over the last twelve months [194]. - Future short-term liquidity requirements are expected to be met through cash on hand, unused borrowing capacity, and net cash from current operations [195]. Interest Rate and Market Risks - As of March 31, 2023, a hypothetical 100-basis point increase/decrease in variable interest rates would result in an increase or decrease of approximately $0.8 million in interest expense over the next 12 months [203]. - The company amended its revolving credit facility to incorporate SOFR as the successor rate to LIBOR due to LIBOR's phase-out [200]. - Interest rate risk is primarily related to term loan arrangements, and increases in interest rates may reduce net income by increasing debt costs without a corresponding increase in cash flow [201]. - The company is exposed to market risks due to fluctuations in interest rates and foreign exchange rates, which could impact results of operations and cash flows [198]. - The company may manage interest rate exposure through the use of interest rate derivatives [201]. - The company is monitoring regulatory guidance and proposals for reform related to benchmark indices like LIBOR and SOFR [200]. Corporate Actions - The spin-off of FTAI Infrastructure on August 1, 2022, resulted in a $730.3 million dividend to the company, which was used to repay various debts [130]. - The merger with FTAI LLC on November 10, 2022, resulted in FTAI Aviation Ltd. becoming a Cayman Islands exempted company, enhancing its operational structure [132]. - The company has ongoing claims for approximately $274.0 million in insured value for aircraft and engines still located in Ukraine and Russia [127]. Accounting and Estimates - There were no material changes to critical accounting estimates as described in the Annual Report for the year ended December 31, 2022 [196]. - The company believes adequate capital and borrowings are available from various sources to fund its commitments [195].
FTAI AVIATION(FTAIM) - 2023 Q1 - Quarterly Report