FORTRESS TRSP(FTAIN) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenues for the three months ended March 31, 2024, increased by $34.0 million to $326.7 million compared to $292.7 million in 2023[129] - Aerospace products revenue surged by $103.9 million, primarily driven by increased sales of CFM56-7B, CFM56-5B, and V2500 engines[130] - Maintenance revenue rose by $10.6 million due to a higher number of aircraft and engines placed on lease[130] - Total expenses increased by $21.5 million, driven by higher depreciation and amortization, interest expense, and acquisition expenses[132] - Adjusted EBITDA for the three months ended March 31, 2024, increased by $36.4 million to $164.1 million compared to $127.7 million in 2023[140] - Net income attributable to shareholders for the three months ended March 31, 2024, was $31.3 million, an increase of $8.7 million from $22.6 million in 2023[128] Aviation Leasing Segment - As of March 31, 2024, the Aviation Leasing segment managed 380 aviation assets, including 103 commercial aircraft and 277 engines[141] - Total revenues for the Aviation Leasing segment decreased by $63.7 million to $135.3 million, primarily due to a $70.1 million decrease in asset sales revenue[143][146] - Maintenance revenue increased by $10.6 million, driven by a higher number of aircraft and engines placed on lease and increased utilization[150] - Total expenses decreased by $50.2 million to $89.9 million, mainly due to a $60.3 million reduction in cost of sales[147] - Net income attributable to shareholders for the Aviation Leasing segment decreased by $15.2 million to $42.6 million[149] - Adjusted EBITDA for the Aviation Leasing segment decreased by $2.7 million to $104.8 million[152][160] Aerospace Products Segment - Aerospace Products segment revenue increased by $103.9 million to $189.1 million, primarily due to increased sales of CFM56-7B, CFM56-5B, and V2500 engines[154][156] - Total expenses in the Aerospace Products segment rose by $61.6 million to $119.6 million, largely due to increased costs of sales and operating expenses[157] - Net income attributable to shareholders in the Aerospace Products segment increased by $41.4 million to $66.4 million[159] - Adjusted EBITDA for the Aerospace Products segment increased by $42.9 million to $70.3 million[152][160] Impairment and Utilization - The company recognized an impairment charge of $120.0 million related to leasing equipment assets in Russia due to the ongoing conflict[119] - As of March 31, 2024, the aviation equipment utilization rate was approximately 78%, with a weighted average remaining lease term of 44 months for aircraft and 19 months for engines[142] Tax and Interest Expenses - The provision for income taxes increased by $2.0 million due to a reduction in a deferred tax asset related to a tax law change in Bermuda[151] - Interest expense rose by $8.4 million, reflecting an increase in average debt outstanding of approximately $417.1 million[173] Cash Flow and Investments - Cash used for investments was $303.0 million in Q1 2024, compared to $167.0 million in Q1 2023[174] - Net cash provided by operating activities decreased by $39.0 million to $(0.3) million in Q1 2024[175] - As of March 31, 2024, the company had outstanding principal and interest payment obligations of $2.7 billion and $0.7 billion, respectively[178] - The company expects to meet future short-term liquidity requirements through cash on hand, unused borrowing capacity, or future financings[181] - A hypothetical 100-basis point increase in variable interest rates would result in an increase of approximately $1.8 million in interest expense over the next 12 months[189] Offshore Energy Business - Total revenues decreased by $6.2 million to $2.3 million in Q1 2024, primarily due to a decrease in the Offshore Energy business as one vessel was off-hire[164] - Total expenses increased by $10.1 million to $72.0 million, driven by higher interest expense, acquisition and transaction expenses, and management fees[165] - Net loss attributable to shareholders increased by $17.5 million to $77.7 million in Q1 2024[167] - Adjusted EBITDA decreased by $3.7 million to $(10.98) million, reflecting the changes in revenues and expenses[168]