FORTRESS TRSP(FTAIN) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended September 30, 2024, increased by $174.7 million to $465.8 million compared to $291.1 million in the same period of 2023, representing a growth of approximately 60%[158] - Lease income for the three months ended September 30, 2024, was $65.5 million, up from $45.6 million in 2023, an increase of 43.5%[158] - Aerospace products revenue surged to $303.5 million for the three months ended September 30, 2024, compared to $118.7 million in 2023, reflecting a growth of 255.5%[158] - The company reported a net income of $86.5 million for the three months ended September 30, 2024, compared to a net income of $41.3 million in the same period of 2023, an increase of 109.4%[158] - Total revenues increased by $174.7 million for the three months ended September 30, 2024, driven by a $184.8 million increase in aerospace products revenue and a $19.8 million increase in lease income[160] - Net income attributable to shareholders increased by $52.5 million (127.0%) for the three months ended September 30, 2024, compared to the same period in 2023[183] - Adjusted EBITDA increased by $58.5 million (135.2%) for the three months ended September 30, 2024, compared to the same period in 2023[184] Expenses and Costs - The company incurred total expenses of $316.5 million for the three months ended September 30, 2024, compared to $206.4 million in 2023, an increase of 53.5%[158] - Total expenses increased by $110.1 million for the three months ended September 30, 2024, primarily due to a $102.8 million increase in cost of sales[161] - Total expenses increased by $128.5 million (168.3%) for the three months ended September 30, 2024, compared to the same period in 2023[181] - Total expenses increased by $286.3 million (148.5%) for the nine months ended September 30, 2024, compared to the same period in 2023[181] - The provision for income taxes increased by $3.6 million for the three months ended September 30, 2024, due to higher income generated from leasing and aerospace activities[162] - Depreciation and amortization expense increased by $11.3 million in Q3 2024, driven by an increase in the number of assets owned and on lease[175] Management and Internalization - The internalization of management was completed on May 28, 2024, eliminating management fees and incentive distributions to the former manager[149] - The company anticipates savings in operational costs as a result of the management internalization effective May 28, 2024[198] - The internalization fee to the affiliate amounted to $300.0 million, significantly impacting the company's financials[190] Assets and Liquidity - Total consolidated assets as of September 30, 2024, were $3.7 billion, with total equity of $118.5 million[148] - The company owns and manages 393 aviation assets as of September 30, 2024, including 96 commercial aircraft and 297 engines[167] - As of September 30, 2024, the company had 86 commercial aircraft and 184 engines leased, with an aviation equipment utilization rate of approximately 79%[168] - The principal sources of liquidity include revenues from aviation assets, proceeds from borrowings, and asset sales[197] - The company expects to meet future short-term liquidity requirements through cash on hand and unused borrowing capacity[5] Debt and Interest - Interest expense increased by $17.8 million, reflecting an increase in average debt outstanding of approximately $913.0 million, primarily due to new Senior Notes issued in 2024[166] - Additional borrowings included $800 million in Senior Notes due 2031 and $700 million in Senior Notes due 2030[1] - A hypothetical 100-basis point increase in variable interest rates would result in an increase of approximately $1.5 million in interest expense over the next 12 months[6] Acquisitions - The company acquired LMCES in September 2024 and QuickTurn in December 2023 to enhance its aerospace products segment and establish permanent manufacturing capabilities[176] Cash Flow - Cash used for investments was $1.0 billion in the nine months ended September 30, 2024, compared to $562.8 million in the same period of 2023[1] - Cash flows used in operating activities were $(146.2) million for the nine months ended September 30, 2024, compared to $116.8 million in 2023, reflecting a $262.9 million increase in cash used[1] - Net cash used in investing activities increased by $251.6 million, primarily due to business acquisitions and deposits for aircraft and engines[2] - Net cash provided by financing activities increased by $535.9 million, driven by $1.6 billion in proceeds from debt[3] Impairments and Losses - The company recognized an impairment charge of $120 million related to leasing equipment assets due to the impact of sanctions on Russian airlines[151] - The net loss attributable to shareholders increased by $11.4 million in Q3 2024 and $333.8 million for the nine months ended September 30, 2024[193]