FORTRESS TRSP(FTAIN) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, total revenues increased to $502.1 million, up 53.7% from $326.7 million in the same period of 2024 [150]. - Net income attributable to shareholders for the three months ended March 31, 2025, was $89.9 million, compared to $31.3 million in 2024, representing a growth of 185.5% [150]. - Adjusted EBITDA for the three months ended March 31, 2025, was $268.6 million, an increase of 63.7% from $164.1 million in 2024 [152]. - Total revenues increased by $175.4 million, driven by a $176.0 million increase in Aerospace products revenue and a $15.2 million increase in lease income [153]. - Net income increased by $62.8 million, primarily due to the revenue growth and changes in expenses [155]. - Adjusted EBITDA increased by $104.5 million, reflecting improved operational performance [156]. - Lease income for the three months ended March 31, 2025, was $68.5 million, an increase of 28.6% from $53.2 million in 2024 [150]. - Maintenance revenue increased by $3.8 million, driven by more aircraft and engines on lease [164]. - Net income attributable to shareholders increased by $40.2 million, reaching $106.6 million for the three months ended March 31, 2025, compared to $66.4 million in 2024 [170]. - Adjusted EBITDA (non-GAAP) increased by $60.7 million, totaling $130.9 million for the three months ended March 31, 2025, compared to $70.3 million in 2024 [174]. Revenue Breakdown - Aerospace products revenue for the same period was $365.1 million, a significant increase of 93.1% compared to $189.1 million in 2024 [150]. - Aerospace products revenue increased by $176.0 million to $365.1 million for the three months ended March 31, 2025, compared to $189.1 million in the same period of 2024 [169]. - Total expenses increased by $117.4 million, with cost of sales rising by $105.9 million [153]. - Total expenses rose by $119.6 million, with cost of sales increasing by $117.8 million, primarily due to higher sales of CFM56-5B, CFM56-7B, and V2500 engines [175]. Impairments and Charges - The company recognized an impairment charge of $120.0 million for leasing equipment assets related to the impact of Russia's invasion of Ukraine [140]. - The provision for income taxes increased by $17.3 million, driven by higher income from Aircraft Leasing and Aerospace Products segments [154]. - The provision for income taxes increased by $16.8 million, primarily due to higher income from Aerospace Products activities [172]. Strategic Initiatives - The company launched a Strategic Capital Initiative on December 30, 2024, focusing on acquiring 737NG and A320ceo aircraft, allowing for an asset-light business model [144]. - The company announced a Strategic Capital Initiative to acquire 737NG and A320ceo aircraft, aiming to maintain an asset-light business model [182]. - The company internalized its management function on May 28, 2024, eliminating management fees and incentive distributions to the former manager [138]. Cash Flow and Investments - Cash used for investments was $339.4 million for the three months ended March 31, 2025, compared to $303.0 million in 2024 [185]. - Net cash used in operating activities increased by $25.6 million to $(25,966) thousand in Q1 2025, compared to $(345) thousand in Q1 2024 [188]. - Net cash used in investing activities decreased by $141.6 million to $(27,627) thousand in Q1 2025, primarily due to proceeds from asset sales of $104.6 million [189]. - Net cash provided by financing activities decreased by $93.4 million to $50,610 thousand in Q1 2025, mainly due to the redemption of preferred shares of $124.2 million [190]. - Proceeds from the sale of assets were $263.1 million in Q1 2025, up from $128.4 million in Q1 2024 [194]. Debt and Obligations - As of March 31, 2025, the company had outstanding principal and interest payment obligations of $3.7 billion and $1.4 billion, respectively [191]. - Interest expense increased by $14.3 million, reflecting a rise in average debt outstanding to approximately $955.7 million [158]. - A hypothetical 100-basis point increase in variable interest rates would result in an increase of approximately $2.0 million in interest expense over the next 12 months [202]. Corporate Segment Performance - Total revenues in the Corporate and Other segment decreased by $2.3 million, primarily due to the sale of two vessels in the Offshore Energy business [177]. - Net loss attributable to shareholders in the Corporate and Other segment increased by $9.0 million, totaling $(86.8) million for the three months ended March 31, 2025 [176].