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What changed in StandardAero, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of StandardAero, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+125 added−662 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-12)

Top changes in StandardAero, Inc.'s 2025 10-K

125 paragraphs added · 662 removed · 98 edited across 5 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHe holds a Bachelor of Science degree in Computer Engineering from Universidad Simón Bolívar, Venezuela, an MBA in International Business from Xavier University and a Master of Science degree in Computer Science from University of Southern California. 46 The management team also includes Technology SME’s, Legal advisors, Business Unit leaders, HR representatives and Finance representatives to further assist our VP of Information Security and SVP of Information Technology with assessing and managing our material risks from cybersecurity threats.
Biggest changeThe management team also includes Technology SME’s, Legal advisors, Business Unit leaders, HR representatives and Finance representatives to further assist our VP of Information Security and Chief Information Officer with assessing and managing our material risks from cybersecurity threats.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Board members receive presentations on cybersecurity topics from our VP of Information Security, internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant.
Board members receive presentations on cybersecurity topics from our VP of Information Security and Chief Information Officer, internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant.
We update policies periodically based on evolving regulatory and threat landscapes. • Risk Identification – We leverage a set of tools designed to identify cyber security risks and manage vulnerabilities according to impact and likelihood. 45 • Risk assessments - Designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • Risk Response - A security team principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, and (3) response to cybersecurity incidents. • External Service Providers - We utilize external service providers, where we consider appropriate, to assess, test or otherwise assist with aspects of our security controls. • Risk Monitoring and Review – Monitoring of threats through threat intelligence feeds and security tools, the use of a Security Information and Event Management (SIEM) system for real-time detection, and periodic reassessments of risks as technology and threat landscapes evolve. • Training and Awareness – A dynamic role-based cybersecurity awareness training of our employees, incident response personnel, and senior management; • Incident Management – Protocols that are designed to respond to cybersecurity incidents, including procedures for response, containment, eradication, and recovery. • Integration with Business Strategy – Cybersecurity risk considerations are factored into key business decisions and strategies, and cybersecurity initiatives are aligned with organizational risk appetite and priorities.
We update policies periodically based on evolving regulatory and threat landscapes. • Risk Identification – We leverage a set of tools designed to identify cyber security risks and manage vulnerabilities according to impact and likelihood. • Risk Assessments – Designed to help identify material risks from cybersecurity threats to our critical systems and information; • Risk Response – A security team principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, and (3) response to cybersecurity incidents. • External Service Providers - We utilize external service providers, where we consider appropriate, to assess, test or otherwise assist with aspects of our security processes. • Risk Monitoring and Review – Monitoring of threats through threat intelligence feeds and security tools, the use of a Security Information and Event Management (SIEM) system for real-time detection, and periodic reassessments of risks as technology and threat landscapes evolve. • Training and Awareness – A dynamic role-based cybersecurity awareness training of our employees, including incident response personnel, and senior management; • Incident Management – Protocols that are designed to respond to cybersecurity incidents, including procedures for response, containment, eradication, and recovery, and a cybersecurity incident response plan. • Integration with Business Strategy – Cybersecurity risk considerations are factored into key business decisions and strategies, and cybersecurity initiatives are aligned with organizational risk appetite and priorities.
Key elements of our cybersecurity risk management program include: • Risk Governance – A structured set of cybersecurity policies, standards and guidelines, including incident response and disaster recovery procedures, to help the organization meet compliance and business goals.
Key elements of our cybersecurity risk management program include, but are not limited to, the following: • Risk Governance – A structured set of cybersecurity policies, standards and guidelines, including incident response and disaster recovery procedures, to help the organization meet compliance and business goals.
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the "Committee") the oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program . The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The Committee oversees, including oversight of management’s implementation of our cybersecurity risk management program . 47 The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The management team, led by one of our Vice Presidents for Information Security and our SVP of Information Technology is primarily responsible for assessing and managing risks from cybersecurity threats. • Our VP of Information Security is responsible for leading the organization's information security program, strategy and ensuring the protection of digital assets.
The management team, led by our Vice President of Information Security and Chief Information Officer, is primarily responsible for assessing and managing risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
ITEM 1C. CYBERSECURITY Risk Management and Strategy 46 We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our organization’s cybersecurity program is informed by industry standards and industry-recognized practices, such as the NIST Cybersecurity Framework, ISO 27001, and CIS Controls.
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Our organization’s cybersecurity program is informed by industry standards and industry-recognized practices, such as the NIST Cybersecurity Framework, ISO 27001, and CIS Controls.
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We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
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He has over 20 years of information technology experience, including leadership experience managing global information security, IT infrastructure and networking, experience designing comprehensive cybersecurity programs and managing and mitigating high profile cybersecurity incidents to ensure best information security practices and business continuity.
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We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
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Additionally, he has previously served as the CISO for the City of Plano, Texas at municipal government level and as the Information Security Principal performing various strategic and technological tasks with DynCorp International.
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See “ Risk Factors – Risks Related to Information Technology, Intellectual Property and Cybersecurity. ” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the "Committee") the oversight of cybersecurity and other information technology risks.
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He holds a Bachelor in Economics from University of San Buenaventura, Cali, Colombia and a Master of Science in Computer Information Systems with a concentration in Security from Boston University. • Our Senior VP of Information Technology is also responsible for oversight of our information security strategy, program, and operations.
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He has over 20 years of information technology experience, including leadership experience managing global information security, IT infrastructure and engineering. In the past, he has served in roles as Lead Technologist for Hewlett-Packard and as Global Product Manager for the Procter and Gamble Company.
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I T EM 2. PROPERTIES Our headquarters are located in Scottsdale, Arizona. Our facilities are located primarily in the United States, Canada and the United Kingdom.
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In the United States, our largest operation facilities are in San Antonio, Dallas and Houston, Texas, Cincinnati and Hillsboro, Ohio, Springfield, Illinois, Van Nuys, California, Augusta, Georgia, Maryville, Tennessee and Kansas City, Missouri and we have numerous sales and service facilities throughout the country. All our U.S. operating facilities are FAA authorized Repair Stations, pursuant to 14 C.F.R. Part 145.
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In the United Kingdom, our largest operation facilities are in Fleetlands, Portsmouth and Almondbank. In Canada, our largest operation facilities are in Winnipeg, Manitoba and Summerside, Prince Edward Island along with other smaller sales and service facilities throughout the country. We also have facilities in France, Singapore, Netherlands, Romania, Ireland, South Africa, Australia and Brazil.
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We believe that the equipment in use in our various facilities is of high quality, in part a result of capital expenditures made during the past several years and the redesign of certain of our facilities.
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The following table sets forth certain information with respect to our material facilities: Location Production Area (Square Feet) Use Owned or Leased Fleetlands, U.K. 731,000 Engine and airframe repair and overhaul Owned San Antonio, Texas, U.S. 716,000 Engine repair and overhaul Leased Winnipeg, Canada 637,000 Engine and component repair and overhaul Owned/Leased Cincinnati, Ohio, U.S. 460,000 Component repair and overhaul Leased Dallas, Texas, U.S. 384,000 Engine and component repair and overhaul Leased Springfield, Illinois, U.S. 199,000 Airframe repair and overhaul Leased Gonesse, France 182,000 Engine and component repair and overhaul Owned Almondbank, U.K. 178,000 Components and airframe repair and overhaul Owned Maryville, Tennessee, U.S. 167,000 Engine repair and overhaul Owned/Leased Portsmouth, U.K. 159,000 Engine and component repair and overhaul Owned 47 Location Production Area (Square Feet) Use Owned or Leased Summerside, Canada 157,000 Engine repair and overhaul Owned Augusta, Georgia, U.S. 137,000 Airframe and engine repair and overhaul Leased Houston, Texas, U.S. 127,000 Airframe and engine repair and overhaul Leased Kansas City, Missouri, U.S. 127,000 Component repair and overhaul Leased Hillsboro, Ohio, U.S. 108,000 Component repair and overhaul Owned Singapore 89,000 Engine and component repair and overhaul Leased Van Nuys, California, U.S. 75,000 Airframe and engine repair and overhaul Leased Stockton, California, U.S. 63,000 Component repair and overhaul Leased Miami, Florida, U.S. 63,000 Component repair and overhaul Leased Langley, Canada 61,000 Airframe repair and overhaul Leased Prahova, Romania 53,000 Component repair and overhaul Leased Cork, Ireland 50,000 Component repair and overhaul Leased Phoenix, Arizona, U.S. 40,000 Engine and component repair and overhaul Owned/Leased Fort Myers, Florida, U.S. 25,000 Component repair and overhaul Leased Westminster, Canada 24,000 Engine repair and overhaul Leased Brisbane, Australia 23,000 Engine repair and overhaul Owned Scottsdale, Arizona, U.S. 19,000 Corporate headquarters Leased Johannesburg, South Africa 18,000 Engine repair and overhaul Leased Hialeah, Florida, U.S. 18,000 Component repair and overhaul Leased 48 Location Production Area (Square Feet) Use Owned or Leased Miramar, Florida, U.S. 17,000 Asset management Leased Palm City, Florida, U.S. 17,000 Component repair and overhaul Leased Broomfield, Colorado, U.S. 14,000 Component repair and overhaul Leased Pittsburgh, Pennsylvania, U.S. 12,000 Engine and component repair and maintenance Leased New London, North Carolina, U.S. 12,000 Engine and component repair and maintenance Leased St.
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Paul, Minnesota, U.S. 11,000 Engine and component repair and maintenance Leased Opa Locka, Florida, U.S. 10,000 Airframe and engine repair and overhaul Leased West Palm Beach, Florida, U.S. 10,000 Engine and component repair and maintenance Leased Belo Horizonte, Brazil 6,000 Engine and component repair and maintenance Leased St.
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Louis, Missouri, U.S. 5,000 Engine and component repair and maintenance Leased We have multiple facilities in certain of these locations and, in addition, we have sales and service facilities located in North America.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot predict the outcome of these lawsuits, legal proceedings and claims with certainty. For further discussion please see Note 15, "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report. I T EM 4. MINE SAFETY DISCLOSURES Not applicable. 49 PART II
Biggest changeWe cannot predict the outcome of these lawsuits, legal proceedings and claims with certainty. For further discussion please see Note 15, "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 50 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 49 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 50 Item 6. [Reserved] 51 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 52
Biggest changeItem 4. Mine Safety Disclosures 50 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 51 Item 6. [Reserved] 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends We do not currently expect to pay any cash dividends on our common stock for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to support our operations and to finance the growth and development of our business.
Biggest changeDividends We do not currently expect to pay any cash dividends on our common stock for the foreseeable future.
Holders As of March 6, 2025, there were 147 holders of record of our common stock. The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders As of February 20, 2026, there were 171 holders of record of our common stock. The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Purchases of equity securities by the issuer and affiliated purchasers None. 50 Stock Performance Graph The following graph compares the total stockholder return from October 2, 2024, the date on which our common stock commenced trading on the New York Stock Exchange, NYSE, through December 31, 2024, of (i) our common stock, (ii) the Standard and Poor's 500 Stock Index, or S&P 500 Index, and (iii) the Standard and Poor's Aerospace and Defense Select Industry Index, or S&P Aerospace & Defense Select Index.
See Note 26, “Subsequent Events” for further details of the Company's share repurchases made in 2026. 51 Stock Performance Graph The following graph compares the total stockholder return from October 2, 2024, the date on which our common stock commenced trading on the New York Stock Exchange, NYSE, through December 31, 2025, of (i) our common stock, (ii) the Standard and Poor's 500 Stock Index, or S&P 500 Index, and (iii) the Standard and Poor's Aerospace and Defense Select Industry Index, or S&P Aerospace & Defense Select Index.
The covenants in the New Credit Agreement significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. Recent Sales of Unregistered Securities None.
The covenants in the New Credit Agreement significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. Recent Sales of Unregistered Securities None. Purchases of equity securities by the issuer and affiliated purchasers On December 9, 2025, our Board of Directors approved a stock repurchase program, effective at that date.
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Use of Proceeds from Registered Securities On October 1, 2024, in connection with our IPO, we issued and sold 53,250,000 shares of our common stock at a price to the public of $24.00 per share, resulting in gross proceeds to us of approximately $1,278.0 million and net proceeds to us of approximately $1,202.8 million, after deducting underwriting discounts of $67.1 million and offering expenses of approximately $8.1 million.
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The stock repurchase program authorizes us to repurchase up to $450.0 million of our common stock, subject to market conditions, contractual restrictions and other factors. No purchases of equity securities were made during the fourth quarter of fiscal 2025.
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All shares issued and sold were registered pursuant to a registration statement on Form S‑1 (File No. 333-281992), as amended (the “Registration Statement”), declared effective by the SEC on October 1, 2024. J.P. Morgan Securities LLC and Morgan Stanley & Co LLC acted as representatives of the underwriters for the IPO.
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The IPO terminated after the sale of all securities registered pursuant to the Registration Statement.
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No offering expenses were paid or are payable, directly or indirectly, to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities or (iii) any of our affiliates, except TCG Capital Markets L.L.C., an affiliate of Carlyle, acted as an underwriter for the IPO.
Removed
We fully used the net proceeds from the IPO to: (i) redeem all $475.5 million aggregate principal amount of the Prior Senior Notes outstanding, at a redemption price equal to 100% of the aggregate principal amount thereto; and (ii) prepay approximately $523.7 million aggregate principal amount of the 2024 Term B-1 Loans and approximately $201.9 million aggregate principal amount of the 2024 Term B-2 Loans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

84 edited+23 added−547 removed74 unchanged
Biggest changeWe believe that Adjusted EBITDA and Adjusted EBITDA Margin are important metrics for management and investors as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers. 55 The following table presents a reconciliation of net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin: Year Ended December 31, 2024 2023 (in millions, except percentages) Net income (loss) $ 11.0 $ (35.1 ) Income tax expense 70.8 40.2 Depreciation and amortization 188.1 197.1 Interest expense 282.5 309.6 Business transformation costs (LEAP and CFM) (4) 43.2 11.4 IPO-related costs 26.9 — Refinancing costs 23.7 19.9 Loss on debt extinguishment 15.3 6.2 Stock compensation (2) 17.4 — Integration costs and severance (1) 2.8 1.4 Acquisition costs (3) 1.4 1.5 Other (5) 7.4 8.9 Adjusted EBITDA $ 690.5 $ 561.1 Revenue $ 5,237.2 $ 4,563.3 Net income (loss) margin 0.2 % (0.8 )% Adjusted EBITDA Margin 13.2 % 12.3 % (1) Represents integration costs incurred, including any facility or platform consolidation associated with the integration of an acquisition that does not meet capitalization criteria and severance related to reduction in workforce or acquisitions.
Biggest changeWe believe that Adjusted EBITDA and Adjusted EBITDA Margin are important metrics for management and investors as they remove the impact of items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers. 56 The following table presents a reconciliation of net income and net income margin to Adjusted EBITDA and Adjusted EBITDA Margin, respectively for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands, except percentages) Net income $ 277,417 $ 10,974 Income tax expense 99,435 70,783 Depreciation and amortization 193,664 188,164 Interest expense 174,217 282,507 Business transformation costs (LEAP and CFM) (1) 26,028 43,238 IPO-related costs — 26,909 Refinancing costs — 23,700 Loss on debt extinguishment — 15,255 Non-cash stock compensation expense 13,237 17,376 Integration costs and severance (2) 5,601 2,782 Acquisition costs (3) — 1,374 Insurance recovery (3,000 ) — Loss on disposals 2,764 — Secondary offering costs 4,990 — Other (4) 13,820 7,470 Adjusted EBITDA $ 808,173 $ 690,532 Revenue $ 6,062,513 $ 5,237,161 Net income margin 4.6 % 0.2 % Adjusted EBITDA Margin 13.3 % 13.2 % (1) Represents new product industrialization costs with the business transformation of the LEAP 1A/1B engine line in San Antonio, Texas and the expansion of the Company’s CFM56 capabilities into Dallas, Texas.
Proceeds from the IPO and the issuance of long-term debt were partially offset by the repayment of long-term debt of $4,235.5 million, primarily comprised of $2,962.0 million of payments on the Prior Term Loan Facilities, $675.5 on the Prior Senior Notes, $502.0 million on the Prior ABL Facility and $95.0 million on the New 2024 Revolving Credit Facility.
Proceeds from the IPO and the issuance of long-term debt were partially offset by the repayment of long-term debt of $4,235.5 million, primarily comprised of $2,962.0 million of payments on the Prior 2024 Term Loan Facilities, $675.5 on the Prior Senior Notes, $502.0 million on the Prior ABL Credit Facility and $95.0 million on the New 2024 Revolving Credit Facility.
Risk Factors—Risks Related to Management and Employees—The requirements of being a public company may strain our resources, increase our costs, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.” 54 Key Performance Indicators and Non-GAAP Financial Measures We use certain non-GAAP key performance indicators to evaluate our business operations, including Adjusted EBITDA and Adjusted EBITDA Margin.
Risk Factors—Risks Related to Management and Employees—The requirements of being a public company may strain our resources, increase our costs, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.” Key Performance Indicators and Non-GAAP Financial Measures We use certain non-GAAP key performance indicators to evaluate our business operations, including Adjusted EBITDA and Adjusted EBITDA Margin.
From time to time, we may encounter difficulties in obtaining certain raw materials or components necessary for production due to supply chain constraints and logistical challenges, which may also negatively impact the pricing of materials and components sourced or used in our services. 67 Currency Risk Our assets and liabilities in foreign currencies are translated at the period-end rate.
From time to time, we may encounter difficulties in obtaining certain raw materials or components necessary for production due to supply chain constraints and logistical challenges, which may also negatively impact the pricing of materials and components sourced or used in our services. Currency Risk Our assets and liabilities in foreign currencies are translated at the period-end rate.
We engage the assistance of valuation specialists when necessary, in determining the fair value of assets acquired and liabilities assumed in business combinations that are required. The determination of the estimated fair value of the inventories is consistent with our inventory accounting policy, including the estimation of obsolescence or unmarketable inventory on a part-by-part basis using aging profiles.
We engage the assistance of valuation specialists when necessary, in determining the fair value of assets acquired and liabilities assumed in business combinations that are required. The determination of the estimated fair value of the inventories is consistent with our inventory 65 accounting policy, including the estimation of obsolescence or unmarketable inventory on a part-by-part basis using aging profiles.
On March 15, 2023, we entered into an interest rate swap contract, effective March 31, 2023, for a notional amount for $400.0 million. The swap provides an effective fixed SOFR rate of 3.71%, maturing on December 31, 2025. Additionally, we have entered into an interest rate cap contract to limit the exposure against the risk of rising interest rates.
On March 15, 2023, we entered into an interest rate swap contract, effective March 31, 2023, for a notional amount for $400.0 million. The swap provides an effective fixed SOFR rate of 3.71%, maturing on December 31, 2025. Additionally, we entered into an interest rate cap contract to limit the exposure against the risk of rising interest rates.
The maximum contingent consideration payable from the Company to the seller is $21.0 million. The acquisition was funded with borrowings under the ABL Credit Facility, which was repaid on September 6, 2024 with incremental borrowings from the Prior 2024 Term Loan B-1 Facility and the Prior 2024 Term Loan B-2 Facility.
The maximum contingent consideration payable from the Company to the seller is $21.0 million. The acquisition was funded with borrowings under the Prior ABL Credit Facility, which was repaid on 55 September 6, 2024 with incremental borrowings from the Prior 2024 Term B-1 Loan Facility and the Prior 2024 Term B-2 Loan Facility.
Acquisition costs Acquisition costs primarily consist of professional service fees and other third-party costs incurred as part of the transaction process. Acquisition costs do not include any cost associated with the issuance of debt as these are capitalized and amortized over the term of the debt.
Acquisition costs Acquisition costs primarily consist of professional service fees and other third-party costs incurred as part of the transaction process. Acquisition costs do not include any costs associated with the issuance of debt as these are capitalized and amortized over the term of the debt.
Dollar denominated loans under the Credit Facilities (subject to a 0.00% floor), plus an applicable margin ranging from (x) 2.00% to 2.25% in the case of the New 2024 Term Loan Facilities, and (y) 1.50% to 2.00% in the case of the New 2024 Revolving Credit Facility; (b) a EURIBOR based rate for Euro denominated loans under the New 2024 Revolving Credit Facility (subject to a 0.00% floor), plus an applicable margin ranging from 1.50% to 2.00%; (c) a Term CORRA based rate for Canadian Dollar denominated loans under the New 2024 Revolving Credit Facility (subject to a 0.00% floor), plus an applicable margin ranging from 1.50% to 2.00%; (d) a SONIA based rate for Pounds Sterling denominated loans under the New 2024 Revolving Credit Facility (subject to a 0.00% floor), plus an applicable margin ranging from 1.50% to 2.00%; and (e) a base rate for U.S.
Dollar denominated loans under the New Senior Secured Credit Facilities (subject to a 0.00% floor), plus an applicable margin ranging from (x) 2.00% to 2.25% in the case of the New 2024 Term Loan Facilities, and (y) 1.50% to 2.00% in the case of the New 2024 Revolving Credit Facility; (b) a EURIBOR based rate for Euro denominated loans under the New 2024 Revolving Credit Facility (subject to a 0.00% floor), plus an applicable margin ranging from 1.50% to 2.00%; (c) a Term CORRA based rate for Canadian Dollar denominated loans under the New 2024 Revolving Credit Facility (subject to a 0.00% floor), plus an applicable margin ranging from 1.50% to 2.00%; (d) a SONIA based rate for Pounds Sterling denominated loans under the New 2024 Revolving Credit Facility (subject to a 0.00% floor), plus an applicable margin ranging from 1.50% to 2.00%; and (e) a base rate for U.S.
Cost of revenue consists primarily of cost of materials, direct labor and overhead. 52 Key Factors and Trends Affecting Our Business Manufacturer specifications, government regulations and military maintenance regimens generally require that aircraft and engines undergo aftermarket servicing at regular intervals or upon the occurrence of certain events during the serviceable life of each asset.
Cost of revenue consists primarily of cost of materials, direct labor and overhead. 53 Key Factors and Trends Affecting Our Business Manufacturer specifications, government regulations and military maintenance regimens generally require that aircraft and engines undergo aftermarket servicing at regular intervals or upon the occurrence of certain events during the serviceable life of each asset.
Should future demand or market conditions prove to be different than the estimates, our cost of revenue may increase. 65 Income taxes We believe that our accruals for tax liabilities are adequate for all open audit years based on our assessment of many factors including past experience and interpretations of tax law.
Should future demand or market conditions prove to be different than the estimates, our cost of revenue may increase. 66 Income taxes We believe that our accruals for tax liabilities are adequate for all open audit years based on our assessment of many factors including past experience and interpretations of tax law.
Income tax expense (benefit) Our provision for income tax expense (benefit) is based on permanent book/tax differences and statutory tax rates in the various jurisdictions in which we operate.
Income tax expense Our provision for income tax expense is based on permanent book/tax differences and statutory tax rates in the various jurisdictions in which we operate.
Exchange differences arising from this translation are recorded in our consolidated statements of operations. In addition, currency exposures can arise from revenue and purchase transactions denominated in foreign currencies. Generally, transactional currency exposures are naturally hedged (i.e., revenue and expenses are approximately matched), but where appropriate, we may use foreign exchange contracts.
Exchange differences arising from this translation are recorded in our consolidated statements of operations. In addition, currency exposures can arise from revenue and purchase transactions denominated in foreign currencies. Generally, transactional currency 68 exposures are naturally hedged (i.e., revenue and expenses are approximately matched), but where appropriate, we use foreign exchange contracts.
(3) Represents integration costs incurred, including any facility or platform consolidation associated with the integration of an acquisition that does not meet capitalization criteria and severance related to reduction in workforce or acquisitions. Examples of integration costs may include lease breakage or run-off fees, consulting costs, demolition costs or training costs.
(2) Represents integration costs incurred, including any facility or platform consolidation associated with the integration of an acquisition that does not meet capitalization criteria and severance related to reduction in workforce or acquisitions. Examples of integration costs may include lease breakage or run-off fees, consulting costs, demolition costs or training costs.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk The New Credit Agreements are subject to interest rate risk. Borrowings under the New Senior Secured Credit Facilities bear interest at a floating rate per annum which can be, at our option: (a) a Term Secured Overnight Financing Rate ("SOFR") based rate for U.S.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk The New Credit Agreements are subject to interest rate risk. Borrowings under the New Senior Secured Credit Facilities bear interest at a floating rate per annum which can be, at our option: (a) a Term Secured Overnight Financing Rate (“SOFR”) based rate for U.S.
Such an acceleration of our indebtedness would have a material adverse effect on our liquidity, including our ability to make payments on our other indebtedness and our ability to operate our business. As of December 31, 2024, we were in compliance with the covenants in the New Credit Agreement.
Such an acceleration of our indebtedness would have a material adverse effect on our liquidity, including our ability to make payments on our other indebtedness and our ability to operate our business. As of December 31, 2025, we were in compliance with the covenants in the New Credit Agreement.
The interest rate cap contract, effective on March 31, 2023, provides a capped SOFR rate of 4.45% and matures on September 30, 2025. This interest rate cap contract began with a notional amount of $500.0 million, increased to $1,000.0 million on March 31, 2023, and to $1,500.0 million on March 28, 2024.
The interest rate cap contract, effective on March 31, 2023, provides a capped SOFR rate of 4.45% and matured on September 30, 2025. This interest rate cap contract began with a notional amount of $500.0 million, increased to $1,000.0 million on March 31, 2023, and to $1,500.0 million on March 28, 2024.
For purposes of this section, references to the “Company,” “we,” “us,” and “our” refer to StandardAero, Inc. and its subsidiaries. The following is a discussion and analysis of, and a comparison between, our results of operations for the years ended December 31, 2024 and 2023.
For purposes of this section, references to the “Company,” “we,” “us,” and “our” refer to StandardAero, Inc. and its subsidiaries. The following is a discussion and analysis of, and a comparison between, our results of operations for the years ended December 31, 2025 and 2024.
("Aero Turbine"), a provider of engine component repair and other value-added engine aftermarket services for U.S. and international customers for an estimated purchase price of approximately $132.0 million, comprising an initial cash purchase price of $116.8 million and $15.2 million representing the estimated fair value of additional consideration contingently payable based upon the achievement of gross profit in excess of certain gross profit targets for the period from January 1, 2024, to December 31, 2026, subject to post-closing adjustments.
(“Aero Turbine”), a provider of engine component repair and other value-added engine aftermarket services for U.S. and international customers for an estimated purchase price of approximately $132.0 million, comprising an initial cash purchase price of $116.8 million and $15.2 million representing the estimated fair value of additional consideration contingently payable based upon the achievement of gross profit in excess of certain gross profit targets for the period from January 1, 2024, to December 31, 2026, subject to post-closing adjustments.
While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers require us to increase prices for our products or services, this could lead to decreased demand for our products and services, which would negatively impact our results of operations, cash flows, and financial condition. See “Part I.
While negotiations regarding tariffs are ongoing, if the resulting environment of retaliatory tariffs or other practices of additional trade restrictions or barriers require us to increase prices for our products or services, this could lead to decreased demand for our products and services, which would negatively impact our results of operations, cash flows, and financial condition.
Loss on debt extinguishments Loss on debt extinguishments primarily consists of the write-off of unamortized charges related to the extinguished portions of the Prior 2023 and Prior 2024 Term Loan Facilities, the Prior ABL Credit Facility and the redemption of the Prior Senior Notes.
Loss on debt extinguishments Loss on debt extinguishments primarily consists of the write-off of unamortized charges related to the extinguished portions of the Prior 2023 and Prior 2024 Term Loan Facilities, the Prior ABL Credit Facility and the redeemed portions of the Prior Senior Notes.
We completed our annual impairment tests during the years ended December 31, 2024 and 2023, by performing a qualitative analysis and determined that no impairment had occurred. Inventories Inventories are recorded at the lower of cost and net realizable value with cost being determined on a first-in first-out basis.
We completed our annual impairment tests during the years ended December 31, 2025 and 2024, by performing a quantitative analysis in 2025 and a qualitative analysis in 2024 and determined that no impairment had occurred. Inventories Inventories are recorded at the lower of cost and net realizable value with cost being determined on a first-in first-out basis.
The number of aircraft in operation and the utilization of those aircraft are generally tied to global air travel over the long-term, which has historically grown in excess of GDP driven by secular tailwinds such as globalization, rising middle class population and wealth, increasing demand for leisure travel, growth in corporate earnings and e-commerce and technological advancements in aviation.
The number of aircraft in operation and the utilization of those aircraft are generally tied to global air travel over the long-term, which has historically grown in excess of gross domestic product driven by secular tailwinds such as globalization, rising middle class population and wealth, increasing demand for leisure travel, growth in corporate earnings and e-commerce and technological advancements in aviation.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand StandardAero, Inc.
ITEM 7. M ANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help you understand StandardAero, Inc.
Risk Factors—Risks Related to Our Business and Industry—We depend on certain component parts and material suppliers for our engine repair and overhaul operations, and any supply chain disruptions or loss of key suppliers could adversely affect our business, results of operations and financial condition.” In addition, the implementation of tariffs has the potential to disrupt global trade and existing supply chains and impose additional costs on our business.
Risk Factors—Risks Related to Our Business and Industry—We depend on certain component parts and material suppliers for our engine repair and overhaul operations, and any supply chain disruptions or loss of key suppliers could adversely affect our business, results of operations and financial condition.” In addition, the Company continues to closely monitor the implementation of tariffs, which has the potential to disrupt global trade and existing supply chains and impose additional costs on our business.
Refinancing costs Refinancing costs primarily consists of costs incurred for the amendments to the Prior Credit Agreement in March and September 2024 and August 2023, and costs incurred for the New Credit Agreement in October 2024.
Refinancing costs Refinancing costs primarily consists of costs incurred for the amendments to the Prior Credit Agreement in March 2024 and September 2024, and costs incurred for the New Credit Agreement in October 2024.
(4) Represents transaction costs incurred in connection with planned and completed acquisitions, including legal and professional fees, debt arrangement fees and other third-party costs.
(3) Represents transaction costs incurred in connection with planned completed acquisitions, including legal and professional fees, debt arrangement fees and other third-party costs.
See “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—New Credit Agreement” for further discussion of the New Credit Agreement and New Senior Secured Credit Facilities. The New Credit Agreement contains certain financial reporting covenants that require us to present periodic financial metrics to our lenders.
See our 2024 Form 10-K, “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—New Credit Agreement” for further discussion of the New Credit Agreement and New Senior Secured Credit Facilities. The New Credit Agreement contains certain financial reporting covenants that require us to present periodic financial metrics to our lenders.
Our Component Repair Services segment supports commercial aerospace, military aerospace, business aviation, land and marine and other markets with engine piece part repair and accessory repair. 56 Cost of revenue Cost of revenue primarily consists of direct costs required to provide our services.
Our Component Repair Services segment supports commercial aerospace, military aerospace, land and marine and other markets with engine piece part repair and accessory repair. 57 Cost of revenue Cost of revenue primarily consists of direct costs required to provide our services.
A 1% change in the estimated margin by engine platform for open work orders would have resulted in a $13.2 million change in revenue for the year ended December 31, 2024, which represents 0.3% of total revenue and 3.3% of operating income for the year ended December 31, 2024.
A 1% change in the estimated margin by engine platform for open work orders would have resulted in a $17.5 million change in revenue for the year ended December 31, 2025, which represents 0.3% of total revenue and 3.2% of operating income for the year ended December 31, 2025.
Our principal historical cash requirements have been to fund working capital, capital expenditures and acquisitions and to service our indebtedness. As of December 31, 2024, we had $837.7 million of available liquidity, consisting of $102.6 million cash on hand, $735.1 million available under the New 2024 Revolving Credit Facility.
Our principal historical cash requirements have been to fund working capital, capital expenditures and acquisitions and to service our indebtedness. As of December 31, 2025, we had $1,025.6 million of available liquidity, consisting of $289.7 million cash on hand and, $735.9 million available under the New 2024 Revolving Credit Facility.
Approximately $152.9 million, or 2.9%, and $152.9 million, or 3.4%, of revenue for the years ended December 31, 2024 and 2023, respectively, was attributable to non-U.S. Dollar currencies.
Approximately $144.4 million, or 2.4%, and $152.9 million, or 2.9%, of revenue for the years ended December 31, 2025 and 2024, respectively, was attributable to non-U.S. Dollar currencies.
Adjusted EBITDA and Adjusted EBITDA Margin We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense, depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as non-recurring items such as acquisition costs, integration and severance costs, refinancing fees, business transformation costs and other discrete expenses, when applicable.
Adjusted EBITDA and Adjusted EBITDA Margin We define Adjusted EBITDA as net income before interest expense, income tax expense, depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as items not recurring in the ordinary course of business such as acquisition costs, integration and severance costs, refinancing fees, business transformation costs and other discrete expenses, when applicable.
Recent Accounting Pronouncements See Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements included elsewhere in this Annual Report for a description of recent accounting pronouncements, if any, including the expected dates of adoption and the anticipated impact on our consolidated financial statements. 66 I TEM 7A.
Recent Accounting Pronouncements See Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements included elsewhere in this Annual Report for a description of recent accounting pronouncements, if any, including the expected dates of adoption and the anticipated impact on our consolidated financial statements. 67 IT EM 7A.
The offering included 69,000,000 registered ordinary shares, of which, the Company issued and sold 53,250,000 ordinary shares and the selling existing stockholders sold 15,750,000 ordinary shares, including 9,000,000 ordinary shares issued pursuant to the full exercise of the Underwriters' option to purchase additional shares from the selling existing stockholders.
The offering included 69,000,000 shares of Common Stock, of which, the Company issued and sold 53,250,000 shares and the selling stockholders sold 15,750,000 shares, including 9,000,000 shares issued pursuant to the full exercise of the underwriters’ option to purchase additional shares from the selling stockholders.
As of December 31, 2024 and 2023, we had a valuation allowance of $117.7 million and $94.8 million, respectively, recorded against our interest expense carryforward deferred tax asset under Section 163(j) of the Code.
As of December 31, 2025 and 2024, we had a valuation allowance of $120.2 million and $117.7 million, respectively, recorded against our interest expense carryforward deferred tax asset under Section 163(j) of the Code.
Business Combinations To continue to grow our business, we are continually acquiring and investing in companies that share our common goal of providing the market with aftermarket services across multiple engine platforms. During the years ended December 31, 2024, and December 31, 2023, we acquired the following entities: On August 23, 2024, we acquired Aero Turbine, Inc.
Business Combinations To continue to grow our business, we are continually acquiring and investing in companies that share our common goal of providing the market with aftermarket services across multiple engine platforms. On August 23, 2024, we acquired Aero Turbine, Inc.
The ordinary shares sold in the IPO were registered under the Securities Act pursuant to a Registration Statement on Form S-1 (the “IPO Registration Statement”), which was declared effective by the SEC on October 1, 2024.
The shares of Common Stock sold in the IPO were registered under the Securities Act pursuant to a Registration Statement on Form S-1, which was declared effective by the SEC on October 1, 2024.
Revenue recognized related to open work orders had accumulated costs of $987.4 million, which resulted in $1,136.4 million of our total revenue for the year ended December 31, 2024.
Revenue recognized related to open work orders had accumulated costs of $1,366.4 million, which resulted in $1,537.4 million of our total revenue for the year ended December 31, 2025.
The increase in our net working capital was primarily due to the increase in trade working capital driven by continued growth in the business. 62 Net cash used in investing activities for the year ended December 31, 2024 of $235.5 million was primarily due to investments made to stand up our LEAP-1A and LEAP-1B program, and consisted of $123.2 million of purchases of property, plant and equipment, rental engines and intangible assets, and $114.1 million for the acquisition of Aero Turbine on August 23, 2024.
Net cash used in investing activities for the year ended December 31, 2024 of $235.5 million was primarily due to investments made to stand up our LEAP program, and consisted of $123.2 million of purchases of property, plant and equipment, rental engines and intangible assets, and $114.1 million for the acquisition of Aero Turbine on August 23, 2024.
See Note 17, "Related Party Transactions" to our consolidated financial statements included elsewhere in this report for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc.
See Note 17, "Related Party Transactions" to the Company’s condensed consolidated financial statements included elsewhere in this Annual Report on Form 10-K for descriptions of the consulting services agreements with Carlyle Investment Management L.L.C. and Beamer Investment Inc.
(5) Represents other non-recurring costs including quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions, and other non-comparable events to measure operating performance as these events arise outside of our ordinary course of continuing operations.
(4) Represents other costs not recurring in the ordinary course of business including professional fees related to business transformation and quarterly management fees payable to Carlyle Investment Management L.L.C. and Beamer Investment Inc. under consulting services agreements, representation and warranty insurance costs associated with acquisitions, and other non-comparable events to measure operating performance as these events arise outside of the Company’s ordinary course of continuing operations.
The table below highlights the differences between Adjusted EBITDA presented in this Annual Report and Consolidated EBITDA presented to our creditors: Period Amount (in millions) Year ended December 31, 2024 $ 5.0 Year ended December 31, 2023 $ 3.4 Compliance with these covenants is essential to our ability to continue to meet our liquidity needs, as a failure to comply under the New Credit Agreement could result in a default under the New Credit Agreement and permit the senior lenders to accelerate the maturity of our indebtedness.
The table below highlights the differences between Adjusted EBITDA presented in this Annual Report and Consolidated EBITDA presented to our creditors: Increases from Adjusted EBITDA to Consolidated EBITDA Amount (in thousands) Last twelve months ended December 31, 2025 $ 5.1 Last twelve months ended December 31, 2024 $ 5.0 Compliance with these covenants is essential to our ability to continue to meet our liquidity needs, as a failure to comply under the New Credit Agreement could result in an event of default under the New Credit Agreement and permit the senior lenders to accelerate the maturity of our indebtedness.
Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. 64 Business combinations When we acquire a business, we allocate the purchase price by recognizing assets acquired and liabilities assumed based on their estimated fair values at acquisition date with any excess of the purchase consideration when compared to the fair value of the net tangible and intangible assets acquired recognized as goodwill.
Business combinations When we acquire a business, we allocate the purchase price by recognizing assets acquired and liabilities assumed based on their estimated fair values at acquisition date with any excess of the purchase consideration when compared to the fair value of the net tangible and intangible assets acquired recognized as goodwill.
Public Company Expenses We have incurred, and expect to continue to incur, certain non-recurring professional fees and other expenses as part of our transition to a public company.
Public Company Expenses We have incurred, and expect to continue to incur, certain professional fees and other expenses as part of our transition to a public company not recurring in the ordinary course of business.
As of December 31, 2024 and 2023, our debt outstanding consisted of the following: As of December 31, 2024 2023 (in thousands) New 2024 Term loan facilities $ 2,250,000 $ — Prior 2023 Term loan facilities — 2,562,125 Prior Senior Notes — 675,468 Finance leases 18,375 20,260 Other 1,230 1,426 2,269,605 3,259,279 Less: Current portion (23,449 ) (26,676 ) Unamortized discounts (22,456 ) (26,873 ) Unamortized deferred finance charges (15,723 ) (33,622 ) Long-term debt $ 2,207,977 $ 3,172,108 As of December 31, 2024, we had the following debt agreements: • The New 2024 Term Loan Facilities under the New Credit Agreement, under which we had outstanding indebtedness in an aggregate principal amount of $2,250.0 million, maturing on October 31, 2031. • $750.0 million New 2024 Revolving Credit Facility under the New Credit Agreement, under which we had no outstanding borrowings, maturing on October 31, 2029. • $19.6 million in finance leases and other debt. 61 New Credit Agreement Covenant Compliance The New 2024 Revolving Credit Facility is subject to a springing financial covenant, which requires us to maintain a maximum consolidated first lien net leverage ratio that is tested quarterly, at the end of any fiscal quarter, when more than 40% of the New 2024 Revolving Credit Facility (excluding, among other things, all letters of credit incurred under the New 2024 Revolving Credit Facility (whether or not cash collateralized) and adjusted cash and cash equivalents of the Borrowers and their restricted subsidiaries) is utilized on such date.
As of December 31, 2025 and 2024, our debt outstanding consisted of the following: As of December 31, 2025 2024 (in thousands) New 2024 Term Loan Facilities $ 2,227,500 $ 2,250,000 New 2024 Revolving Credit Facility — — Finance leases 18,525 18,375 Other 1,172 1,230 2,247,197 2,269,605 Less: Current portion (23,444 ) (23,449 ) Unamortized discounts (19,170 ) (22,456 ) Unamortized deferred finance charges (13,422 ) (15,723 ) Long-term debt $ 2,191,161 $ 2,207,977 As of December 31, 2025, we had the following debt agreements: • The New 2024 Term Loan Facilities under the New Credit Agreement, under which we had outstanding indebtedness in an aggregate principal amount of $2,227.5 million, maturing on October 31, 2031. • The $750.0 million New 2024 Revolving Credit Facility under the New Credit Agreement, under which we had no outstanding indebtedness. • $19.7 million in finance leases and other debt. 62 New Credit Agreement Covenant Compliance The New 2024 Revolving Credit Facility is subject to a springing financial covenant, which requires us to maintain a maximum consolidated first lien net leverage ratio that is tested quarterly, at the end of any fiscal quarter, when more than 40% of the New 2024 Revolving Credit Facility (excluding, among other things, all letters of credit incurred under the New 2024 Revolving Credit Facility (whether or not cash collateralized) and adjusted cash and cash equivalents of the Borrowers and their restricted subsidiaries) is utilized on such date.
Gains or losses due to transactions in foreign currencies included in our consolidated statements of operations was a $1.4 million gain and a $3.2 million loss for the years ended December 31, 2024 and 2023, respectively.
Gains or losses due to transactions in foreign currencies included in our consolidated statements of operations was a $1.3 million gain and a $1.4 million gain for the years ended December 31, 2025 and 2024, respectively. A hypothetical 10% change in the relative value of the U.S.
This increase was driven by a growth in volumes, which drove higher material and direct labor expenses, as well as increased other overhead costs directly related to the performance of aftermarket services.
This increase was driven by a growth in volumes, which drove corresponding higher material and direct labor expenses, as well as increased other overhead costs directly related to the performance of aftermarket services, in addition to the cost of revenue attributable to the acquisition of Aero Turbine on August 23, 2024.
SG&A expense was $254.1 million and $202.8 million for the years ended December 31, 2024 and 2023, respectively, and was 4.9% and 4.5% of revenue for each of the years ended December 31, 2024 and 2023.
SG&A expense was $247.7 million and $254.1 million for the year ended December 31, 2025 and 2024, respectively, and was 4.1% and 4.9% of revenue for the years ended December 31, 2025 and 2024, respectively.
Risk Factors—Risks Related to Our Business and Industry—United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business.” Key Factors Affecting the Comparability of Our Results of Operations Our results have been affected by, and may in the future be affected by, the following factors, which must be understood in order to assess the comparability of our period-to-period financial performance and condition.
Risk Factors—Risks Related to Our Business and Industry—United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business.” Key Factors Affecting the Comparability of Our Results of Operations Our results have been affected by, and may in the future be affected by, the following factors, which must be understood in order to assess the comparability of our period-to-period financial performance and condition. 54 Recent Developments Initial Public Offering On October 2, 2024, the Company completed its initial public offering (“IPO”) of ordinary shares at a price to the public of $24.00 per share (“Common Stock”).
Revenue recognition The Company has three significant types of maintenance contracts with customers: fixed price contracts, time and material contracts and engine utilization contracts. The performance obligations in a contract can include: (i) repair services and parts/modules embodied and (ii) engine rental revenue.
We have three 64 significant types of aftermarket services revenue contracts: fixed price contracts, time and materials contracts and engine utilization contracts. The performance obligation in a contract can include: (i) repair services and parts/modules embodied and (ii) engine rental revenue.
Our financial statements following our initial public offering will reflect the impact of these expenses. See “Part I. Item 1A.
Our financial statements following the IPO have reflected and will continue to reflect the impact of these expenses. See “Part I. Item 1A.
A hypothetical 10% change in the relative value of the U.S. dollar to other currencies during any of the periods presented would not have had a material effect on our consolidated financial statements. 68 I TEM 8.
Dollar to other currencies during any of the periods presented would not have had a material effect on our consolidated financial statements. 69
Based on our current operations, we believe that our current sources of liquidity, including cash on hand and the New 2024 Revolving Credit Facility, are adequate to meet our cash requirements for the foreseeable future. See “Part II. Item 7.
Based on our current operations, we believe that our current sources of liquidity, including cash on hand and the New 2024 Revolving Credit Facility, are adequate to meet our cash requirements for the next twelve months and for the foreseeable future. See Note 12, “Long-Term Debt” for further discussion of the New Credit Agreement and New Senior Secured Credit Facilities.
Engine Services Engine Services segment revenue increased $594.9 million or 14.7% to $4,644.8 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Engine Services Engine Services segment revenue increased $709.3 million, or 15.3%, to $5,354.0 million for the year ended December 31, 2025, compared to $4,644.7 million for the year ended December 31, 2024.
A $6.2 million loss on debt extinguishments was recorded during the year ended December 31, 2023, due to the write-off of unamortized deferred finance charges and debt discount related to the extinguished portion of the 2019 Term Loan Facilities and 2021 Term Loan Facility (both defined below) related to the refinancing activity. Income tax expense.
A $15.3 million loss on debt extinguishments was recorded during the year ended December 31, 2024 due to the write-off of unamortized deferred finance charges and debt discount related to the extinguished portion of the Prior 2023 Term Loan Facilities and redeemed portion of the Prior Senior Notes related to the refinancing activity, with no similar charges incurred in the year ended December 31, 2025.
Income tax expense was $70.8 million for the year ended December 31, 2024, as compared to $40.2 million for the year ended December 31, 2023, an increase of $30.6 million. Of this increase, $22.2 million was driven by the increase in pre-tax income.
Income tax expense. Income tax expense was $99.4 million for the year ended December 31, 2025, as compared to $70.8 million for the year ended December 31, 2024. This was an increase of $28.7 million, or 40.5%.
The increase is primarily driven by the intangible assets allocated to customer relationships resulting from the Aero Turbine acquisition on August 23, 2024. Acquisition costs. Acquisition costs of $1.4 million for the year ended December 31, 2024 were incurred primarily due to the acquisition of Aero Turbine on August 23, 2024.
Amortization of intangible assets was $98.7 million and $95.5 million for the years ended December 31, 2025 and 2024, respectively. The increase of $3.2 million, or 3.4%, was primarily driven by the intangible assets allocated to customer relationships resulting from the Aero Turbine acquisition on August 23, 2024.
The increase was primarily driven by increases in revenue and the acquisition of Aero Turbine. 60 Liquidity and Capital Resources The following table summarizes select financial data relevant to our liquidity and capital resources as of December 31, 2024 and December 31, 2023: As of December 31, 2024 2023 (in millions) Cash $ 102.6 $ 58.0 Net working capital (total current assets less total current liabilities) 1,211.6 1,066.3 Total debt (including current portion) (1) 2,231.4 3,198.8 Total stockholders' equity 2,373.4 1,146.7 (1) Includes unamortized discounts of $22.5 million and $26.9 million as of December 31, 2024 and 2023, respectively, and unamortized deferred finance charges of $15.7 million and $33.6 million as of December 31, 2024 and 2023, respectively.
Adjusted EBITDA margin of 28.6% compared to 26.1% in the prior year period, was driven by volume and price growth, favorable mix and margin expansion from the Aero Turbine acquisition. 61 Liquidity and Capital Resources The following table summarizes select financial data relevant to our liquidity and capital resources as of December 31, 2025 and December 31, 2024: As of December 31, As of December 31, 2025 2024 (in thousands) Cash $ 289,717 $ 102,581 Net working capital (total current assets less total current liabilities) 1,580,122 1,211,590 Total debt (including current portion) (1) 2,214,605 2,231,426 Total stockholders' equity 2,667,311 2,373,404 (1) Includes unamortized discounts of $19.2 million and $22.5 million as of December 31, 2025 and December 31, 2024, respectively, and unamortized deferred finance charges of $13.4 million and $15.7 million as of December 31, 2025 and December 31, 2024, respectively.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Consolidated statements of cash flows data: (in millions) Net cash provided by operating activities $ 76.3 $ 67.9 Net cash used in investing activities (235.5 ) (112.9 ) Net cash provided by (used in) financing activities 203.8 (14.7 ) Effect of exchange rate changes on cash — (2.4 ) Net increase (decrease) in cash 44.6 (62.1 ) Cash at beginning of period 58.0 120.1 Cash at end of period $ 102.6 $ 58.0 Year Ended December 31, 2024 Net cash provided by operating activities for the year ended December 31, 2024 was $76.3 million.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Consolidated statements of cash flows data: (in thousands) Net cash provided by operating activities $ 316,705 $ 76,330 Net cash used in investing activities (106,402 ) (235,446 ) Net cash (used in) provided by financing activities (25,507 ) 203,756 Effect of exchange rate changes on cash 2,340 (41 ) Net increase in cash 187,136 44,599 Cash at beginning of period 102,581 57,982 Cash at end of period $ 289,717 $ 102,581 Year Ended December 31, 2025 Net cash provided by operating activities for the year ended December 31, 2025 was $316.7 million.
The Company believes that costs incurred are an appropriate measure of progress towards satisfaction of the performance obligation since this measure reasonably depicts the progress of the work effort.
We believe that costs incurred are an appropriate measure of progress towards satisfaction of the performance obligation since this measure reasonably depicts the progress of the work effort. We consider the estimation of total costs to be a critical accounting estimate and require significant judgment.
A discussion and analysis of, and a comparison between, our results of operations for the years ended December 31, 2023 and 2022 can be found in the section entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our final prospectus on Form 424(b)(3) filed with the SEC on October 2, 2024.
For a discussion and analysis of, and a comparison between, our results of operations for the years ended December 31, 2024 and 2023 refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K filed with the SEC on March 12, 2025.
The following table sets forth our total cost of revenue for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in millions) Material $ 3,230.9 $ 2,811.8 Labor 896.4 802.0 Other 355.7 314.2 Total cost of revenue $ 4,483.0 $ 3,928.0 58 Selling, general and administrative expense.
The following table sets forth our total cost of revenue for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Material $ 3,691,654 $ 3,230,899 Labor 1,128,124 896,476 Other 345,282 355,644 Total cost of revenue $ 5,165,060 $ 4,483,019 59 Selling, general and administrative expense.
Component Repair Services Component Repair Services segment revenue increased $79.0 million, or 15.4% to $592.4 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Component Repair Services Segment Adjusted EBITDA increased $48.0 million, or 31.0%, to $202.7 million for the year ended December 31, 2025, from $154.7 million for the year ended December 31, 2024.
Engine Services Segment Adjusted EBITDA increased $91.8 million, or 17.7% to $610.9 for the year ended December 31, 2024 from $519.1 million for the for the year ended December 31, 2023. The increase was primarily driven by increases in revenue.
Engine Services Segment Adjusted EBITDA increased $96.0 million, or 15.7%, to $706.9 million for the year ended December 31, 2025, from $610.9 million for the year ended December 31, 2024.
Significant estimates and judgments are required in determining the provision for income taxes. 57 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2024 and 2023: Year Ended December 31, Change 2024 2023 % (in millions) Revenue $ 5,237.2 $ 4,563.3 15 % Cost of revenue 4,483.0 3,928.0 14 % Selling, general and administrative expense 254.1 202.8 25 % Amortization of intangible assets 95.4 93.7 2 % Acquisition costs 1.4 1.5 (7 )% Operating income 403.3 337.3 20 % Interest expense 282.5 309.6 (9 )% Refinancing costs 23.7 19.9 19 % Loss on debt extinguishment 15.3 6.2 147 % Other income — (3.5 ) (100 )% Income before income taxes 81.8 5.1 1,504 % Income tax expense 70.8 40.2 76 % Net income (loss) $ 11.0 $ (35.1 ) (131 )% Revenue.
Significant estimates and judgments are required in determining the provision for income taxes. 58 Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2025 and 2024: Year ended December 31, Change 2025 2024 $ % (in thousands, except percentages) Revenue $ 6,062,513 $ 5,237,161 $ 825,352 15.8 % Cost of revenue 5,165,060 4,483,019 682,041 15.2 % Selling, general and administrative expense 247,703 254,092 (6,389 ) (2.5 )% Amortization of intangible assets 98,681 95,457 3,224 3.4 % Acquisition costs — 1,374 (1,374 ) (100.0 )% Operating income 551,069 403,219 147,850 36.7 % Interest expense 174,217 282,507 (108,290 ) (38.3 )% Refinancing costs — 23,700 (23,700 ) (100.0 )% Loss on debt extinguishment — 15,255 (15,255 ) (100.0 )% Income before income taxes 376,852 81,757 295,095 360.9 % Income tax expense 99,435 70,783 28,652 40.5 % Net income $ 277,417 $ 10,974 $ 266,443 2,427.9 % Revenue.
Year Ended December 31, 2023 Net cash provided by operating activities for the year ended December 31, 2023 was $67.9 million. The factors affecting our operating cash flows during 2023 were our net loss of $35.1 million and a net change in our operating assets and liabilities of $99.5 million, partially offset by non-cash charges of $202.4 million.
The factors affecting our operating cash flows during the period included net income of $277.4 million and non-cash charges of $201.8 million, partially offset by a $162.5 million change in our operating assets and liabilities.
The definition of Consolidated EBITDA utilized for these debt reporting covenants differs from the definition of Adjusted EBITDA presented in this Annual Report in that it represents Adjusted EBITDA as further adjusted for certain additional items including, among other things, certain start-up costs to give pro forma effect to acquisitions, including resulting synergies, and cost savings.
One such financial reporting metric is Consolidated EBITDA as defined in the New Credit Agreement. The definition of Consolidated EBITDA utilized for these debt reporting covenants differs from the definition of Adjusted EBITDA presented in this Annual Report in that it represents Adjusted EBITDA as further adjusted for certain additional items, as set forth in the New Credit Agreement.
Refinancing costs of $23.7 million were incurred during the year ended December 31, 2024, of which $6.4 million were incurred for the amendments of the Prior Credit Agreement in March and September 2024, and $17.3 million were incurred for the New Credit Agreement in October 2024.
See “—Liquidity and Capital Resources” for further discussion of our debt and financing activities. Refinancing costs. Refinancing costs of $23.7 million associated with the modified portion of the Prior Credit Agreement amendments in March and September 2024 were incurred during the year ended December 31, 2024, with no similar charges incurred in the year ended December 31, 2025.
The non-cash charges primarily consisted of $197.1 million in depreciation and amortization, $15.3 million in amortization of deferred finance charges and discounts, $6.2 million in the loss on debt extinguishment in connection with the amendment of the Prior Credit Agreement during 2023, and $3.2 million in foreign exchange loss, partially offset by $19.8 million in deferred income taxes.
The non-cash charges primarily consisted of $193.7 million in depreciation and amortization, $13.2 million in stock compensation expense and $6.5 million in amortization of deferred finance charges and discounts, partially offset by a $15.8 million decrease in deferred income taxes.
The tax expense and corresponding effective tax rate for 2024 and 2023 were high primarily due to the Global Intangible Low-taxed Income (GILTI) provision which was enacted in 2017 as part of the Tax Cuts and Jobs Act as well as the partial valuation allowance recorded against our interest expense carryforward deferred tax asset under Section 163(j) of the Internal Revenue Code.
The tax expense, and corresponding effective tax rates for the years ended December 31, 2025 and 2024, were higher than the statutory rate of 21.0% primarily due to State income taxes and the Global Intangible Low-taxed Income (“GILTI”) provision which was enacted in 2017 as part of the Tax Cuts and Jobs Act.
These adjustments could be material if our experience is significantly different from our assumptions and estimates.
These adjustments could be material if our experience is significantly different from our assumptions and estimates. Below are those policies applied in preparing our financial statements that management believes are the most dependent on the application of estimates and assumptions.
Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. The Company’s engine utilization contracts with customers generally require monthly payments under normal commercial terms based on flight hours.
Revenue and profit in future periods of contract performance is recognized using the adjusted estimate.
There was no other income recorded for the year ended December 31, 2024 and $3.5 million for the year ended December 31, 2023, due to a 2023 adjustment related to a tax benefit, with no such adjustments in 2024. 59 Segment Results The following table presents revenue by segment, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin: Year Ended December 31, 2024 2023 (in millions, except percentages) Engine Services Segment Revenue $ 4,644.8 $ 4,049.9 Segment Adjusted EBITDA $ 610.9 $ 519.1 Segment Adjusted EBITDA Margin 13.2 % 12.8 % Component Repair Services Segment Revenue $ 592.4 $ 513.4 Segment Adjusted EBITDA $ 154.7 $ 125.3 Segment Adjusted EBITDA Margin 26.1 % 24.4 % For a discussion of Segment Adjusted EBITDA, see Note 24, "Segment Information" to our consolidated financial statements included in this Annual Report.
Further, for the year ended December 31, 2024, the partial valuation allowance recorded against our interest expense carryforward deferred tax asset under Section 163(j) of the Internal Revenue Code also was a driver of the effective tax rate exceeding the statutory rate. 60 Segment Results Comparison of the Years Ended December 31, 2025 and 2024 The following table presents revenue by segment, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin: Year Ended December 31, 2025 2024 (in thousands, except percentages) Engine Services Segment Revenue $ 5,353,953 $ 4,644,739 Segment Adjusted EBITDA $ 706,883 $ 610,906 Segment Adjusted EBITDA Margin 13.2 % 13.2 % Component Repair Services Segment Revenue $ 708,560 $ 592,422 Segment Adjusted EBITDA $ 202,704 $ 154,734 Segment Adjusted EBITDA Margin 28.6 % 26.1 % For a discussion of Segment Adjusted EBITDA, see Note 24, "Segment Information" to our condensed consolidated financial statements included in this Annual Report.
The IPO generated net proceeds from the issuance of primary shares of $ 1,202.8 million after deducting underwriting discounts and commissions of approximately $ 67.1 million as well as estimated offering expenses of $ 8.1 million. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries.
The IPO generated net proceeds from the primary issuance of shares of $1,202.8 million after deducting underwriting discounts and commissions of approximately $67.1 million and estimated offering expenses of $8.1 million. March 2025 Secondary Offering In March 2025, two of the Company’s stockholders (the “Selling Stockholders”), affiliates of The Carlyle Group Inc.
For these contracts, we recognize revenue over time using the input method with revenue being recognized proportionately to costs incurred relative to total expected costs to satisfy the performance obligation. We believe that costs incurred are an appropriate measure of progress towards satisfaction of the performance obligation since this measure reasonably depicts the progress of the work effort.
Most of the our arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct. For these contracts, we recognize revenue over time using the input method with revenue being recognized proportionately to costs incurred relative to total expected costs to satisfy the performance obligation.
Below are those policies applied in preparing our financial statements that management believes are the most dependent on the application of estimates and assumptions. 63 Revenue recognition Revenue is recognized on contracts with customers for arrangements in which services and pricing are fixed and/or determinable and are generally based on customer purchase orders.
Revenue recognition Revenue is recognized on contracts with customers for arrangements in which services and pricing are fixed and/or determinable and are generally based on customer purchase orders. We recognize revenue for performance obligations within a customer contract as the services performed by us enhance customer-controlled assets.
Acquisition costs of $1.5 million for the year ended December 31, 2023 were incurred primarily due to the acquisition of Western Jet Aviation on February 2, 2023. Interest expense. Interest expense was $282.5 million and $309.6 million for the years ended December 31, 2024 and 2023, respectively.
Acquisition costs of $1.4 million for the year ended December 31, 2024 were incurred primarily due to the Aero Turbine acquisition on August 23, 2024. There have been no acquisitions during the year ended December 31, 2025. Interest expense.
Prior ABL Credit Facility On October 31, 2024, concurrent with the closing of the New Credit Agreement, the Company used the proceeds of the New 2024 Term Loan Facilities and the New 2024 Revolving Credit Facility to repay in full amounts outstanding under the ABL Credit Agreement, terminating the debt facility thereunder.
This decrease in interest expense was largely driven by (i) the repayment of the Prior Senior Notes in full on October 3, 2024 concurrent with the Company’s IPO, and (ii) entrance into the New Credit Agreement on October 31, 2024 providing for the New 2024 Term Loan Facilities and the New 2024 Revolving Credit Facility and the use of the proceeds to repay in full amounts outstanding under the Prior Credit Agreement and the Prior ABL Credit Agreement, terminating each of the debt facilities thereunder, and, resulting in a weighted average interest rate of borrowings for the year ended December 31, 2025 of 6.8% compared to 8.7% for the year ended December 31, 2024.
Revenue generated from our military and helicopter end market increased $37.0 million or 56.6%, primarily attributable to the acquisition of Aero Turbine and demand strength on the platforms that we service. Component Repair Services Segment Adjusted EBITDA increased $29.4 million, or 23.5%, to $154.7 million for the year ended December 31, 2024.
Component Repair Services Component Repair Services segment revenue increased $116.2 million, or 19.6%, to $708.6 million for the year ended December 31, 2025, compared to $592.4 million for the year ended December 31, 2024. The increase was driven by growth in military and helicopter and other platforms and the contribution from the Aero Turbine acquisition.

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