FORTRESS TRSP(FTAIN) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended September 30, 2023, were $291.1 million, an increase of 26.4% compared to $230.4 million in the same period of 2022[143]. - Net income from continuing operations for the three months ended September 30, 2023, was $41.3 million, a significant increase from a net loss of $4.1 million in the same period of 2022[143]. - Net income attributable to shareholders from continuing operations increased to $32.973 million for Q3 2023, compared to a loss of $10.938 million in Q3 2022, representing a change of $43.911 million[144]. - Adjusted EBITDA for Q3 2023 was $154.218 million, an increase of $45.355 million compared to $108.863 million in Q3 2022[144]. - Net income from continuing operations increased by $45.5 million for Q3 2023 and $262.9 million for the nine months ended September 30, 2023[159]. - Adjusted EBITDA for the nine months ended September 30, 2023, increased by $130.4 million compared to the prior year[161]. Revenue Breakdown - Aerospace products revenue surged by 100.5% to $107.1 million in Q3 2023 compared to $53.4 million in Q3 2022[143]. - Maintenance revenue for the three months ended September 30, 2023, increased by $28.4 million, attributed to early redelivery of four aircraft and higher aircraft utilization[168]. - Total revenues for the nine months ended September 30, 2023, increased by $246.1 million, driven by increases in Asset sales revenue, Maintenance revenue, and Lease income[167]. - Lease income for the nine months ended September 30, 2023, increased by $21.3 million, primarily due to an increase in the number of aircraft and engines placed on lease[168]. Expenses and Impairments - Total expenses for the three months ended September 30, 2023, were $246.6 million, an increase of 17.9% from $209.1 million in Q3 2022[143]. - The company recognized an impairment charge of $120.0 million related to leasing equipment assets due to the impact of sanctions on Russian airlines[130]. - Total expenses for Q3 2023 increased by $37.5 million, mainly due to higher Cost of sales, Operating expenses, and Depreciation and amortization[152]. - Total expenses rose by $32.8 million (94.5%) and $100.4 million (157.7%) for the three and nine months ended September 30, 2023, primarily due to increased cost of sales and operating expenses[180]. Asset Management - As of September 30, 2023, the Aviation Leasing segment owned and managed 351 aviation assets, including 92 commercial aircraft and 259 engines[162]. - The utilization rate of aviation equipment was approximately 77% during Q3 2023, with a weighted average remaining lease term of 47 months for aircraft[163]. - Asset sales revenue decreased by $12.5 million in Q3 2023, primarily due to a decline in the sale of commercial aircraft and engines[147]. Cash Flow and Financing - Cash flows provided by operating activities increased by $138.1 million, reflecting an increase in net income of $364.3 million for the nine months ended September 30, 2023[197]. - Cash used for investments was $562.8 million during the nine months ended September 30, 2023, compared to $545.7 million in the same period of 2022[196]. - Principal and interest payment obligations as of September 30, 2023, totaled $2.3 billion and $0.5 billion, respectively, with $164.2 million due in the next twelve months[201]. - The company is evaluating several potential transactions and related financings, including additional debt and equity financings, which could occur within the next 12 months[195]. Other Income and Taxation - Total other income decreased by $61.8 million during the nine months ended September 30, 2023, primarily due to a decrease in Gain on sale of assets, net[172]. - The provision for income taxes decreased by $1.5 million (56.3%) for the three months ended September 30, 2023, compared to the same period in 2022[178]. Interest Rate Sensitivity - As of September 30, 2023, a hypothetical 100-basis point increase/decrease in the variable interest rate on borrowings would result in an increase or decrease of approximately $2.5 million in interest expense over the next 12 months[212]. - The sensitivity analysis regarding interest rate changes is constrained by several factors, including the inability to include complex market reactions[211]. - The analysis does not account for the mark-to-market impact on interest rate derivatives or other potential factors affecting the business due to interest rate changes[211]. - The Series A and Series B preferred shares will accrue interest at a floating rate starting September 15, 2024, based on a variable interest rate index plus a spread[211].