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What changed in FTAI Aviation Ltd.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FTAI Aviation Ltd.'s 2023 and 2024 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 2024 report.

+413 added−409 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-26)

Top changes in FTAI Aviation Ltd.'s 2024 10-K

413 paragraphs added · 409 removed · 259 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

45 edited+18 added−25 removed10 unchanged
Biggest changeThe table below provides additional information on the assets in our Aviation Leasing segment: Aviation Assets Widebody Narrowbody Total Aircraft Assets at January 1, 2023 8 98 106 Purchases — 40 40 Sales (2) (11) (13) Transfers (1) (36) (37) Assets at December 31, 2023 5 91 96 Engines Assets at January 1, 2023 40 184 224 Purchases 7 94 101 Sales (17) (24) (41) Transfers 2 (19) (17) Assets at December 31, 2023 32 235 267 Aerospace Products The Aerospace Products segment develops and manufactures through a joint venture, and repairs and sells, through our maintenance facility and exclusivity arrangements, aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines.
Biggest changeThe table below provides additional information on the assets in our Aviation Leasing segment: Aviation Assets Widebody Narrowbody Total Aircraft Assets at January 1, 2024 5 91 96 Purchases — 50 50 Sales — (3) (3) Transfers — (34) (34) Assets at December 31, 2024 5 104 109 Engines Assets at January 1, 2024 32 235 267 Purchases 4 134 138 Sales (13) (1) (14) Transfers — (79) (79) Assets at December 31, 2024 23 289 312 Aerospace Products The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines .
This monitoring includes interacting with our customers regularly to monitor collections, review periodic financial statements and discuss their operating performance. Most of our lease agreements are written with conditions that require reporting on the part of our lessees, and we actively reach out to our lessees to maintain contact and monitor their liquidity positions.
This monitoring includes interacting with our customers and lessees regularly to monitor collections, review periodic financial statements and discuss their operating performance. Most of our lease agreements are written with conditions that require reporting on the part of our lessees, and we actively reach out to our lessees to maintain contact and monitor their liquidity positions.
In some cases, third-party specialists are hired to physically inspect and/or value the target assets. We and our Manager also spend a significant amount of time on structuring our acquisitions to minimize risks while also optimizing expected returns. We employ what we believe to be reasonable amounts of leverage in connection with our acquisitions.
In some cases, third-party specialists are hired to physically inspect and/or value the target assets. We also spend a significant amount of time on structuring our acquisitions to minimize risks while also optimizing expected returns. We employ what we believe to be reasonable amounts of leverage in connection with our acquisitions.
In such circumstances, we will seek to protect our interests through appropriate levels of board representation, minority protections and other structural enhancements. We and our Manager maintain relationships with operators worldwide and, through these relationships, hold direct conversations as to leasing needs and opportunities. Where helpful, we reach out to third parties who assist in leasing our assets.
In such circumstances, we will seek to protect our interests through appropriate levels of board representation, minority protections and other structural enhancements. We maintain relationships with operators worldwide and, through these relationships, hold direct conversations as to leasing needs and opportunities. Where helpful, we reach out to third parties who assist in leasing our assets.
We could incur substantial costs, including cleanup costs, fines and third-party claims for property or natural resource damage and personal injury, as a result of violations of or liabilities under environmental laws and regulations in connection with our or our lessee’s or charterer’s current or historical operations.
We could incur substantial costs, including cleanup costs, fines and third-party claims for property or natural resource damage and personal injury, as a result of violations of or liabilities under environmental laws and regulations in connection with our or our lessee’s current or historical operations.
However, we do not think that we are dependent upon any particular customer, or that the loss of one or more of them would have a material adverse effect on our business or the relevant segment, because of our ability to re-lease assets at similar terms following the loss of any such customer.
However, we do not think that we are dependent upon any particular customer or lessee, or that the loss of one or more of them would have a material adverse effect on our business or the relevant segment, because of our ability to re-lease or resell assets at similar terms following the loss of any such lessee or customer.
See “Risk Factors-Contractual defaults may adversely affect our business, prospects, financial condition, results of operations and cash flows by decreasing revenues and increasing storage, positioning, collection, recovery and lost equipment expenses.” Competition The business of acquiring, managing and marketing aviation and offshore-equipment related assets is highly competitive.
See “Risk Factors-Contractual defaults may adversely affect our business, prospects, financial condition, results of operations and cash flows by decreasing revenues and increasing storage, positioning, collection, recovery and lost equipment expenses.” Competition The business of acquiring, managing and marketing aviation assets is highly competitive.
Market competition for acquisition opportunities includes traditional aviation and offshore energy companies, commercial and investment banks, as well as a growing number of non-traditional participants, such as hedge funds, private equity funds, and other private investors. Additionally, the markets for our products and services are competitive, and we face competition from a number of sources.
Market competition for acquisition opportunities includes traditional aviation companies, commercial and investment banks, as well as a growing number of non-traditional participants, such as hedge funds, private equity funds, and other private investors. Additionally, the markets for our products and services are competitive, and we face competition from a number of sources.
Due diligence on each of our assets always includes a comprehensive review of the asset itself as well as the industry and market dynamics, competitive positioning, and financial and operational performance. Where appropriate, our Manager conducts physical inspections, a review of the credit quality of each of our counterparties, the regulatory environment, and a review of all material documentation.
Due diligence on each of our assets always includes a comprehensive review of the asset itself as well as the industry and market dynamics, competitive positioning, and financial and operational performance. Where appropriate, our Company conducts physical inspections, a review of the credit quality of each of our counterparties, the regulatory environment, and a review of all material documentation.
Our Manager frequently reviews the status of all of our assets, and in the case that any are returning from lease or undergoing repair, outlines our options, which may include the re-lease or sale of that asset. Our Manager plays a central role in developing and executing operational, finance and business development strategies.
Our Company frequently reviews the status of all of our assets, and in the case that any are returning from lease or undergoing repair, outlines our options, which may include the re-lease or sale of that asset. Our Company plays a central role in developing and executing operational, finance and business development strategies.
On a periodic basis, our Manager discusses the status of our acquired assets with our board of directors. In some situations, we may acquire assets through a joint venture entity or own a minority position in an investment entity.
On a periodic basis, our Company discusses the status of our acquired assets with our board of directors. In some situations, we may acquire assets through a joint venture entity or own a minority position in an investment entity.
As an example, we often partner with Maintenance, Repair and Overhaul (“MRO”) facilities in the aviation sector to lease engines and support airlines’ fleet management needs. While we expect to hold our assets for extended periods of time, we and our Manager continually review our assets to assess 8 whether we should sell or otherwise monetize them.
As an example, we partner with Maintenance, Repair and Overhaul (“MRO”) facilities in the aviation sector to lease engines and support airlines’ fleet management needs. While we expect to hold our assets for extended periods of time, we continually review our assets to assess whether we should sell or otherwise monetize them.
Insurance Our leases generally require that our customers carry physical damage and liability insurance providing primary insurance coverage for loss and damage to our assets as well as for related cargo and third parties while the assets are on lease.
Insurance Our leases generally require that our lessees carry physical damage and liability insurance providing primary insurance coverage for loss and damage to our assets as well as for related cargo and third parties while the assets are on lease.
Asset Management Our Manager actively manages and monitors our portfolios of assets on an ongoing basis, and in some cases engages third parties to assist with the management of those assets.
Asset Management The Company actively manages and monitors our portfolios of assets on an ongoing basis, and in some cases engages third parties to assist with the management of those assets.
Sustainability As part of our strategy, we are focused on supporting the transition to a low-carbon economy and aim to provide sustainable aviation and offshore solutions by leveraging our Manager’s expertise and business and financing relationships, as well as our access to capital.
Sustainability As part of our strategy, we are focused on supporting the transition to a low-carbon economy and aim to provide sustainable aviation solutions by leveraging our Company’s expertise and business and financing relationships, as well as our access to capital.
Aspects that will factor into this process include relevant market conditions, the asset’s age, lease profile, relative concentration or remaining expected useful life. Credit Process We and our Manager monitor the credit quality of our various lessees on an ongoing basis.
Aspects that will factor into this process include relevant market conditions, the asset’s age, lease profile, relative concentration or remaining expected useful life. 8 Credit Process We monitor the credit quality of our customers and lessees on an ongoing basis.
Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 16 months.
Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 22 months.
As of and for the year ended December 31, 2023, no customer accounted for more than 10% of our revenue or total accounts receivable, net. We derive a significant percentage of our revenue within specific sectors from a limited number of customers.
As of and for the year ended December 31, 2024, no customer or lessee accounted for more than 10% of our revenue or total accounts receivable, net. We derive a significant percentage of our revenue within specific sectors from a limited number of customers and lessees.
Furthermore, many of our leases and contractual arrangements include credit enhancement elements that provide us with additional collateral or credit support to strengthen our credit position. We are subject to concentrations of credit risk with respect to amounts due from customers on our direct finance leases and operating leases. We attempt to limit credit risk by performing ongoing credit evaluations.
Furthermore, many of our leases and contractual arrangements include credit enhancement elements that provide us with additional collateral or credit support to strengthen our credit position. We are subject to concentrations of credit risk with respect to amounts due from customers and lessees. We attempt to limit credit risk by performing ongoing credit evaluations.
We believe that by investing in a diverse mix of assets, we can select from among the best risk-adjusted investment opportunities. We take a proactive investment approach by identifying key secular trends as they emerge within our target sectors and then pursuing what we believe are the most compelling opportunities within those sectors.
We believe that by investing in a diverse mix of assets, we can select from among the best risk-adjusted investment opportunities. We take a proactive investment approach by identifying key secular trends as they emerge and then pursuing what we believe are the most compelling opportunities.
Our aviation equipment was approximately 77% utilized during the three months ended December 31, 2023, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.
Our aviation equipment was approximately 76% utilized during the three months ended December 31, 2024, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.
In addition to helping us monitor the needs and quality of our customers, we believe these relationships help source additional opportunities and gain insight into attractive opportunities in the aviation and offshore energy sectors. A substantial portion of our revenue has historically been derived from a small number of customers.
In addition to helping us monitor the needs and quality of our customers and lessees, we believe these relationships help source additional opportunities and gain insight into attractive opportunities in the aviation sector. A substantial portion of our revenue has historically been derived from a small number of customers and lessees.
As of December 31, 2023, 76 of our commercial aircraft and 175 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.
As of December 31, 2024, 94 of our commercial aircraft and 181 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.
See “Customers.” Customers Our customers primarily consist of global operators of transportation networks and global industrial companies, including airlines and offshore energy service providers. We maintain ongoing relationships and discussions with our customers and seek to have consistent dialogue.
See “Customers and Lessees.” Customers and Lessees Our customers and lessees primarily consist of global operators of transportation networks and global industrial companies, including airlines. We maintain ongoing relationships and discussions with our customers and lessees and seek to have consistent dialogue.
Our Manager has significant prior experience in all of our target sectors, as well as a network of industry relationships, that we believe positions us well to make successful acquisitions and to actively manage and 6 improve operations and cash flows of our existing and newly-acquired assets.
Our management has significant prior experience, as well as a network of industry relationships, that we believe positions us well to make successful acquisitions and to actively manage and improve operations and cash flows of our existing and newly-acquired assets.
Please refer to Note 12 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for further details regarding our Management Agreement and Services and Profit Sharing Agreement. 7 Our Portfolio We own and acquire high quality aviation and offshore energy equipment that is essential for the transportation of goods and people globally.
Please refer to Note 13 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for further details regarding our Affiliate Transactions. 7 Our Portfolio We own and acquire high quality aviation equipment that is essential for the transportation of goods and people globally.
Our Strategy In general, we seek to own a diverse mix of high-quality aviation assets and equipment within our target sectors that generate predictable cash flows in markets that we believe provide the potential for strong long-term growth and attractive returns on deployed capital.
(“Holdco”) for the purpose of acquiring, managing and disposing of transportation and transportation-related equipment assets. Our Strategy In general, we seek to own a diverse mix of high-quality aviation assets and equipment that generate predictable cash flows in markets that we believe provide the potential for strong long-term growth and attractive returns on deployed capital.
Our engine and module sales are facilitated through The Module Factory, a dedicated commercial maintenance program, designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines, performed by a third party.
Our engine, module and parts sales are facilitated through a dedicated commercial maintenance program, designed to focus on modular and parts repair and refurbishment of CFM56-7B and CFM56-5B engines.
Our principal executive offices are located at 1345 Avenue of the Americas, New York, New York 10105. FTAI Aviation Ltd. files annual, quarterly and current reports, proxy statements and other information required by the Exchange Act, with the SEC. Our SEC filings are available to the public from the SEC’s internet site at http://www.sec.gov. Our internet site is http://www.www.ftaiaviation.com.
FTAI Aviation Ltd. files annual, quarterly and current reports, proxy statements and other information required by the Exchange Act, with the SEC. Our SEC filings are available to the public from the SEC’s internet site at http://www.sec.gov. Our internet site is http://www.www.ftaiaviation.com.
Used serviceable material is sold through our exclusive partnership with AAR Corp, who is responsible for the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool. We also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.
In addition, other serviceable used modules and parts are sold through our ex clusive partnership, who is responsible for the teardown, repair, marketing and sales of parts from our CFM56 engine pool. We also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.
In addition, changes to environmental standards or regulations in the industries in which we operate could limit the economic life of the assets we acquire or reduce their value, and also require us to make significant additional investments in order to maintain compliance.
In addition, changes to environmental standards or regulations in the aviation industry, including as a result of executive actions or policies, could limit the economic life of the assets we acquire or reduce their value, and also require us to make significant additional investments in order to maintain compliance.
Aviation Leasing As of December 31, 2023, in our Aviation Leasing segment, we own and man age 363 aviation assets, consisting of 96 commercial aircraft and 267 engines, including eight aircraft and seventeen engines that were still located in Russia.
Aviation Leasing As of December 31, 2024, in our Aviation Leasing segment, we own and manage 421 aviation assets, consisting of 109 commercial aircraft and 312 engines, including eight aircraft and seventeen engines that were still located in Russia.
Business Our Company FTAI Aviation Ltd., a Cayman Islands exempted company, was formed on December 8, 2017 and is the surviving parent company upon completion of the transactions completed in that certain Agreement and Plan of Merger (the “Merger”) on November 10, 2022 between Fortress Transportation and Infrastructure Investors LLC and FTAI Aviation Ltd. and certain other parties thereto.
FTAI is the surviving parent company upon completion of the transactions completed in that certain Agreement and Plan of Merger (the “Merger”) on November 10, 2022 between Fortress Transportation and Infrastructure Investors LLC and FTAI Aviation Ltd. and certain other parties thereto. Our business has been, and will continue to be, conducted through FTAI Aviation Holdco Ltd.
We believe that sourcing assets both globally and through multiple channels will enable us to find the most attractive opportunities. We are selective in the assets we pursue and efficient in the manner in which we pursue them. Once attractive opportunities are identified, our Manager performs detailed due diligence on each of our potential acquisitions.
We are selective in the assets we pursue and efficient in the manner in which we pursue them. Once attractive opportunities are identified, our Company performs detailed due diligence on each of our potential acquisitions.
We compete with other market participants on the basis of industry knowledge, availability of capital, and deal structuring experience and flexibility, among other things.
These competitors include engine and aircraft parts manufacturers, aircraft and aircraft engine lessors, airline and aircraft services and repair companies, and aircraft spare parts distributors. We compete with other market participants on the basis of industry knowledge, availability of capital, and deal structuring experience and flexibility, among other things.
We seek to acquire assets and businesses that we believe operate in sectors with long-term macroeconomic growth opportunities and that have significant cash flow and upside potential from earnings growth and asset appreciation. We approach markets and opportunities by first developing an asset acquisition strategy with our Manager and then pursuing optimal opportunities within that strategy.
Asset Acquisition Process Our strategy is to acquire assets that are essential to the transportation of goods and people globally. We seek to acquire assets and businesses that we believe operate in sectors with long-term macroeconomic growth opportunities and that have significant cash flow and upside potential from earnings growth and asset appreciation.
We believe that as owners of both aviation and offshore assets, we have access to more opportunities and can be a more attractive counterparty to the users of our assets.
We believe one of our strengths is our ability to create attractive follow-on investment opportunities and deploy incremental capital within our existing portfolio. We believe that as owners of aviation assets, we have access to more opportunities and can be a more attractive counterparty to the users of our assets.
In addition to relying on our own experience, we source new opportunities through our Manager’s network of industry relationships in order to find, structure and execute attractive acquisitions. These relationships include senior executives at industry leading operators, end users of the assets as well as banks, lenders and other asset owners.
These relationships include senior executives at industry leading operators, end users of the assets as well as banks, lenders and other asset owners. We believe that sourcing assets both globally and through multiple channels will enable us to find the most attractive opportunities.
We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth. We believe that there are a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities.
We believe that there is a large number of acquisition opportunities in our markets and that our expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities. As of December 31, 2024, we had total consolidated assets of $4.0 billion and total equity of $81.4 million.
Our Aerospace Products business develops and manufactures through a joint venture, and repairs and sells, through our maintenance facility and exclusivity arrangements, aftermarket components for aircraft engines.
Our leases generally provide for long-term contractual cash flow with high cash-on-cash yields and include structural protections to mitigate credit risk. Our Aerospace products business develops and manufactures, through a joint venture, and repairs and sells, through our maintenance facilities and exclusivity arrangements, aftermarket components for aircraft engines.
Except as otherwise specified, “we”, “us”, “our”, “FTAI”, “FTAI Aviation” or “the Company” refer to us and our consolidated subsidiaries. Our business has been, and will continue to be, conducted through FTAI Aviation Holdco Ltd. (“Holdco”) for the purpose of acquiring, managing and disposing of transportation and transportation-related equipment assets.
Item 1. Business Our Company FTAI Aviation Ltd. (Nasdaq: FTAI) is, a Cayman Islands exempted company, except as otherwise specified, “we”, “us”, “our”, “FTAI”, “FTAI Aviation” or “the Company” refer to us and our consolidated subsidiaries. We own, lease and sell aviation equipment.
Aviation equipment assets are typically long-lived, moveable and leased by us on either operating leases or finance leases to companies that provide transportation services. Our leases generally provide for long-term contractual cash flow with high cash-on-cash yields and include structural protections to mitigate credit risk.
As of December 31, 2024, our operations consisted of Aviation Leasing and Aerospace Products. Our Aviation Leasing b usiness acquires assets that are designed to carry cargo or people. Aviation equipment assets are typically long-lived, moveable and leased by us on either operating leases or finance leases to companies that provide transportation services.
These relationships include senior executives at lessors and operators, end users of aviation and offshore energy assets, as well as banks, lenders and other asset owners. Asset Acquisition Process Our strategy is to acquire assets that are essential to the transportation of goods and people globally. We acquire assets that are used by major operators of transportation networks.
These relationships include senior executives at lessors and operators, end users of aviation assets, as well as banks, lenders and other asset owners. On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors.
We believe our Manager’s experience in the aviation and offshore industries and our access to capital, in addition to our focus on diverse asset classes and customers, provides a competitive advantage versus competitors that maintain a single sector focus.
We believe our Company’s experience in the aviation industry, in both leasing and maintenance and our access to capital provide a competitive advantage.
To facilitate attraction and retention, we strive to create a diverse, inclusive, and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits programs.
Our human capital management objectives include identifying, recruiting, retaining, incentivizing and integrating both existing and new employees. To attract and retain talent, we strive to create an inclusive and safe workplace, offering opportunities for career growth and development, supported by strong compensation and benefits programs.
Removed
We are externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, which has a dedicated team of experienced professionals focused on the acquisition of transportation and infrastructure assets since 2002.
Added
We also develop and manufacture through a joint venture, and repair and sell, through our maintenance facilities and exclusivity arrangements, aftermarket components for aircraft engines. We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation.
Removed
On May 22, 2023, Fortress and Mubadala Investment Company, through its wholly owned asset management subsidiary Mubadala Capital (“Mubadala”), announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank Group Corp. (“SoftBank”).
Added
The first partnership under the initiative (the “2025 Partnership”) will focus on acquiring 737NG and A320ceo aircraft. 6 The Strategic Capital Initiative, and its related partnerships, will allow us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale.
Removed
After the closing of the transaction, Fortress will continue to operate as an independent investment manager under the Fortress brand, with autonomy over investment processes and decision making, personnel and operations. We own and acquire high quality aviation equipment that is essential for the transportation of goods and people globally. Additionally, we own and lease offshore energy equipment.
Added
We have agreed that the 2025 Partnership, and follow-on partnerships, will be the primary buyer of all future on-lease 737NG and A320ceo aircraft.
Removed
As of December 31, 2023, we had total co nsolidated assets of $3.0 billion and total equity of $175.9 million. As of December 31, 2023, our operations consisted of Aviation Leasing and Aerospace Products. Our Aviation Leasing b usiness acquires assets that are designed to carry cargo or people.
Added
In addition, the 2025 Partnership has agreed to acquire 46 on-lease narrowbody aircraft from us for an estimated net purchase price of $549 million and has signed an agreement through which our MRE business will exclusively provide replacement aircraft engines and modules for the life of the partnership.
Removed
We believe one of our strengths is our ability to create attractive follow-on investment opportunities and deploy incremental capital within our existing portfolio. Within each sector, we consider investments in aviation and offshore assets, including equipment that we lease to operators.
Added
We will provide aircraft management services to the 2025 Partnership, and the Company will receive customary, market-based compensation for providing such services. The Company has also committed to make a minority investment in the 2025 Partnership. We expect to provide aircraft management services to, and make minority investments in, future partnerships.
Removed
Management Agreement and Services and Profit Sharing Agreement On July 31, 2022, in connection with our spin-off, we entered into a new management agreement with the Manager (the “Management Agreement”), an affiliate of Fortress, pursuant to which the Manager is paid annual fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto.
Added
We approach markets and opportunities by first developing an asset acquisition strategy and then pursuing optimal opportunities within that strategy. In addition to relying on our own experience, we source new opportunities through our network of industry relationships in order to find, structure and execute attractive acquisitions.
Removed
On November 10, 2022, in connection with the closing of the Merger, we entered into a Services and Profit Sharing Agreement, pursuant to which the Master GP is entitled to receive incentive payments on substantially similar terms as it was entitled to receive such payments prior to the Merger.
Added
Internalization of Management On May 28, 2024, the Company entered into definitive agreements with the Former Manager and Master GP to internalize the Company’s management function.
Removed
Corporate and Other In addition to the above investments, our Corporate and Other segment includes offshore energy related assets which consist of vessels and equipment that support offshore oil and gas activities and are typically subject to operating leases.
Added
As part of the termination of the Management Agreement, the Company (i) agreed to pay the Former Manager (for itself and on behalf of the Master GP, as applicable) $150.0 million (the “Cash Consideration”), the compensation accrued and payable, but not yet paid, under the Management Agreement and the expenses that were reimbursable, but not yet reimbursed, under the Management Agreement; (ii) issued to the Former Manager (for itself and on behalf of the Master GP, as applicable) the Share Consideration; (iii) purchased from Master GP all of its partnership interests in FTAI Aviation Holdco Ltd., a subsidiary of the Company, in exchange for $30 thousand.
Removed
These competitors include engine and aircraft parts manufacturers, aircraft and aircraft engine lessors, airline and aircraft services and repair companies, aircraft spare parts distributors, offshore services providers, maritime equipment lessors and other transportation equipment lessors and operators.
Added
Following the Internalization, the Company no longer pays management fees or incentive distributions to the Former Manager and Master GP. In connection with the termination of the Management Agreement, the Company also entered into a Transition Services Agreement with the Former Manager.
Removed
Certain of our current sustainability solutions and investments are highlighted below, and we expect to continue to explore additional sustainability-related opportunities. Aerospace 9 As previously announced, in December 2021 we entered into an agreement with AAR CORP. (NYSE: AIR) to create Serviceable Engine Products, an exclusive seven-year CFM56 used serviceable material (“USM”) partnership.
Added
Under the Transition Services Agreement, the Former Manager is required to continue to provide the services that are reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025.
Removed
The partnership aims to build USM inventory for the global aviation aftermarket and our own consumption at The Module Factory™, a dedicated commercial maintenance program, designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines, performed by a third party.
Added
The Company is required to continue to provide the Reverse Services until the later to occur of the dissolution or sale of the entities receiving Reverse Services.
Removed
Through its worldwide network, AAR is expected to manage the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool totaling over 200 engines and growing. We believe our partnership with AAR will help maximize the life of our engine assets and reduce our carbon footprint and environmental impact.
Added
The Transition Services Agreement may be terminated earlier (x) by mutual agreement of the parties, (y) by either the Former Manager or the Company in the event of a material breach by the non-terminating party that is not cured within thirty (30) days following written notification thereof, or (z) by the Former Manager if the Company fails to pay any undisputed sum overdue and payable for a period of at least thirty (30) days.
Removed
Human Capital Management Our Manager provides a management team and other professionals who are responsible for implementing our business strategy and performing certain services for us, subject to oversight by our board of directors. As of December 31, 2023, we also have app roximately 170 employees at certain subsidiarie s across our business segments.
Added
Certain of our current sustainability solutions and investments are highlighted below, and we expect to continue to explore additional sustainability-related opportunities. 9 Human Capital Management We had 580 full-time employees as of December 31, 2024. Approximately 68% of our workforce in Canada is covered by collective bargaining agreements.
Removed
We consider our relationship with our employees to be good and we focus heavily on employee engagement. We have invested substantial time and resources in building our team, and our human capital management objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
Added
We have not encountered any significant union-related work stoppages and maintain satisfactory relationships with our employees and labor unions. We value our relationship with our employees and place significant emphasis on employee engagement. We have invested substantial time and resources in building our team.
Removed
Conflicts of Interest Although we have established certain policies and procedures designed to mitigate conflicts of interest, there can be no assurance that these policies and procedures will be effective in doing so. It is possible that actual, potential or perceived conflicts of interest could give rise to investor dissatisfaction, litigation or regulatory enforcement actions.
Added
Conflicts of Interest Potential conflicts of interest may arise with respect to our decisions regarding how to allocate investment opportunities between us and partnerships in our Strategic Capital Initiative. Allocating investment opportunities appropriately frequently involves significant and subjective judgments.
Removed
One or more of our officers and directors have responsibilities and commitments to entities other than us. In addition, we do not have a policy that expressly prohibits our directors, officers, security holders or affiliates from engaging in business activities of the types conducted by us for their own account.
Added
Investors in our Strategic Capital Initiative and our shareholders may perceive conflicts of interest regarding such investment decisions, which could harm our reputation with such investors and our shareholders.
Removed
See “Risk Factors-Risks Related to Our Manager-There are conflicts of interest in our relationship with our Manager.” Our key agreements, including our Management Agreement, the services and profit sharing agreement (the “Services and Profit Sharing Agreement”) with our subsidiary Fortress Transportation and Infrastructure Investors LLC and Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”) and our amended and restated memorandum and articles of association (as amended from time to time, the ‘‘Articles’’) were negotiated among related parties, and their respective terms, including fees and other amounts payable, may not be as favorable to us as terms negotiated on an arm’s-length basis with unaffiliated parties.
Added
See “Risks Related to Our Business-Our Strategic Capital Initiative involves certain risks which could adversely affect our business, prospects, financial condition, results of operations and cash flows.” Where Readers Can Find Additional Information FTAI Aviation Ltd. is a Cayman Islands exempted company. Our principal executive offices are located at 415 West 13th Street, New York, New York 10014.
Removed
Our independent directors may not vigorously enforce the provisions of our Management Agreement against our Manager. For example, our independent directors may refrain from terminating our Manager because doing so could result in the loss of key personnel. We may compete with entities affiliated with our Manager or Fortress for certain target assets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

106 edited+70 added−81 removed138 unchanged
Biggest changeIf any such regulations or sanctions affect the asset operators that are our customers, our business, prospects, financial condition, results of operations and cash flows may be materially adversely affected. 15 Certain of our assets are subject to purchase options held by the charterer or lessee of the asset which, if exercised, could reduce the size of our asset base and our future revenues.
Biggest changeIf we or any of our subsidiaries are deemed to be out of compliance with any such rules and regulations, we may be subject to civil liability, criminal liability and/or regulatory sanctions, which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
As a result, we may, directly or indirectly, be exposed to political and other uncertainties, including risks of: 16 • terrorist acts, armed hostilities, war and civil disturbances; • acts of piracy; • potential cybersecurity attacks; • significant governmental influence over many aspects of local economies; • seizure, nationalization or expropriation of property or equipment; • repudiation, nullification, modification or renegotiation of contracts; • limitations on insurance coverage, such as war risk coverage, in certain areas; • political unrest; • foreign and U.S. monetary policy and foreign currency fluctuations and devaluations; • the inability to repatriate income or capital; • complications associated with repairing and replacing equipment in remote locations; • import-export quotas, wage and price controls, imposition of trade barriers; • U.S. and foreign sanctions or trade embargoes; • restrictions on the transfer of funds into or out of countries in which we operate; • compliance with U.S.
As a result, we may, directly or indirectly, be exposed to political and other uncertainties, including risks of: • terrorist acts, armed hostilities, war and civil disturbances; • acts of piracy; • potential cybersecurity attacks; • significant governmental influence over many aspects of local economies; • seizure, nationalization or expropriation of property or equipment; • repudiation, nullification, modification or renegotiation of contracts; • limitations on insurance coverage, such as war risk coverage, in certain areas; • political unrest; • foreign and U.S. monetary policy and foreign currency fluctuations and devaluations; 16 • the inability to repatriate income or capital; • complications associated with repairing and replacing equipment in remote locations; • import-export quotas, wage and price controls, imposition of trade barriers; • U.S. and foreign sanctions or trade embargoes; • restrictions on the transfer of funds into or out of countries in which we operate; • compliance with U.S.
If we are not able to renew or obtain new charters or leases in direct continuation, or if new charters or leases are entered into at rates substantially below the existing rates or on terms otherwise less favorable compared to existing contractual terms, or if we are unable to sell assets for which we are unable to obtain new contracts or leases, our business, prospects, financial condition, results of operations and cash flows could be materially adversely affected.
If we are not able to renew or obtain new leases in direct continuation, or if new leases are entered into at rates substantially below the existing rates or on terms otherwise less favorable compared to existing contractual terms, or if we are unable to sell assets for which we are unable to obtain new contracts or leases, our business, prospects, financial condition, results of operations and cash flows could be materially adversely affected.
While we typically maintain liability insurance coverage and typically require our lessees to provide us with indemnity against certain losses, the insurance coverage is subject to large deductibles, limits on maximum coverage and significant exclusions and may not be sufficient or available to protect against any or all liabilities and such indemnities may not cover or be sufficient to protect us against losses arising from environmental damage.
While we typically maintain liability insurance coverage and typically require our lessees to provide us with indemnity against certain losses, the insurance coverage is subject to large deductibles, limits on maximum coverage and significant exclusions and may 20 not be sufficient or available to protect against any or all liabilities and such indemnities may not cover or be sufficient to protect us against losses arising from environmental damage.
As a result, lessees or charterers that operate in emerging market countries may be more likely to default under their contractual obligations than those that operate in developed countries. Liquidity and volatility limitations in these markets may also adversely affect our ability to dispose of our assets at the best price available or in a timely manner.
As a result, lessees that operate in emerging market countries may be more likely to default under their contractual obligations than those that operate in developed countries. Liquidity and volatility limitations in these markets may also adversely affect our ability to dispose of our assets at the best price available or in a timely manner.
Entry into certain lines of business may subject us to new laws 17 and regulations and may lead to increased litigation and regulatory risk. Many types of transportation assets, including certain aviation assets, are subject to registration requirements by U.S. governmental agencies, as well as foreign governments if such assets are to be used outside of the United States.
Entry into certain lines of business may subject us to new laws and regulations and may lead to increased litigation and regulatory risk. Many types of transportation assets, including certain aviation assets, are subject to registration requirements by U.S. governmental agencies, as well as foreign governments if such assets are to be used outside of the United States.
Until they are discharged, these liens could impair our ability to repossess, re-lease or sell our assets, and to the extent our lessees or charterers do not comply with their obligations to discharge any liens on the applicable assets, we may find it necessary to pay the claims secured by such liens in order to repossess such assets.
Until they are discharged, these liens could impair our ability to repossess, re-lease or sell our assets, and to the extent our lessees do not comply with their obligations to discharge any liens on the applicable assets, we may find it necessary to pay the claims secured by such liens in order to repossess such assets.
If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our ordinary share price or trading volume to decline and our ordinary shares to be less liquid. Item 1B. Unresolved Staff Comments We have no unresolved staff comments. 27
If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our ordinary share price or trading volume to decline and our ordinary shares to be less liquid. Item 1B. Unresolved Staff Comments We have no unresolved staff comments.
In addition, changes to environmental standards or regulations in the industries in which we operate could limit the 19 economic life of the assets we acquire or reduce their value, and also require us to make significant additional investments in order to maintain compliance, which would negatively impact our cash flows and results of operations.
In addition, changes to environmental standards or regulations in the industries in which we operate could limit the economic life of the assets we acquire or reduce their value, and also require us to make significant additional investments in order to maintain compliance, which would negatively impact our cash flows and results of operations.
In addition, we may be subject to an additional U.S. federal branch profits tax on our effectively connected earnings and profits at a rate of 30%. The imposition of such taxes could adversely affect our business and would result in decreased cash available for distribution to our shareholders.
In addition, we may be subject to an additional U.S. federal branch profits tax on our effectively connected earnings and profits at a rate of 30%. The imposition of such taxes could adversely affect our business and would result in decreased cash 22 available for distribution to our shareholders.
In addition, if we 13 dispose of an asset for a price that is less than the depreciated book value of the asset on our balance sheet or if we determine that an asset’s value has been impaired, we will recognize a related charge in our consolidated statement of operations and such charge could be material.
In addition, if we dispose of an asset for a price that is less than the depreciated book value of the asset on our balance sheet or if we determine that an asset’s value has been impaired, we will recognize a related charge in our Consolidated Statement of Operations and such charge could be material.
We enter into leases and charters with respect to some of our assets pursuant to which the lessees are primarily responsible for many obligations, which generally include complying with all governmental requirements applicable to the lessee or charterer, including operational, maintenance, government agency oversight, registration requirements and other applicable directives.
We enter into leases with respect to some of our assets pursuant to which the lessees are primarily responsible for many obligations, which generally include complying with all governmental requirements applicable to the lessee or charterer, including operational, maintenance, government agency oversight, registration requirements and other applicable directives.
In addition, the cost of repairing or replacing damaged assets could be considerable. Repeated or prolonged interruption may result in temporary or permanent loss of customers, substantial litigation or penalties for regulatory or contractual non-compliance, and any loss from such events may not be recoverable under relevant insurance policies.
In addition, the cost of repairing or replacing damaged assets could be considerable. Repeated or prolonged interruption may result in temporary or permanent loss of customers, substantial litigation or penalties for regulatory or contractual non-compliance, and any loss from such events may not be recoverable under relevant 19 insurance policies.
In such case, such U.S. source rental income would be subject to U.S. federal income taxation at the maximum corporate rate as well as state and local taxation. In addition, the Company or such subsidiary would be subject to the U.S. federal branch profits tax on its effectively 24 connected earnings and profits at a rate of 30%.
In such case, such U.S. source rental income would be subject to U.S. federal income taxation at the maximum corporate rate as well as state and local taxation. In addition, the Company or such subsidiary would be subject to the U.S. federal branch profits tax on its effectively connected earnings and profits at a rate of 30%.
We sell aircraft components and replacement parts. If aircraft or engines for which we offer aircraft components and replacement parts are retired or grounded for prolonged periods of time and there are fewer aircraft that require these components or parts, our revenues may decline as well as the value of any related inventory.
If aircraft or engines for which we offer aircraft components and replacement parts are retired or grounded for prolonged periods of time and there are fewer aircraft that require these components or parts, our revenues may decline as well as the value of any related inventory.
Terrorist attacks may negatively affect our operations. Such attacks have contributed to economic instability in the United States and elsewhere, and further acts of terrorism, violence or war could similarly affect world trade and the industries in which we and our customers operate.
Terrorist attacks may negatively affect our operations. Such attacks have contributed to economic instability in the United States and elsewhere, and further acts of terrorism, violence or war could similarly affect world trade and the industries in which we and our customers and lessees operate.
In addition, when counterparties default, we may fail to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently lease, charter or sell them.
In addition, when counterparties default, we may fail to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently lease or sell them.
Failure of a lessee or charterer to perform required maintenance during the term of a lease or charter could result in a decrease in value of an asset, an inability to re-lease or charter an asset at favorable rates, if at all, or a potential inability to utilize an asset.
Failure of a lessee or charterer to perform required maintenance during the term of a lease or charter could result in a 15 decrease in value of an asset, an inability to re-lease or charter an asset at favorable rates, if at all, or a potential inability to utilize an asset.
Any failure by our lessees or charterers to meet their obligations to perform required scheduled maintenance or our inability to maintain our assets could materially adversely affect our business, prospects, financial condition, results of operations and cash flows.
Any failure by our lessees to meet their obligations to perform required scheduled maintenance or our inability to maintain our assets could materially adversely affect our business, prospects, financial condition, results of operations and cash flows.
While we target the entry into contracts with credit-worthy counterparties, no assurance can be given that such counterparties will perform their obligations during the term of the leases, charters or other contractual arrangements.
While we target the entry into contracts with credit-worthy counterparties, no assurance can be given that such counterparties will perform their obligations during the term of the leases or other contractual arrangements.
In addition, some of our competitors may have longer operating histories, greater financial resources and lower costs of capital than us, and consequently, may be able to compete more effectively in one or more of our target markets.
Some of our competitors may have longer operating histories, greater financial resources and lower costs of capital than us, and consequently, may be able to compete more effectively in one or more of our target markets.
The supply chains for our business could also be disrupted by external events such as natural disasters, extreme weather events, pandemics, labor disputes, governmental actions and legislative or regulatory changes.
The supply chains for our business could also be disrupted by external events such as natural disasters, extreme weather events, pandemics, labor disputes, governmental actions such as tariffs and legislative or regulatory changes.
In addition, economic instability in emerging markets could adversely affect the value of our assets subject to leases or charters in such countries, or the ability of our lessees or charters, which operate in these markets, to meet their contractual obligations.
In addition, economic instability in emerging markets could adversely affect the value of our assets subject to leases in such countries, or the ability of our lessees, which operate in these markets, to meet their contractual obligations.
The risk factors generally have been separated into the following categories: risks related to our business, risks related to our Manager, risks related to taxation and risks related to the Company’s shares. However, these categories do overlap and should not be considered exclusive.
The risk factors generally have been separated into the following categories: risks related to our business, risks related to taxation and risks related to the Company’s shares. However, these categories do overlap and should not be considered exclusive.
Although our lease and charter agreements generally require the counterparties to indemnify us against all damages arising out of the use of our assets, and we carry insurance to potentially offset any costs in the event that our customer indemnifications prove to be insufficient, our insurance does not cover certain types of terrorist attacks, and we may not be fully protected from liability or the reputational damage that could arise from a terrorist attack which utilizes our assets.
Although our lease and charter agreements generally require the counterparties to indemnify us against all damages arising out of the use of our assets, and we carry insurance to potentially offset any costs in the event that our lessee indemnifications prove to be insufficient, our insurance does not cover certain types of terrorist attacks, and we may not be fully protected from liability or the reputational damage that could arise from a terrorist attack which utilizes our assets.
If the price at which our customers receive for their transportation services decreases as a result of an oversupply in the marketplace, then our customers may be forced to reduce their prices in order to attract business (which may have an adverse effect on their ability to meet their contractual lease obligations to us), or may seek to renegotiate or terminate their contractual lease arrangements with us to pursue a lower-priced opportunity with another lessor, which may have a direct, adverse effect on us.
If the price at which our lessees receive for their transportation services decreases as a result of an oversupply in the marketplace, then our lessees may be forced to reduce their prices in order to attract business (which may have an adverse effect on their ability to meet their contractual lease obligations to us), or may seek to renegotiate or terminate their contractual lease arrangements with us to pursue a lower-priced opportunity with another lessor, which may have a direct, adverse effect on us.
As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers. 20 Our corporate affairs are governed by our Articles, the Companies Act (As Revised) of the Cayman Islands (the ‘‘Cayman Companies Act’’) and the common law of the Cayman Islands.
As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers. 21 Our corporate affairs are governed by our Articles, the Companies Act (As Revised) of the Cayman Islands (the ‘‘Cayman Companies Act’’) and the common law of the Cayman Islands.
We could be negatively impacted by environmental, social, and governance (ESG) and sustainability-related matters. 14 Governments, investors, customers, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving. We have announced, and may in the future announce, sustainability-focused investments, partnerships and other initiatives and goals.
We could be negatively impacted by environmental, social, and governance (ESG) and sustainability-related matters. Governments, investors, customers, lessees, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving. We have announced, and may in the future announce, sustainability-focused investments, partnerships and other initiatives and goals.
Our inability to fill our supply needs could jeopardize our ability to fulfill obligations under customer contracts, which could result in reduced revenues and profits, contract penalties or terminations, and damage to customer relationships. Further, increased costs of such components could reduce our profits if we were unable to pass along such price in-creases to our customers.
Our inability to fill our supply needs could jeopardize our ability to fulfill obligations under contracts, which could result in reduced revenues and profits, contract penalties or terminations, and damage to lessee and customer relationships. Further, increased costs of such components could reduce our profits if we were unable to pass along such price in-creases to our customers and lessees.
Depending on the specific sector, the risk of contractual defaults may be elevated due to excess capacity as a result of oversupply during the most recent economic downturn. We lease assets to our customers pursuant to fixed-price contracts, and our customers then seek to utilize those assets to transport goods and provide services.
Depending on the specific sector, the risk of contractual defaults may be elevated due to excess capacity as a result of oversupply during the most recent economic downturn. We lease assets to our lessees pursuant to fixed-price contracts, and our lessees then seek to utilize those assets to transport goods and provide services.
Any of these or other risks could adversely impact our customers’ international operations which could materially adversely impact our operating results and growth opportunities.
Any of these or other risks could adversely impact our customers’ and lessees’ international operations which could materially adversely impact our operating results and growth opportunities.
Global economic downturns could have an adverse impact on passenger and cargo traffic levels and consequently our lessees’ and charterers’ business, which may in turn result in a significant reduction in revenues, earnings and cash flows, difficulties accessing capital and a deterioration in the value of our assets.
Global economic downturns could have an adverse impact on passenger and cargo traffic levels and consequently our customers’ and lessees’ business, which may in turn result in a significant reduction in revenues, earnings and cash flows, difficulties accessing capital and a deterioration in the value of our assets.
Cross-default provisions in our debt agreements could cause an event of default under one debt agreement to trigger an event of default under our other debt agreements.
Cross-default provisions in our debt agreements could cause an event of default under one debt agreement to trigger an event of 18 default under our other debt agreements.
Failure by our customers or, in certain circumstances, by us, to obtain certain licenses and approvals could negatively affect our ability to conduct our business. In addition, the shipment of goods, services and technology across international borders subjects the operation of our assets to international trade laws and regulations.
Failure by our lessee or, in certain circumstances, by us, to obtain certain licenses and approvals could negatively affect our ability to conduct our business. In addition, the shipment of goods, services and technology across international borders subjects the operation of our assets to international trade laws and regulations.
Cash flows from our assets are substantially impacted by our ability to collect compensation and other amounts to be paid in respect of such assets from the customers with whom we enter into leases, charters or other contractual arrangements.
Cash flows from our assets are substantially impacted by our ability to collect compensation and other amounts to be paid in respect of such assets from the lessees with whom we enter into leases or other contractual arrangements with lessees or customers.
In addition, limitations on the availability of capital, higher costs of capital for financing expenditures or the desire to preserve liquidity, may cause our current or prospective customers to make reductions in future capital budgets and spending.
In addition, limitations on the availability of 10 capital, higher costs of capital for financing expenditures or the desire to preserve liquidity, may cause our current or prospective customers and lessees to make reductions in future capital budgets and spending.
Our board of directors has adopted the Incentive Plan, which provides for the grant of equity-based awards, including restricted shares, stock options, stock appreciation rights, performance awards, restricted share units, tandem awards and other equity-based and non-equity based awards, in each case to our Manager, to the directors, officers, employees, service providers, consultants and advisors of our Manager who perform services for us, and to our directors, officers, employees, service providers, consultants and advisors.
Our board of directors has adopted the Incentive Plan, which provides for the grant of equity-based awards, including restricted shares, stock options, stock appreciation rights, performance awards, restricted share units, tandem awards and other equity-based and non-equity based awards, in each case the Former Manager, to the directors, officers, employees, service providers, consultants and advisors of the Former Manager who performed services for us, and to our directors, officers, employees, service providers, consultants and advisors.
Inherent in the nature of the leases, charters and other arrangements for the use of such assets is the risk that we may not receive, or may 12 experience delay in realizing, such amounts to be paid.
Inherent in the nature of the leases and other arrangements for the use of such assets is the risk that we may not receive, or may experience delay in realizing, such amounts to be paid.
In addition, terrorist attacks or hostilities may directly impact airports or aircraft or our physical facilities or those of our customers. In addition, it is also possible that our assets could be involved in a terrorist attack or other hostilities.
In addition, terrorist attacks or hostilities may directly impact airports or aircraft or our physical facilities or those of our lessees. In addition, it is also possible that our assets could be involved in a terrorist attack or other hostilities.
We utilize leverage to finance many of our asset acquisitions, which entitles certain lenders to cash flows prior to retaining a return on our assets. While our Manager targets using only what we believe to be reasonable leverage, our strategy does not limit the amount of leverage we may incur with respect to any specific asset.
We utilize leverage to finance many of our asset acquisitions, which entitles certain lenders to cash flows prior to retaining a return on our assets. While we target using only what we believe to be reasonable leverage, our strategy does not limit the amount of leverage we may incur with respect to any specific asset.
Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs and liabilities. While we devote substantial resources to maintaining adequate levels of cyber-security, our resources and technical sophistication may not be adequate to prevent all types of cyberattacks.
Such losses could harm our reputation and result in competitive disadvantages, litigation, regulatory enforcement actions, lost revenues, additional costs and liabilities. While we devote substantial resources to maintaining adequate levels of cybersecurity, our resources and technical sophistication may not be adequate to prevent all types of cyberattacks.
Our use of joint ventures or partnerships, and our Manager’s outsourcing of certain functions, may present unforeseen obstacles or costs. We have acquired and may in the future acquire interests in certain assets in cooperation with third-party partners or co-investors through jointly-owned acquisition vehicles, joint ventures or other structures.
Our use of joint ventures or partnerships may present unforeseen obstacles or costs. We have acquired and may in the future acquire interests in certain assets in cooperation with third-party partners or co-investors through jointly-owned acquisition vehicles, joint ventures or other structures.
In addition, our ability to renew existing charters or leases or obtain new charters or leases will also depend on prevailing market conditions, and upon expiration of the contracts governing the leasing or charter of the applicable assets, we may be exposed to increased volatility in terms of rates and contract provisions.
Our ability to renew existing leases or obtain new leases will also depend on prevailing market conditions, and upon expiration of the contracts governing the leasing of the applicable assets, we may be exposed to increased volatility in terms of rates and contract provisions.
We and our customers operate in various regions throughout the world.
We and our customers and lessees operate in various regions throughout the world.
Alternatively, if you are such a shareholder and make a valid QEF election for us and each of our PFIC subsidiaries, or if we are a CFC and you own 10% or more of our shares (by vote or value), you will generally not be subject to those taxes, but could recognize taxable income in a taxable year with respect to our shares in excess of any distributions that we make to you in that year, thus giving rise to so called “phantom income” and to a potential out-of-pocket tax liability.
Alternatively, if you are such a shareholder and make a valid QEF election for us and each of our PFIC subsidiaries, or if we are a CFC and you own 10% or more of our shares (by vote or value), you will generally not be subject to those taxes, but could recognize taxable income in a taxable year in which the Company is treated as a PFIC with respect to our shares in excess of any distributions that we make to you in that year, thus giving rise to so called “phantom income” and to a potential out-of-pocket tax liability.
Factors that could lead to such oversupply include, without limitation: • general demand for the type of assets that we purchase; • general macroeconomic conditions, including market prices for commodities that our assets may serve; • geopolitical events, including war, prolonged armed conflict and acts of terrorism; • outbreaks of communicable diseases and natural disasters; • governmental regulation; • interest rates; • the availability of credit; • potential reduced cash flows and financial condition, including potential liquidity restraints; • restructurings and bankruptcies of companies in the industries in which we operate, including our customers; • manufacturer production levels and technological innovation; • manufacturers merging or exiting the industry or ceasing to produce certain asset types; • retirement and obsolescence of the assets that we own; • increases in supply levels of assets in the market due to the sale or merging of operating lessors; and • reintroduction of previously unused or dormant assets into the industries in which we operate.
Factors that could lead to such oversupply include, without limitation: • general demand for the type of assets that we purchase; • general macroeconomic conditions, including market prices for commodities that our assets may serve; • geopolitical events, including war, prolonged armed conflict and acts of terrorism; • outbreaks of communicable diseases and natural disasters; • governmental regulation; • interest rates; • the availability of credit; • potential reduced cash flows and financial condition, including potential liquidity restraints; • restructurings and bankruptcies of companies in the industries in which we operate, including our customers and lessees; • manufacturer production levels and technological innovation; • manufacturers merging or exiting the industry or ceasing to produce certain asset types; • retirement and obsolescence of the assets that we own, maintain, repair or exchange; and • increases in supply levels of assets in the market due to the sale or merging of operating lessors.
Our business is affected by the availability and price of the component parts that we use to maintain our products or to manufacture products. Our ability to manage inventory and meet delivery requirements may be constrained by our suppliers’ ability to adjust delivery of long-lead time products during times of volatile demand.
Our business is affected by the availability and price of the component parts that we use to maintain or repair our engines or for our partners to manufacture products. Our ability to manage inventory and meet delivery requirements may be constrained by our suppliers’ ability to adjust delivery of long-lead time products during times of volatile demand.
We likely will not always be able to compete successfully with our competitors and competitive pressures or other factors may also result in significant price competition, particularly during industry downturns, which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. Certain liens may arise on our assets.
We likely will not always be able to compete successfully with our competitors and competitive pressures or other factors may also result in significant price 12 competition, particularly during industry downturns, which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
See “-The industries in which we operate have experienced periods of oversupply during which lease rates and asset values have declined, particularly during the most recent economic downturn, and any future oversupply could materially adversely affect our results of operations and cash flows.” Any default by a material customer would have a significant impact on our profitability at the time the customer defaulted, which could materially adversely affect our operating results and growth prospects.
See “-The industries in which we operate have experienced periods of oversupply during which lease rates and asset values have declined, particularly during economic downturns, and any future oversupply could materially adversely affect our results of operations and cash flows.” Any default by a material customer or lessee would have a significant impact on our profitability at the time the customer or lessee defaulted, which could materially adversely affect our operating results and growth prospects.
A number of our contractual arrangements-for example, our leasing aircraft engines or offshore energy equipment to third-party operators-require the operator (our customer) to obtain specific governmental or regulatory licenses, consents or approvals. These include consents for certain payments under such arrangements and for the export, import or re-export of the related assets.
A number of our contractual arrangements - for example, our leasing aircraft engines to third-party operators-require the operator (our lessee) to obtain specific governmental or regulatory licenses, consents or approvals. These include consents for certain payments under such arrangements and for the export, import or re-export of the related assets.
Uncertainty and negative trends in general economic conditions in the United States and abroad, including significant tightening of credit markets and commodity price volatility, historically have created difficult operating environments for owners and operators in the transportation industries.
Uncertainty and negative trends in general economic conditions in the United States and abroad, including significant tightening of credit markets and commodity price volatility, historically have created difficult operating environments for owners and operators in the aviation industry.
These and other related factors are generally outside of our control and could lead to persistence of, or increase in, the oversupply of the types of assets that we acquire or decreased utilization of our assets, either of which could materially adversely affect our results of operations and cash flow.
These and other related factors are generally outside of our control and could lead to (i) persistence of, or increase in, the oversupply of the types of assets that we acquire, maintain, repair or exchange or (ii) decreased utilization of our assets, either of which could materially adversely affect our results of operations and cash flow.
In these co-investment situations, our ability to control the management of such assets depends upon the nature and terms of the joint arrangements with such partners and our relative ownership stake in the asset, each of which will be determined by negotiation at the time of the investment and the determination of which is subject to the discretion of our Manager.
In these co-investment situations, our ability to control the management of such assets depends upon the nature and terms of the joint arrangements with such partners and our relative ownership stake in the asset, each of which will be determined by negotiation at the time of the investment.
Holders—PFIC Status and Related Tax Considerations.” Assuming we are a PFIC, distributions made by us to a U.S. person will generally not be eligible for taxation at reduced tax rates generally applicable to “qualified dividends” paid by certain U.S. corporations and “qualified foreign corporations” to individuals.
Assuming we are a PFIC, distributions made by us to a U.S. person will generally not be eligible for taxation at reduced tax rates generally applicable to “qualified dividends” paid by certain U.S. corporations and “qualified foreign corporations” to individuals.
If the market demand for a particular asset declines, it is redesigned or replaced by its manufacturer or it experiences design or technical problems, the value and rates relating to such asset may decline, and we may be unable to lease such asset on favorable terms, if at all.
If the market demand for such engines and related parts declines, it is redesigned or replaced by its manufacturer or it experiences design or technical problems, the value and rates relating to such asset may decline, and we may be unable to lease or sell such engines or related parts on favorable terms, if at all.
The Bermuda CIT will be effective for tax years beginning on or after January 1, 2025 (see footnote 11 to our consolidated financial statements entitled “Income Taxes” included elsewhere in this Annual Report).
The Bermuda CIT is effective for tax years beginning on or after January 1, 2025 (see footnote 12 to our consolidated financial statements entitled “Income Taxes” included elsewhere in this Annual Report).
In addition, we conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act of 1940 (the “Investment Company Act”). As such, certain forms of financing such as finance leases may not be available to us.
In addition, we conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act or as an investment adviser under the Investment Advisers Act. As such, certain forms of financing such as finance leases may not be available to us.
We may be exposed to unforeseen maintenance costs for our assets associated with a lessee’s or charterer’s failure to properly maintain the asset.
Our assets generally require routine maintenance, and we may be exposed to unforeseen maintenance costs. We may be exposed to unforeseen maintenance costs for our assets associated with a lessee’s or charterer’s failure to properly maintain the asset.
Risks Related to Our Business Uncertainty relating to macroeconomic conditions may reduce the demand for our assets, result in non-performance of contracts by our lessees or charterers, limit our ability to obtain additional capital to finance new investments, or have other unforeseen negative effects.
Risks Related to Our Business Uncertainty relating to macroeconomic conditions, including those that affect the commercial aviation industry, may reduce the demand for our assets, result in non-performance of contracts by our lessees or charterers, limit our ability to obtain additional capital to finance new investments, or have other unforeseen negative effects.
Some of our customers operate in highly regulated industries and changes in laws or regulations, including laws with respect to international trade, may adversely affect our ability to lease, charter or sell our assets. Some of our customers operate in highly regulated industries such as aviation and offshore energy.
Our customers and lessees operate in highly regulated industries and changes in laws or regulations, including laws with respect to international trade, may adversely affect our ability to lease or sell our assets. Our customers and lessees operate in highly regulated industries such as aviation.
Any decrease in the value and rates of our assets may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. We operate in highly competitive markets. The business of acquiring aviation assets is highly competitive.
Any decrease in the value and rates of our assets may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. We operate in highly competitive markets. The markets for our products and services are highly competitive.
An increase in market interest rates may have an adverse effect on the market price of our shares. 25 One of the factors that investors may consider in deciding whether to buy or sell our shares is our distribution rate as a percentage of our share price relative to market interest rates.
One of the factors that investors may consider in deciding whether to buy or sell our shares is our distribution rate as a percentage of our share price relative to market interest rates.
Any of these risks may adversely affect our ability to lease, charter or sell our assets on favorable terms, if at all, which could materially adversely affect our operating results and growth prospects. The inability to obtain certain components from suppliers could harm our business.
Any of these risks may adversely affect our ability to lease or sell our aircraft, engines and related parts and conduct maintenance, repair and exchanges on favorable terms, if at all, which could materially adversely affect our operating results and growth prospects. The inability to obtain certain components from suppliers could harm our business.
Because we and our Manager do not directly control these third parties, there can be no assurance that the services they provide will be delivered at a level commensurate with our expectations, or at all.
These functions may include billing, collections, recovery and asset monitoring. Because we do not directly control these third parties, there can be no assurance that the services they provide will be delivered at a level commensurate with our expectations, or at all.
Market competition for opportunities includes traditional transportation companies, commercial and investment banks, as well as a growing number of non-traditional participants, such as hedge funds, private equity funds and other private investors, including Fortress-related entities.
Market competition for opportunities to acquire aviation assets includes traditional transportation companies, commercial and investment banks, as well as a growing number of non-traditional participants, such as hedge funds, private equity funds and other private investors.
We have in the past been exposed to increased credit risk from our customers and third parties who have obligations to us, which resulted in non-performance of contracts by our lessees and adversely impacted our business, financial condition, results of operations and cash flows. We cannot assure you that similar loss events may not occur in the future.
We have in the past been exposed to increased credit risk from our customers and lessees and third parties who have obligations to us, which resulted in non-performance of contracts by our customers and lessees and adversely impacted our business, financial condition, results of operations and cash flows.
We have initially reserved 30,000,000 ordinary shares for issuance under the Incentive Plan. As of December 31, 2023, rights relating to 616,177 of our ordinary shares were outstanding under the Incentive Plan.
We initially reserved 30,000,000 ordinary shares for issuance under the Incentive Plan. As of December 31, 2024, rights relating to 112,343 of our ordinary shares were outstanding under the Incentive Plan.
We acquire a high concentration of a particular type of asset, or concentrate our investments in a particular sector, and our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.
We acquire a high concentration of CFM-56 and V2500 engines and related parts and our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.
We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness. Our ability to make payments on our indebtedness as required depends on our ability to generate cash flow in the future.
We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness. As of December 31, 2024, we had $3.4 billion of indebtedness outstanding. Our ability to make payments on our indebtedness depends on our ability to generate cash flow in the future.
In addition, the trading volume in our ordinary and preferred shares may fluctuate and cause significant price variations to occur. If the market price of our ordinary or preferred shares declines significantly, you may be unable to resell your shares at or above your purchase price, if at all.
If the market price of our ordinary or preferred shares declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. The market price of our ordinary and preferred shares may fluctuate or decline significantly in the future.
Such arrangements present risks not present with wholly-owned assets, such as the possibility that a co-investor becomes bankrupt, develops business interests or goals that conflict with our interests and goals in respect of the assets, all of which could materially adversely affect our business, prospects, financial condition, results of operations and cash flows.
Such arrangements present risks not present with wholly-owned assets, such as the possibility that a co-investor becomes bankrupt, develops business interests or goals that conflict with our interests and goals in respect of the assets, all of which could materially adversely affect our business, prospects, financial condition, results of operations and cash flows. 13 In addition, we expect to utilize third-party contractors to perform services and functions related to the operation and leasing of our assets.
Instability in geographies where we have assets or where we derive revenue could have a material adverse effect on our business, customers, operations and financial results. Economic, civil, military and political uncertainty exists and may increase in regions where we operate and derive our revenue.
We cannot assure you that similar loss events may not occur in the future. Instability in geographies where we have assets or where we derive revenue could have a material adverse effect on our business, customers, lessees, operations and financial results. Economic, civil, military and political uncertainty exists and may increase in regions where we operate and derive our revenue.
The return we are able to earn on our assets and funds available for distribution to our shareholders may be significantly reduced due to changes in market conditions, which may cause the cost of our financing to increase relative to the income that can be derived from our assets.
The return we are able to earn on our assets and funds available for distribution to our shareholders may be significantly reduced due to changes in market conditions, which may cause the cost of our financing to increase relative to the income that can be derived from our assets. 25 While we currently intend to pay regular quarterly dividends to our shareholders, we may change our dividend policy at any time.
The failure of any such third-party contractors to perform in accordance with our expectations could materially adversely affect our business, prospects, financial condition, results of operations and cash flows. We are subject to the risks and costs of obsolescence of our assets.
The failure of any such third-party contractors to perform in accordance with our expectations could materially adversely affect our business, prospects, financial condition, results of operations and cash flows. Our Strategic Capital Initiative involves certain risks which could adversely affect our business, prospects, financial condition, results of operations and cash flows.
If any material authorization or approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.
Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. If any material authorization or approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.
If we acquire a high concentration of a particular asset, or concentrate our investments in a particular sector, and our business and financial results could be adversely affected by sector-specific or asset-specific factors.
If we acquire a high concentration of CFM-56 and V2500 engines and related parts and our business and financial results could be adversely affected by sector-specific or asset-specific factors.
The issuance of our ordinary shares in connection with property, portfolio or business acquisitions or the exercise of outstanding options or otherwise could also have an adverse effect on the market price of our ordinary shares. 26 The incurrence or issuance of debt, which ranks senior to our ordinary shares upon our liquidation, and future issuances of equity or equity-related securities, which would dilute the holdings of our existing ordinary shareholders and may be senior to our ordinary shares for the purposes of making distributions, periodically or upon liquidation, may negatively affect the market price of our ordinary shares.
The incurrence or issuance of debt, which ranks senior to our ordinary shares upon our liquidation, and future issuances of equity or equity-related securities, which would dilute the holdings of our existing ordinary shareholders and may be senior to our ordinary shares for the purposes of making distributions, periodically or upon liquidation, may negatively affect the market price of our ordinary shares.
If such proposals are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition and results of operations.
If such proposals are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition and results of operations. The retirement or prolonged grounding of commercial aircraft could reduce our revenues and the value of any related inventory. We sell aircraft components and replacement parts.
These conditions have resulted in significant contraction, deleveraging and reduced liquidity in the credit markets. A number of governments have implemented, or are considering implementing, a broad variety of governmental actions or new regulations for the financial markets.
A number of governments have implemented, or are considering implementing, a broad variety of governmental actions or new regulations for the financial markets.
In addition, if our acquisitions in other sectors produce insufficient revenues, or produce investment losses, or if we are unable to efficiently manage our expanded operations, our results of operations will be adversely affected, and our reputation and business may be harmed.
In addition, if our acquisitions in other sectors produce insufficient revenues, or produce investment losses, or if we are unable to efficiently manage our expanded operations, our results of operations will be adversely affected, and our reputation and business may be harmed. 17 Implementing new or expanded platforms, products and services and keeping pace with technological or process developments in our industries may require significant capital and operational risk.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo help identify and assess risks, we and our Manager engage third-party advisors, leveraging standards such as the National Institute of Standards and Technology security framework (“NIST”). The results of these assessments inform the development of cybersecurity controls and risk mitigation strategies, which are then implemented throughout the Company.
Biggest changeThe Former Manager’s Chief Technology Officer and Chief Information Security Officer have extensive knowledge and skills, and collectively bring decades of experience in the cybersecurity industry. To help identify and assess risks, we and our Former Manager engage third-party advisors, leveraging standards such as the National Institute of Standards and Technology security framework (“NIST”).
Refer to the risk factor captioned “A cyberattack that bypasses our information technology (“IT”), security systems or the IT security systems of our third-party providers, causing an IT security breach, may lead to a disruption of our IT systems and the loss of business information which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.” in Part I, Item 1A.
Refer to the risk factor captioned “A cyberattack that bypasses our information technology (“IT”), security systems or the IT security systems of our third-party providers, causing an IT security breach, may lead to a disruption of our IT systems and 26 the loss of business information which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.” in Part I, Item 1A.
Item 1C. Cybersecurity Risk Management and Strategy The Company’s cybersecurity is overseen by the Chief Executive Officer, who receives reports directly from other officers and individuals who perform services for the Company, including, but not limited to, the Manager’s Information Security Steering Committee (“ISSC”), employing a risk-based methodology designed to safeguard the security, confidentiality, integrity, and availability of its information.
Cybersecurity Risk Management and Strategy The Company’s cybersecurity is overseen by the Chief Executive Officer, who receives reports directly from other officers and individuals who perform services for the Company, including, but not limited to, the Former Manager’s Information Security Steering Committee (“ISSC”), employing a risk-based methodology designed to safeguard the security, confidentiality, integrity, and availability of its information.
The Manager’s Chief Financial Officer and General Counsel, along with the Chief Operating Officer, Chief Human Resources Officer, Chief Compliance Officer, Chief Technology Officer, Chief Information Security Officer and Chief of Intelligence collaborate with the Company’s Chief Financial Officer to formulate, implement, and enforce these policies.
The Former Manager’s Chief Financial Officer and General Counsel, along with the Chief Operating Officer, Chief Human Resources Officer, Chief Compliance Officer, Chief Technology Officer, Chief Information Security Officer and Chief of Intelligence collaborate with officers and individuals at the Company to formulate, implement, and enforce these policies.
We also have risk management processes to oversee and help identify risks from cybersecurity threats associated with our use of third-party providers. To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and we believe are not reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.
To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and we believe are not reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.
We have taken proactive measures intended to minimize the likelihood of successful cyberattacks, including the establishment of incident response procedures designed to address potential cyber threats that may arise. These response procedures are structured with the aim to identify, analyze, contain, and remediate any cyber incidents that occur.
The results of these assessments inform the development of cybersecurity controls and risk mitigation strategies, which are then implemented throughout the Company. We have taken proactive measures intended to minimize the likelihood of successful cyberattacks, including the establishment of incident response procedures designed to address potential cyber threats that may arise.
Added
These response procedures are structured with the aim to identify, analyze, contain, and remediate any cyber incidents that occur. We also have risk management processes to oversee and help identify risks from cybersecurity threats associated with our use of third-party providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, our aviation leasing business and offshore energy business lease office space in New York, Florida, Wales and Singapore, respectively, and we own and/or lease maintenance facilities in Florida and Canada for our aerospace products business. We believe that our office facilities and properties are suitable and adequate for our business as it is contemplated to be conducted.
Biggest changeItem 2. Properties We lease space for our offices in New York, Florida, Dubai, Ireland, Singapore and Wales, respectively, and we own and/or lease maintenance facilities in Florida and Canada for our Aerospace Products business. We believe that our office facilities and properties are suitable and adequate for our business as it is contemplated to be conducted.
Removed
Item 2. Properties An affiliate of our Manager leases principal executive offices at 1345 Avenue of the Americas, New York, NY 10105. We also lease office space from an affiliate of our Manager in Ireland and Dubai.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeGiven the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material adverse effect on our financial results. Item 4. Mine Safety Disclosures Not applicable. 28 PART II
Biggest changeGiven the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material adverse effect on our financial results. Item 4. Mine Safety Disclosures Not applicable. 27 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, the Incentive Plan provides for the issuance of up to 29.8 million shares. 29 Performance Graph The following graph compares the cumulative total return for our ordinary shares (share price change plus reinvested dividends) with the comparable return of three indices: S&P Mid Cap 400, Russell 2000, and Dow Jones US Transportation Services.
Biggest changeAs of December 31, 2024, the Incentive Plan provides for the issuance of up to 28.3 million shares. 28 Performance Graph The following graph compares the cumulative total return for our ordinary shares (share price change plus reinvested dividends) with the comparable return of the following indices: S&P Mid Cap 400, Russell 2000 and Dow Jones US Aerospace.
The graph assumes an investment of $100 in our ordinary shares and in each of the indices on December 31, 2018, and that all dividends were reinvested. The past performance of our shares is not an indication of future performance.
The graph assumes an investment of $100 in our ordinary shares and in each of the indices on December 31, 2019, and that all dividends were reinvested. The past performance of our shares is not an indication of future performance.
On November 10, 2022, in connection with the Merger, the Incentive Plan was assumed by FTAI Aviation Ltd. and renamed the FTAI Aviation Ltd.
On November 10, 2022, in connection with the Merger, the Incentive Plan was assumed by FTAI Aviation L td. and renamed the FTAI Aviation Ltd.
COMPARISON OF CUMULATIVE TOTAL RETURN* Among FTAI Aviation Ltd., the S&P Midcap 400 Index, the Russell 2000 Index and the Dow Jones US Transportation Services Index *$100 each invested on December 31, 2018 in stock and index, including reinvestment of dividends. Fiscal year ending December 31.
COMPARISON OF CUMULATIVE TOTAL RETURN* Among FTAI Aviation Ltd., the S&P Midcap 400 Index, the Russell 2000 Index and the Dow Jones US Aerospace *$100 each invested on December 31, 2019 in stock and index, including reinvestment of dividends. Fiscal year ending December 31.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our ordinary shares are listed on The Nasdaq Global Select Market under the ticker symbol “FTAI”. As of February 22, 2024, there were approximately 14 record holders of our ordinary shares.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our ordinary shares are listed on The Nasdaq Global Select Market under the ticker symbol “FTAI”. As of February 26, 2025, there were approximately 6 record holders of our ordinary shares.
On February 22, 2024, our Board of Directors declared a cash dividend on our ordinary shares of $0.30 per share for the quarter ended December 31, 2023, payable on March 20, 2024 to the holders of record on March 8, 2024.
On February 26, 2025, our Board of Directors declared a cash dividend on our ordinary shares of $0.30 per share for the quarter ended December 31, 2024, payable on March 24, 2025 to the holders of record on March 14, 2025.
Removed
(in whole dollars) December 31, Index 2018 2019 2020 2021 2022 2023 FTAI Aviation Ltd. $ 100.00 $ 149.92 $ 204.40 $ 266.34 $ 198.57 $ 559.43 S&P Midcap 400 100.00 126.20 143.44 178.95 155.58 181.15 Russell 2000 100.00 125.52 150.58 172.90 137.56 160.85 Dow Jones US Transportation Services 100.00 135.60 162.47 243.23 148.16 194.36 30 Item 6. [Reserved]
Added
We replaced the Dow Jones US Transportation Services Index with the Dow Jones US Aerospace Index for purposes of the stock performance graph, as we believe this index is a more relevant benchmark to measure our performance and the Dow Jones US Transportation index was discontinued.
Added
(in whole dollars) December 31, Index 2019 2020 2021 2022 2023 2024 FTAI Aviation Ltd. $ 100.00 $ 136.34 $ 177.66 $ 132.45 $ 373.16 $ 1174.37 S&P Midcap 400 100.00 113.66 141.80 123.28 143.54 163.54 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 Dow Jones US Aerospace 100.00 81.90 88.84 94.58 110.18 127.99 29 Item 6. [Reserved]

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeConsolidated Financial Statements of FTAI Aviation Ltd.: 50 Report of Independent Registered Public Accounting Firm 51 Consolidated Balance Sheets as of December 31, 2023 and 2022 53 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 54 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021 55 Consolidated Statement of Changes in Equity for the years ended December 31, 2023, 2022 and 2021 56 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 57 Notes to Consolidated Financial Statements 59 Note 1: Organization 59 Note 2: Summary of Significant Accounting Policies 59 Note 3: Discontinued Operations 64 Note 4: Acquisition of QuickTurn 67 Note 5: Leasing Equipment, net 69 Note 6: Investments 69 Note 7: Intangible Assets and Liabilities, net 71 Note 8: Debt, net 72 Note 9: Fair Value Measurements 73 Note 10: Equity-Based Compensation 80 Note 11: Income Taxes 76 Note 12: Management Agreement and Affiliate Transactions 78 Note 1 3 : Segment Information 80 Note 1 4 : Earnings per Share and Equity 87 Note 1 5 : Commitments and Contingencies 88 Note 1 6 : Subsequent Events 88
Biggest changeConsolidated Financial Statements of FTAI Aviation Ltd.: 52 Report of Independent Registered Public Accounting Firm 53 Consolidated Balance Sheets as of December 31, 2024 and 2023 55 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 56 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022 57 Consolidated Statement of Changes in Equity for the years ended December 31, 2024, 2023 and 2022 58 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 59 Notes to Consolidated Financial Statements 61 Note 1: Organization 61 Note 2: Summary of Significant Accounting Policies 61 Note 3: Discontinued Operations 68 Note 4: Acquisition of Lockheed Martin Commercial Engine Solutions 70 Note 5: Acquisition of QuickTurn 72 Note 6: Leasing Equipment, net 73 Note 7: Investments 74 Note 8: Intangible Assets and Liabilities, net 75 Note 9: Debt, net 76 Note 10: Fair Value Measurements 77 Note 11: Equity-Based Compensation 80 Note 12: Income Taxes 81 Note 13: Affiliate Transactions 83 Note 14: Segment Information 85 Note 15: Earnings per Share and Equity 91 Note 16: Commitments and Contingencies 92 Note 17: Restructuring Charges 92 Note 18: Subsequent Events 92
Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49 Item 8.
Item 6. [Reserved] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8.

Item 7. Management's Discussion & Analysis

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

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Biggest changeHistorical Cash Flow The following table presents our historical cash flow from both continuing and discontinued operations: Year Ended December 31, (in thousands) 2023 2022 2021 Cash flow data: Net cash used in operating activities $ 128,982 $ (20,657) $ (22,044) Net cash used in investing activities (373,349) (411,253) (1,286,958) Net cash provided by financing activities 282,208 44,914 1,587,645 Comparison of the years ended December 31, 2023 and 2022 Net cash used in operating activities decreased $149.6 million, which primarily reflects (i) a decrease in our Net loss of $455.8 million and (ii) Changes in working capital of $52.8 million, partially offset by certain adjustments to reconcile net income to cash used in operating activities including decreases in (i) Asset impairment of $135.1 million, (ii) Equity in losses of unconsolidated entities of $45.4 million, (iii) Provision for credit losses of $41.4 million, (iv) Depreciation and amortization of $23.4 million, (v) Loss on extinguishment of debt of $19.9 million, and (vi) an increase in gain on sale of assets of $19.1 million.
Biggest changeHistorical Cash Flow The following table presents our historical cash flow from both continuing and discontinued operations: Year Ended December 31, (in thousands) 2024 2023 2022 Cash flow data: Net cash used in operating activities $ (187,956) $ 128,982 $ (20,657) Net cash used in investing activities (469,498) (373,349) (411,253) Net cash provided by financing activities 681,814 282,208 44,914 Comparison of the years ended December 31, 2024 and 2023 Net cash used in operating activities increased $316.9 million, which primarily reflects (i) a decrease in our Net income of $235.1 million and increases in (ii) Changes in working capital of $178.5 million and (iii) Gain on sale of assets of $217.2 million, partially offset by certain adjustments to reconcile net income to cash used in operating activities including increases in (iv) Non-cash termination fee to affiliate (issuance of ordinary shares) of $150.0 million, (v) Deferred income taxes of $61.7 million, (vi) Depreciation and amortization of $48.2 million, a decrease in (vii) Security deposits and maintenance claims included in earnings of $23.8 million, an increase in (viii) Loss on extinguishment of debt of $17.1 million and a decrease in (ix) Other of $6.4 million Net cash used in investing activities increased $96.1 million primarily due to increases in (i) Acquisition of leasing equipment of $397.6 million, (ii) Deposits for leasing equipment of $134.4 million, (iii) Acquisition of business, net of cash acquired of $118.0 million and (iv) Investments in financing receivables of $66.9 million, partially offset by higher (v) Proceeds from sale of assets of $491.4 million and (vi) Proceeds (refunds) from deposits on sale of leasing equipment of $78.4 million, and decreases in (vii) Acquisition of lease intangibles of $24.1 million, (viii) Investment in unconsolidated entities of $19.5 million and (ix) Investment in promissory notes of $11.5 million. 48 Net cash provided by financing activities increased $399.6 million primarily due to increases in (i) Proceeds from debt of $1,630.2 million and (ii) Receipt of maintenance deposits under operating lease agreements of $19.0 million, partially offset by increases in (iii) Repayment of debt of $1,067.3 million and (iv) Redemption of preferred shares of $105.4 million, a decrease in (v) Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs of $61.7 million, and increases in (vi) Release of maintenance deposits under operating lease agreements of $6.9 million and (vii) Payment of deferred financing costs of $5.2 million.
(Benefit from) provision for income taxes The benefit from income taxes increased $38.7 million primarily due to the Company establishing a deferred tax asset of $46.6 million in connection with a tax law change in Bermuda , which was recorded as a benefit from income taxes during the fourth quarter of 2023.
Provision for (benefit from) income taxes The benefit from income taxes increased $38.7 million primarily due to the Company establishing a deferred tax asset of $46.6 million in connection with a tax law change in Bermuda , which was recorded as a benefit from income taxes during the fourth quarter of 2023.
Net loss from discontinued operations Net loss from discontinued operations decreased $101.4 million for the year ended December 31, 2023, compared to the prior year as these businesses have spun off and there is no corresponding activity in the current period. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $169.2 million primarily due to the changes noted above.
Net loss from discontinued operations Net loss from discontinued operations decreased by $101.4 million for the year ended December 31, 2023, compared to the prior year as these businesses have spun off and there is no corresponding activity in the current period. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $169.2 million, primarily due to the changes noted above.
We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us. The insured value of the aircraft and engines that remain in Russia is approximately $210.7 million. We intend to pursue all our claims under these policies.
We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us. The insured value of the aircraft and engines that remain in Russia is $210.7 million. We intend to pursue all of our claims under these policies.
The fair value of the lease may include a lease premium or discount, which is recorded as a favorable or unfavorable lease intangible. Asset sales revenue —Asset sales revenue primarily consists of the transaction price related to the sale of aircraft and aircraft engines from our Aviation Leasing segment.
The fair value of the lease may include a lease premium or discount, which is recorded as a favorable or unfavorable lease intangible. 49 Asset sales revenue —Asset sales revenue primarily consists of the transaction price related to the sale of aircraft and aircraft engines from our Aviation Leasing segment.
FTAI retained the aviation business and certain other assets, and FTAI’s remaining outstanding corporate indebtedness. In connection with the spin-off, the Company and the Manager assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Manager executed an amended and restated agreement.
FTAI retained the aviation business and certain other assets, and FTAI’s remaining outstanding corporate indebtedness. In connection with the spin-off, the Company and the Former Manager assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Former Manager executed an amended and restated agreement.
Prior to the Merger described below, our Manager remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off.
Prior to the Merger described below, our Former Manager remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off.
As a result, we recognized an impairment charge totaling $120.0 million, net of maintenance deposits for the year ended December 31, 2022, to write-off the entire carrying value of leasing equipment assets that we did not expect to recover from Ukraine and Russia. As of December 31, 2023, eight aircraft and seventeen engines were still located in Russia.
As a result, we recognized an impairment charge totaling $120.0 million, net of maintenance deposits for the year ended December 31, 2022, to write-off the entire carrying value of leasing equipment assets that we did not expect to recover from Ukraine and Russia. As of December 31, 2024 , eight aircraft and seventeen engines were still located in Russia.
Sales transactions of aircraft and engines prior to the third quarter of 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain (loss) on sale of assets, net on the Consolidated Statement of Operations, as we were previously only occasionally selling these assets.
Sales transactions of aircraft and engines prior to the third quarter of 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain (loss) on sale of assets, net on the Consolidated Statements of Operations, as we were previously only occasionally selling these assets.
Following the Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and 31 Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), pursuant to which Master GP is entitled to incentive payments on substantially similar terms as the previous arrangements.
Following the Former Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), pursuant to which Master GP is entitled to incentive payments on substantially similar terms as the previous arrangements.
Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received.
Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the lessee is placed on non-accrual status and revenue is recognized when cash payments are received.
In December 2023, we acquired the remaining interest in Quick Turn Engine Center LLC or “QuickTurn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine. Refer to Note 4 “Acquisition of QuickTurn”, for additional information.
In December 2023, we acquired the remaining interest in Quick Turn Engine Center LLC or “QuickTurn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine. Refer to Note 5 “Acquisition of QuickTurn”, for additional information.
Revenues Presentation of assets sales During the third quarter of 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities.
Revenues Presentation of aircraft and engine sales During the third quarter of 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities.
As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statement of Operations beginning in the third quarter of 2022 and is accounted for in accordance with ASC 606.
As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statements of Operations beginning in the third quarter of 2022 and is accounted for in accordance with ASC 606.
The Company and certain of its subsidiaries executed a new management agreement with the Manager. The new management agreement has an initial term of six years. The Manager is entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Manager, which were assigned to FTAI Infrastructure.
The Company and certain of its subsidiaries executed a new management agreement with the Former Manager. The new management agreement has an initial term of six years. The Former Manager was entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Former Manager, which were assigned to FTAI Infrastructure.
(Benefit from) provision for income taxes The benefit from income taxes increase d $65.1 million primarily due to the Company establishing a deferred tax asset of $72.2 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023.
Provision for (benefit from) income taxes The benefit from income taxes increased $65.1 million primarily due to the Company establishing a deferred tax asset of $72.2 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023.
A discussion of our cash flows for 2022 compared to 2021 is included in our Annual Report on Form 10-K for the year ended December 31, 2022, under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. Overview We own, lease and sell aviation equipment.
A discussion of our cash flows for 2024 compared to 2023 is included in our Annual Report on Form 10-K for the year ended December 31, 2024, under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. Overview We own, lease and sell aviation equipment.
Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 16 months.
Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 22 months.
(2) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net loss of $1,606, $369 and $1,403, (ii) depreciation and amortization expense of $1,488, $409 and $200 and (iii) acquisition and transaction expense of $428, $0 and $0, respectively.
(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $2,200, $1,606 and $369, (ii) depreciation and amortization expense of $308, $1,488 and $409 and (iii) acquisition and transaction expense of $0, $428 and $0, respectively.
Our aviation equipment was approximately 77% utilized during the three months ended December 31, 2023, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.
Our aviation equipment was approximately 76% utilized during the three months ended December 31, 2024, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.
As of December 31, 2023 , 76 of our commercial aircraft and 175 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.
As of December 31, 2024, 94 of our commercial aircraft and 181 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.
See above discussion regarding presentation of asset sales. (Benefit from) provision for income taxes The benefit from income taxes increase d $27.4 million primarily due to the Company establishing a deferred tax asset of $25.6 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023.
Provision for (benefit from) income taxes The benefit from income taxes increase d $27.4 million primarily due to the Company establishing a deferred tax asset of $25.6 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023.
See Note 8 to the consolidated financial statements for additional information about our debt obligations. Lease Obligations — As of December 31, 2023, we had outstanding operating and finance lease obligations of $2.0 million, of which, $0.9 million is due in the next twelve months.
See Note 9 to the consolidated financial statements for additional information about our debt obligations. Lease Obligations — As of December 31, 2024, we had outstanding operating and finance lease obligations of $37.5 million, of which, $2.9 million is due in the next twelve months.
(2) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net (loss) income of $(148), $740 and $0 and (ii) depreciation and amortization of $252, $185 and $0, respectively.
(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net (loss) income of $(207), $(148) and $740 and (ii) depreciation and amortization of $84, $252 and $185, respectively.
Revenue is recognized when a performance obligation is satisfied by transferring control over an asset to a customer. Revenue is recorded with corresponding costs of sales, presented on a gross basis in the Consolidated Statements of Operations.
Revenue is recognized when a performance obligation is satisfied by transferring control over an asset to a customer. Revenue is recorded with corresponding costs of sales, presented on a gross basis in the Consolidated Statements of Operations. See Note 14 for additional information.
Other Cash Requirements — In addition to our contractual obligations, we pay quarterly cash dividends on our ordinary shares and preferred shares, which are subject to change at the discretion of our Board of Directors. During 2023, we declared cash dividends of $119.8 million and $31.8 million o n our ordinary shares and preferred shares, respectively.
Other Cash Requirements — In addition to our contractual obligations, we pay quarterly cash dividends on our ordinary shares and preferred shares, which are subject to change at the discretion of our Board of Directors. During 2024, we declared cash dividends of $121.6 million and $32.8 million o n our ordinary shares and preferred shares, respectively.
Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities. 45 Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our aviation assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales. • Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $163.0 million, $29.4 million and $16.9 million during the years ended December 31, 2023, 2022, and 2021, respectively. • During the year ended December 31, 2023, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $455.0 million and (ii) Senior Notes Due 2030 of $500.0 million.
Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities. 47 Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our aviation assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales. • Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $(136.5) million, $163.0 million and $29.4 million during the years ended December 31, 2024, 2023, and 2022, respectively. • During the year ended December 31, 2024, additional borrowings were obtained in connection with the (i) Senior Notes due 2033 of $500.0 million, (ii) Senior Notes due 2032 of $800.0 million, (iii) Senior Notes due 2031 of $700.0 million and (iv) Revolving Credit Facility of $745.0 million.
We also develop and manufacture through a joint venture, and repair and sell, through our maintenance facility and exclusivity arrangements, aftermarket components for aircraft engines. Additionally, we own and lease offshore energy equipment. We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation.
We also develop and manufacture through a joint venture, and repair and sell, through our maintenance facilities and exclusivity arrangements, aftermarket components for aircraft engines. We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation.
We made total principal repayments of $605.0 million relating to the Revolving Credit Facility. During the year ended December 31, 2022 , additional borrowings were obtained in connection with the (i) 2021 Bridge Loans of $239.5 million (ii) Revolving Credit Facility of $565.0 million and (iii) EB-5 Loan Agreement of $9.5 million.
During the year ended December 31, 2022, additional borrowings were obtained in connection with the (i) 2021 Bridge Loans of $239.5 million (ii) Revolving Credit Facility of $565.0 million and (iii) EB-5 Loan Agreement of $9.5 million.
The extent of the impact of Russia’s invasion of Ukraine and the related sanctions on our operational and financial performance, including the ability for us to recover our leasing equipment in the region, will depend on future developments, including the duration of the conflict, sanctions and restrictions imposed by Russian and international governments, all of which remain uncertain.
The extent of the impact of Russia’s invasion of Ukraine and the related sanctions on our results, including the ability for us to recover our leasing equipment in the region, will depend on future developments, including the duration of the conflict, sanctions and restrictions imposed by Russian and international governments, all of which remain uncertain. 30 Spin-Off of FTAI Infrastructure Inc.
Interest expense decreased $7.6 million, which reflects a decrease in the average outstanding debt of approximately $183.8 million primarily due to decreases in (i) the 2021 Bridge Loans of $178.3 million and (ii) the Senior Notes due 2025 of $116.7 million, which were partially redeemed in August 2022, partially offset by increases in (iii) the Revolving Credit Facility of $28.7 million and (iv) the Senior Notes due 2030 of $82.8 million, which were issued in November 2023.
Other income (expense) Total other expense decreased by $28.4 million, due to the following: • Loss on extinguishment of debt decreased by $19.9 million driven by the 2022 pay-down of the 2021 Bridge Loans and the partial redemption of the Senior Notes due 2025. • Interest expense decreased $7.6 million, which reflects a decrease in the average outstanding debt of approximately $183.8 million primarily due to decreases in (i) the 2021 Bridge Loans of $178.3 million and (ii) the Senior Notes due 2025 of $116.7 million, which were partially redeemed in August 2022, partially offset by increases in (iii) the Revolving Credit Facility of $28.7 million and (iv) the Senior Notes due 2030 of $82.8 million, which were issued in November 2023.
Contractual Obligations Our material cash requirements include the following contractual and other obligations: Debt Obligations — As of December 31, 2023, we had outstanding principal and interest payment obligations of $2.6 billion and $728.6 million through the maturity date of the debt, respectively, of which only interest payments of $177.4 million are due in the next twelve months.
Contractual Obligations Our material cash requirements include the following contractual and other obligations: Debt Obligations — As of December 31, 2024, we had outstanding principal and interest payment obligations of $3.5 billion and $1.4 billion through the maturity date of the debt, respectively, of which only interest payments of $229.8 million are due in the next twelve months.
Other income (expense) Total other income decreased $13.2 million which primarily reflects a decrease of $18.2 million in Gain on sale of assets, net, partially offset by an increase of $5.3 million in gain on consolidation of investment in connection with the QuickTurn acquisition, and an increase of $0.3 million in our proportionate share of unconsolidated entities’ net loss.
Other income (expense) Total other income increased $5.0 million, which primarily reflects an increase of $5.3 million in gain on consolidation of investment in connection with the QuickTurn acquisition, offset by an increase of $0.3 million in our proportionate share of unconsolidated entities’ net loss.
Property, Plant and Equipment, Leasing Equipment and Depreciation —Property, plant and equipment and leasing equipment are stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over estimated useful lives, to estimated residual values which are summarized as follows: Asset Range of Estimated Useful Lives Residual Value Estimates Aircraft 25 years from date of manufacture Generally not to exceed 15% of manufacturer’s list price when new Aircraft engines 2 - 6 years, based on maintenance adjusted service life Sum of engine core salvage value plus the estimated fair value of life limited parts Aviation tooling and equipment 3 - 6 years from date of purchase Scrap value at end of useful life Offshore energy vessels 25 years from date of manufacture 10% of new build cost Buildings and improvements 40 to 50 years Scrap value at end of useful life Machinery and equipment 6 - 23 years Scrap value at end of useful life Furniture and fixtures 3 - 6 years from date of purchase None Computer hardware and software 2 - 5 years from date of purchase None Land N/A N/A Construction in progress N/A N/A Other 5 - 7 years N/A Impairment of Long-Lived Assets —We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable.
Leasing Equipment and Depreciation —Leasing equipment is stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over estimated useful lives, to estimated residual values which are summarized as follows: Asset Range of Estimated Useful Lives Residual Value Estimates Aircraft 25 years from date of manufacture Generally not to exceed 15% of manufacturer’s list price when new Aircraft engines 2 - 6 years, based on maintenance adjusted service life Sum of engine core salvage value plus the estimated fair value of life limited parts Impairment of Long-Lived Assets —We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable.
Aerospace Products Segment The Aerospace Products segment develops and manufactures through a joint venture , repairs and sells, through our maintenance facility and exclusivity arrangements, aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines.
Aerospace Products Segment The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines .
Indicators may include, but are not limited to, a significant lease restructuring or early lease termination; significant traffic decline; a significant change in market conditions; or the introduction of newer technology aircraft, vessels or engines.
Indicators may include, but are not limited to, a significant lease restructuring or early lease termination; significant traffic decline; a significant change in market conditions; or the introduction of newer technology and the length of time an asset is off lease related to leasing equipment or engines.
In the event that an asset does not meet the recoverability test, the carrying value of the asset will be adjusted to fair value resulting in an impairment charge. 48 Management develops the assumptions used in the recoverability analysis based on its knowledge of active contracts, current and future expectations of the global demand for a particular asset and historical experience in the leasing markets, as well as information received from third party industry sources.
Management develops the assumptions used in the recoverability analysis based on its knowledge of active contracts, current and future expectations of the global demand for a particular asset and historical experience in the leasing markets, as well as information received from third party industry sources.
We made total principal repayments of (i) $604.5 million relating to the Revolving Credit Facility, (ii) $340.0 million related to the 2021 Bridge Loans and (iii) $200.0 million related to the Senior Notes due 2025.
We made total principal repayments of (i) $650.0 million related to the Senior Notes due 2025, (ii) $745.0 million relating to the Revolving Credit Facility and (iii) $400.0 million related to the Senior Notes due 2027.
We believe that there is a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities.
We believe that there is a large number of acquisition opportunities in our markets and that our expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities. As of December 31, 2024, we had total consolidated assets of $4.0 billion and total equity of $81.4 million.
The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Aerospace products revenue $ 454,970 $ 178,515 $ 23,301 $ 276,455 $ 155,214 Expenses Cost of sales 280,280 109,481 14,308 170,799 95,173 Operating expenses 20,459 11,967 5,429 8,492 6,538 Acquisition and transaction expenses 1,722 243 — 1,479 243 Depreciation and amortization 661 258 66 403 192 Total expenses 303,122 121,949 19,803 181,173 102,146 Other income (expense) Equity in losses of unconsolidated entities (1,458) (1,109) (1,403) (349) 294 Gain on sale of assets, net — 18,163 20,384 (18,163) (2,221) Other income 5,347 — — 5,347 — Total other income 3,889 17,054 18,981 (13,165) (1,927) Income before income taxes 155,737 73,620 22,479 82,117 51,141 (Benefit from) provision for income taxes (24,440) 2,961 1,135 (27,401) 1,826 Net income 180,177 70,659 21,344 109,518 49,315 Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — Net income attributable to shareholders $ 180,177 $ 70,659 $ 21,344 $ 109,518 $ 49,315 41 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Net income attributable to shareholders $ 180,177 $ 70,659 $ 21,344 $ 109,518 $ 49,315 Add: (Benefit from) provision for income taxes (24,440) 2,961 1,135 (27,401) 1,826 Add: Equity-based compensation expense 225 — — 225 — Add: Acquisition and transaction expenses 1,722 243 — 1,479 243 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 661 258 66 403 192 Add: Interest expense and dividends on preferred shares — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 206 (885) (1,203) 1,091 318 Less: Equity in losses of unconsolidated entities 1,458 1,109 1,403 349 (294) Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 160,009 $ 74,345 $ 22,745 $ 85,664 $ 51,600 __________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net loss of $ 1,458 , $1,109 and $1,403 (ii) depreciation and amortization of $1,236 , $224 and $200 and (iii) acquisition and transaction expense of $428, $0, $0, respectively.
The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Aerospace products revenue $ 1,079,821 $ 454,970 $ 178,515 $ 624,851 $ 276,455 Expenses Cost of sales 673,907 280,280 109,481 393,627 170,799 Operating expenses 23,818 20,459 11,967 3,359 8,492 Acquisition and transaction expenses 4,906 1,722 243 3,184 1,479 Depreciation and amortization 6,630 661 258 5,969 403 Gain on sale of assets, net — — (18,163) — 18,163 Total expenses 709,261 303,122 103,786 406,139 199,336 Other income (expense) Equity in losses of unconsolidated entities (1,993) (1,458) (1,109) (535) (349) Other income — 5,347 — (5,347) 5,347 Total other (expense) income (1,993) 3,889 (1,109) (5,882) 4,998 Income before income taxes 368,567 155,737 73,620 212,830 82,117 Provision for (benefit from) income taxes 22,221 (24,440) 2,961 46,661 (27,401) Net income attributable to shareholders $ 346,346 $ 180,177 $ 70,659 $ 166,169 $ 109,518 41 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Net income attributable to shareholders $ 346,346 $ 180,177 $ 70,659 $ 166,169 $ 109,518 Add: Provision for (benefit from) income taxes 22,221 (24,440) 2,961 46,661 (27,401) Add: Equity-based compensation expense 309 225 — 84 225 Add: Acquisition and transaction expenses 4,906 1,722 243 3,184 1,479 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 6,630 661 258 5,969 403 Add: Interest expense and dividends on preferred shares — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) (1,769) 206 (885) (1,975) 1,091 Less: Equity in losses of unconsolidated entities 1,993 1,458 1,109 535 349 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 380,636 $ 160,009 $ 74,345 $ 220,627 $ 85,664 __________________________________________________ (1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $ 1,993 , $1,458 and $1,109 (ii) depreciation and amortization of $224 , $1,236 and $224 and (iii) acquisition and transaction expense of $0, $428, $0, respectively.
Geographic Information Please refer to Note 13 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers, for the years ended December 31, 2023, 2022 and 2021, as well as a report of our total property, plant and equipment as of December 31, 2023 and 2022.
See “Risks Related to Our Business-Our Strategic Capital Initiative involves certain risks which could adversely affect our business, prospects, financial condition, results of operations and cash flows.” Geographic Information Please refer to Note 14 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers and lessees, for the years ended December 31, 2024, 2023 and 2022, as well as a report of our total property, plant and equipment as of December 31, 2024 and 2023.
See Note 5 to the consolidated financial statements for additional information. • Operating expenses decreased $43.4 million primarily as a re sult of decreases in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, shipping and storage fees and repairs and maintenance expenses, partially offset by an increase in insurance expense. • Cost of sales increased $82.9 million primarily as a result of a n increase in asset sales and the gross presentation of asset sales revenues and related costs of sales as described above. • Depreciation and amortization expense increased $14.1 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool. • Acquisition and transaction expenses increased $5.2 million driven by higher compensation and related costs associated with the acquisition of aviation leasing equipment.
See Note 6 to the consolidated financial statements for additional information. • Operating expenses decreased by $43.4 million, primarily driven by the $41.4 million decrease in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, a $2.5 million decrease in shipping and storage fees and repairs and maintenance expenses, partially offset by a $1.2 million increase in insurance expense. • Cost of sales increased by $82.9 million, primarily due to an overall increase in the number of material sales transactions of commercial aircraft and engines, as well as the gross presentation of asset sales revenues and related costs of sales as described above.
See Note 11 to the consolidated financial statements for additional information. Net income (loss) from continuing operations Net income from continuing operations increased $354.4 million primarily due to the changes noted above.
See Note 12 to the consolidated financial statements for additional information. Net income Net income increased by $109.5 million, primarily due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022 Revenues Total revenues increased $178.7 million driven by an increase in asset sales revenue, maintenance revenue and lease income, partially offset by a decrease in other revenue. • Asset sales revenue increased $119.6 million primarily due to an increase in the sale of commercial aircraft and engines.
Comparison of the years ended December 31, 2023 and 2022 Revenues Total revenues increased by $178.7 million, driven by the following: • Asset sales revenue increas ed by $119.6 million, primarily d ue to an increase in the number of material sales transactions of commercial aircraft and engines.
The absence of cash flows from discontinued operations is not expected to adversely affect our liquidity or our ability to fund capital expenditures or working capital needs.
Cash used in investing activities from discontinued operations were $136.3 million for the year ended December 31, 2022. The absence of cash flows from discontinued operations is not expected to adversely affect our liquidity or our ability to fund capital expenditures or working capital needs.
Operating expenses decreased $22.1 million primarily due to: • an decrease of $43.4 million in the Aviation Leasing segment primarily as a result of decrease in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, shipping and storage fees and repairs and maintenance expenses, partially offset by increases in insurance expenses. • an increase of $12.8 million in the Offshore Energy business which reflects increases in offshore crew expenses, project costs and other operating expenses as our vessels were on-hire longer in 2023 compared to 2022. • an increase of $8.5 million in the Aerospace Products segment primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in shipping and storage fees as operations continued to ramp-up in 2023.
See Note 6 to the consolidated financial statements for additional information. • Operating expenses decreased by $22.1 million, primarily due to the following: • a decrease of $43.4 million in the Aviation Leasing segment primarily as a result of a $41.4 million decrease in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, a $2.5 million decrease in shipping and storage fees and repairs and maintenance expenses, partially offset by a $1.2 million increase in insurance expense. • an increase of $12.8 million in the Offshore Energy business which reflects increases in offshore crew expenses of $2.1 million, project costs of $3.9 million and other operating expenses of $1.3 million for one of our vessels driven by increased cost of operations based on the operating location of the vessel, as well as increased number of days on-hire.
The table below provides additional information on the assets in our Aviation Leasing segment: Aviation Assets Widebody Narrowbody Total Aircraft Assets at January 1, 2023 8 98 106 Purchases — 40 40 Sales (2) (11) (13) Transfers (1) (36) (37) Assets at December 31, 2023 5 91 96 Engines Assets at January 1, 2023 40 184 224 Purchases 7 94 101 Sales (17) (24) (41) Transfers 2 (19) (17) Assets at December 31, 2023 32 235 267 37 The following table presents our results of operations for our Aviation Leasing segment: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Revenues Lease income $ 179,704 $ 159,068 $ 163,733 $ 20,636 $ (4,665) Maintenance revenue 191,347 148,846 128,819 42,501 20,027 Asset sales revenue 303,141 183,535 — 119,606 183,535 Other revenue 7,419 11,499 5,569 (4,080) 5,930 Total revenues 681,611 502,948 298,121 178,663 204,827 Expenses Cost of sales 221,852 138,904 — 82,948 138,904 Operating expenses 37,876 81,232 32,757 (43,356) 48,475 Acquisition and transaction expenses 7,150 1,923 982 5,227 941 Depreciation and amortization 158,354 144,258 139,678 14,096 4,580 Asset impairment 2,121 137,219 10,463 (135,098) 126,756 Total expenses 427,353 503,536 183,880 (76,183) 319,656 Other income (expense) Equity in (losses) earnings of unconsolidated entities (148) 740 — (888) 740 Gain on sale of assets, net — 59,048 28,631 (59,048) 30,417 Other income (expense) 1,300 246 (527) 1,054 773 Total other income 1,152 60,034 28,104 (58,882) 31,930 Income before income taxes 255,410 59,446 142,345 195,964 (82,899) (Benefit from) provision for income taxes (36,193) 2,502 2,073 (38,695) 429 Net income 291,603 56,944 140,272 234,659 (83,328) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — Net income attributable to shareholders $ 291,603 $ 56,944 $ 140,272 $ 234,659 $ (83,328) 38 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Net income attributable to shareholders $ 291,603 $ 56,944 $ 140,272 $ 234,659 $ (83,328) Add: (Benefit from) provision for income taxes (36,193) 2,502 2,073 (38,695) 429 Add: Equity-based compensation expense 337 — — 337 — Add: Acquisition and transaction expenses 7,150 1,923 982 5,227 941 Add: Losses on the modification or extinguishment of debt and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges 2,121 137,219 10,463 (135,098) 126,756 Add: Incentive allocations — — — — — Add: Depreciation and amortization expense (1) 202,118 181,372 167,656 20,746 13,716 Add: Interest expense and dividends on preferred shares — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 104 925 — (821) 925 Less: Equity in losses (earnings) of unconsolidated entities 148 (740) — 888 (740) Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 467,388 $ 380,145 $ 321,446 $ 87,243 $ 58,699 __________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) depreciation expense of $158,354, $144,258 and $139,678, (ii) lease intangible amortization of $15,126, $13,913 and $4,993 and (iii) amortization for lease incentives of $28,638, $23,201 and $22,985, respectively.
The table below provides additional information on the assets in our Aviation Leasing segment, including transfers which involve aircraft breakdowns, engine transfers from leasing equipment to inventory for manufacturing and sales, and engine transfers from inventory to leasing equipment for rebuilding and sales: Aviation Assets Widebody Narrowbody Total Aircraft Assets at January 1, 2024 5 91 96 Purchases — 50 50 Sales — (3) (3) Transfers — (34) (34) Assets at December 31, 2024 5 104 109 Engines Assets at January 1, 2024 32 235 267 Purchases 4 134 138 Sales (13) (1) (14) Transfers — (79) (79) Assets at December 31, 2024 23 289 312 37 The following table presents our results of operations for our Aviation Leasing segment: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Revenues Lease income $ 234,411 $ 179,704 $ 159,068 $ 54,707 $ 20,636 Maintenance revenue 200,809 191,347 148,846 9,462 42,501 Asset sales revenue 192,176 303,141 183,535 (110,965) 119,606 Other revenue 1,041 7,419 11,499 (6,378) (4,080) Total revenues 628,437 681,611 502,948 (53,174) 178,663 Expenses Cost of sales 151,977 221,852 138,904 (69,875) 82,948 Operating expenses 35,495 37,876 81,232 (2,381) (43,356) Acquisition and transaction expenses 9,740 7,150 1,923 2,590 5,227 Depreciation and amortization 201,497 158,354 144,258 43,143 14,096 Asset impairment 962 2,121 137,219 (1,159) (135,098) Gain on sale of assets, net — — (59,048) — 59,048 Total expenses 399,671 427,353 444,488 (27,682) (17,135) Other income (expense) Equity in (losses) earnings of unconsolidated entities (207) (148) 740 (59) (888) Other income 14,669 1,300 246 13,369 1,054 Total other income 14,462 1,152 986 13,310 166 Income before income taxes 243,228 255,410 59,446 (12,182) 195,964 Provision for (benefit from) income taxes 32,979 (36,193) 2,502 69,172 (38,695) Net income attributable to shareholders $ 210,249 $ 291,603 $ 56,944 $ (81,354) $ 234,659 38 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Net income attributable to shareholders $ 210,249 $ 291,603 $ 56,944 $ (81,354) $ 234,659 Add: Provision for (benefit from) income taxes 32,979 (36,193) 2,502 69,172 (38,695) Add: Equity-based compensation expense 584 337 — 247 337 Add: Acquisition and transaction expenses 9,740 7,150 1,923 2,590 5,227 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — — — — — Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges 962 2,121 137,219 (1,159) (135,098) Add: Incentive allocations — — — — — Add: Depreciation and amortization expense (1) 245,464 202,118 181,372 43,346 20,746 Add: Interest expense and dividends on preferred shares — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) (123) 104 925 (227) (821) Less: Equity in losses (earnings) of unconsolidated entities 207 148 (740) 59 888 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 500,062 $ 467,388 $ 380,145 $ 32,674 $ 87,243 __________________________________________________ (1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) depreciation expense of $201,497, $158,354 and $144,258, (ii) lease intangible amortization of $15,597, $15,126 and $13,913 and (iii) amortization for lease incentives of $28,370, $28,638 and $23,201, respectively.
Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA. 32 The following table presents our consolidated results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Revenues Lease income $ 207,936 $ 179,314 $ 173,864 $ 28,622 $ 5,450 Maintenance revenue 191,347 148,846 128,819 42,501 20,027 Asset sales revenue 303,141 183,535 — 119,606 183,535 Aerospace products revenue 454,970 178,515 23,301 276,455 155,214 Other revenue 13,502 18,201 9,599 (4,699) 8,602 Total revenues 1,170,896 708,411 335,583 462,485 372,828 Expenses Cost of sales 502,132 248,385 14,308 253,747 234,077 Operating expenses 110,163 132,264 59,615 (22,101) 72,649 General and administrative 13,700 14,164 13,448 (464) 716 Acquisition and transaction expenses 15,194 13,207 17,911 1,987 (4,704) Management fees and incentive allocation to affiliate 18,037 3,562 684 14,475 2,878 Depreciation and amortization 169,877 152,917 147,740 16,960 5,177 Asset impairment 2,121 137,219 10,463 (135,098) 126,756 Interest expense 161,639 169,194 155,017 (7,555) 14,177 Total expenses 992,863 870,912 419,186 121,951 451,726 Other income (expense) Equity in losses of unconsolidated entities (1,606) (369) (1,403) (1,237) 1,034 Gain on sale of assets, net — 77,211 49,015 (77,211) 28,196 Loss on extinguishment of debt — (19,859) (3,254) 19,859 (16,605) Other income (expense) 7,590 207 (490) 7,383 697 Total other income 5,984 57,190 43,868 (51,206) 13,322 Income (loss) from continuing operations before income taxes 184,017 (105,311) (39,735) 289,328 (65,576) (Benefit from) provision for income taxes (59,800) 5,300 3,126 (65,100) 2,174 Net income (loss) from continuing operations 243,817 (110,611) (42,861) 354,428 (67,750) Net loss from discontinued operations, net of income taxes — (101,416) (87,845) 101,416 (13,571) Net income (loss) 243,817 (212,027) (130,706) 455,844 (81,321) Less: Net income (loss) attributable to non-controlling interest in consolidated subsidiaries: Continuing operations — — — — — Discontinued operations — (18,817) (26,472) 18,817 7,655 Less: Dividends on preferred shares 31,795 27,164 24,758 4,631 2,406 Net income (loss) attributable to shareholders $ 212,022 $ (220,374) $ (128,992) $ 432,396 $ (91,382) 33 The following table sets forth a reconciliation of net income (loss) attributable to shareholders from continuing operations to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Net income (loss) attributable to shareholders from continuing operations $ 212,022 $ (137,775) $ (67,619) $ 349,797 $ (70,156) Add: (Benefit from) provision for income taxes (59,800) 5,300 3,126 (65,100) 2,174 Add: Equity-based compensation expense 1,638 — — 1,638 — Add: Acquisition and transaction expenses 15,194 13,207 17,911 1,987 (4,704) Add: Losses on the modification or extinguishment of debt and capital lease obligations — 19,859 3,254 (19,859) 16,605 Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges 2,121 137,219 10,463 (135,098) 126,756 Add: Incentive allocations 17,116 3,489 — 13,627 3,489 Add: Depreciation & amortization expense (1) 213,641 190,031 175,718 23,610 14,313 Add: Interest expense and dividends on preferred shares 193,434 196,358 179,775 (2,924) 16,583 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 310 40 (1,203) 270 1,243 Less: Equity in losses of unconsolidated entities 1,606 369 1,403 1,237 (1,034) Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 597,282 $ 428,097 $ 322,828 $ 169,185 $ 105,269 __________________________________________________ (1) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) depreciation and amortization expense of $169,877, $152,917 and $147,740, (ii) lease intangible amortization of $15,126, $13,913 and $4,993 and (iii) amortization for lease incentives of $28,638, $23,201 and $22,985, respectively.
Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and preferred shares and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares and interest expense, internalization fee to affiliate, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA, if any. 32 The following table presents our consolidated results of operations: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Revenues Lease income $ 255,338 $ 207,936 $ 179,314 $ 47,402 $ 28,622 Maintenance revenue 200,809 191,347 148,846 9,462 42,501 Asset sales revenue 192,176 303,141 183,535 (110,965) 119,606 Aerospace products revenue 1,079,821 454,970 178,515 624,851 276,455 Other revenue 6,757 13,502 18,201 (6,745) (4,699) Total revenues 1,734,901 1,170,896 708,411 564,005 462,485 Expenses Cost of sales 825,884 502,132 248,385 323,752 253,747 Operating expenses 115,861 110,163 132,264 5,698 (22,101) General and administrative 14,263 13,700 14,164 563 (464) Acquisition and transaction expenses 32,296 15,194 13,207 17,102 1,987 Management fees and incentive allocation to affiliate 8,449 18,037 3,562 (9,588) 14,475 Internalization fee to affiliate 300,000 — — 300,000 — Depreciation and amortization 218,064 169,877 152,917 48,187 16,960 Asset impairment 962 2,121 137,219 (1,159) (135,098) Gain on sale of assets, net (18,705) — (77,211) (18,705) 77,211 Total expenses 1,497,074 831,224 624,507 665,850 206,717 Other income (expense) Equity in losses of unconsolidated entities (2,200) (1,606) (369) (594) (1,237) Interest expense (221,721) (161,639) (169,194) (60,082) 7,555 Loss on extinguishment of debt (17,101) — (19,859) (17,101) 19,859 Other income 17,364 7,590 207 9,774 7,383 Total other expense (223,658) (155,655) (189,215) (68,003) 33,560 Income (loss) from continuing operations before income taxes 14,169 184,017 (105,311) (169,848) 289,328 Provision for (benefit from) income taxes 5,487 (59,800) 5,300 65,287 (65,100) Net income (loss) from continuing operations 8,682 243,817 (110,611) (235,135) 354,428 Net loss from discontinued operations, net of income taxes — — (101,416) — 101,416 Net income (loss) 8,682 243,817 (212,027) (235,135) 455,844 Less: Net income (loss) attributable to non-controlling interest in consolidated subsidiaries: Discontinued operations — — (18,817) — 18,817 Less: Dividends on preferred shares 32,763 31,795 27,164 968 4,631 Less: Loss on redemption of preferred shares 7,998 — — 7,998 $ — Net (loss) income attributable to shareholders $ (32,079) $ 212,022 $ (220,374) $ (244,101) $ 432,396 The following table sets forth a reconciliation of net (loss) income attributable to shareholders from continuing operations to Adjusted EBITDA: 33 Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Net (loss) income attributable to shareholders from continuing operations $ (32,079) $ 212,022 $ (137,775) $ (244,101) $ 349,797 Add: Provision for (benefit from) income taxes 5,487 (59,800) 5,300 65,287 (65,100) Add: Equity-based compensation expense 6,006 1,638 — 4,368 1,638 Add: Acquisition and transaction expenses 32,296 15,194 13,207 17,102 1,987 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations 25,099 — 19,859 25,099 (19,859) Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges 962 2,121 137,219 (1,159) (135,098) Add: Incentive allocations 7,456 17,116 3,489 (9,660) 13,627 Add: Depreciation & amortization expense (1) 262,031 213,641 190,031 48,390 23,610 Add: Interest expense and dividends on preferred shares 254,484 193,434 196,358 61,050 (2,924) Add: Internalization fee to affiliate 300,000 — — 300,000 — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) (1,892) 310 40 (2,202) 270 Less: Equity in losses of unconsolidated entities 2,200 1,606 369 594 1,237 Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ 862,050 $ 597,282 $ 428,097 $ 264,768 $ 169,185 __________________________________________________ (1) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) depreciation and amortization expense of $218,064, $169,877 and $152,917, (ii) lease intangible amortization of $15,597, $15,126 and $13,913 and (iii) amortization for lease incentives of $28,370, $28,638 and $23,201, respectively.
See above discussion regarding presentation of asset sales. • Maintenance revenue increased $42.5 million primarily due to the recognition of maintenance deposits due to the early redelivery of five aircraft, an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation. • Lease income increased $20.6 million primarily due to an increase in the number of aircraft and engines placed on lease during the year, partially offset by an increase in the number of aircraft and engines redelivered. • Other revenue decreased $4.1 million primarily due to a decrease in end-of-lease redelivery compensation.
Aircraft maintenance revenue increased $16.0 million, primarily due to $20.1 million of higher maintenance reserves taken into revenue due to the early redelivery of five aircraft, partially offset by less aircraft on lease. • Lease income increased by $20.6 million, primarily due to an increase in engine lease revenue of $19.7 million, driven by an increased number of engines on lease, partially offset by an increase in the number of engines redelivered. • Other revenue decreased $4.1 million primarily due to a decrease in end-of-lease redelivery compensation.
Expenses Total expenses increased $181.2 million primarily due to an increase in costs of sales and operating expenses. • Cost of sales increased $170.8 million primarily as a result of an increase in Aerospace Product sales and the gross presentation described above. • Operating expenses increased $8.5 million primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in shipping and storage fees as operations continued to ramp-up in 2023.
See above discussion regarding presentation of asset sales and impact on Gain on sale of assets, net. • Operating expenses increased by $8.5 million, primarily due to a $7.2 million increase in commission expenses due to the increase in sales from the used material program as well as a $1.2 million increase in shipping and storage fees as operations continued to ramp-up in 2023.
Comparison of the years ended December 31, 2022 and 2021 Revenues 44 Total revenues in creased $12.8 million primarily due to an increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.
Comparison of the years ended December 31, 2023 and 2022 Revenues Total revenues increased by $7.4 million, primarily due to an increase in the Offshore Energy business, as one of our vessels was on-hire longer in 2023 compared to 2022, and with a charterer at higher rates.
Corporate and Other The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Revenues Lease income $ 28,232 $ 20,246 $ 10,131 $ 7,986 $ 10,115 Other revenue 6,083 6,702 4,030 (619) 2,672 Total revenues 34,315 26,948 14,161 7,367 12,787 Expenses Operating expenses 51,828 39,065 21,429 12,763 17,636 General and administrative 13,700 14,164 13,448 (464) 716 Acquisition and transaction expenses 6,322 11,041 16,929 (4,719) (5,888) Management fees and incentive allocation to affiliate 18,037 3,562 684 14,475 2,878 Depreciation and amortization 10,862 8,401 7,996 2,461 405 Interest expense 161,639 169,194 155,017 (7,555) 14,177 Total expenses 262,388 245,427 215,503 16,961 29,924 Other income (expense) Loss on extinguishment of debt — (19,859) (3,254) 19,859 (16,605) Other income (expense) 943 (39) 37 982 (76) Total other income (expense) 943 (19,898) (3,217) 20,841 (16,681) Loss before income taxes (227,130) (238,377) (204,559) 11,247 (33,818) Provision for (benefit from) income taxes 833 (163) (82) 996 (81) Net loss (227,963) (238,214) (204,477) 10,251 (33,737) Less: Net loss attributable to non-controlling interest in consolidated subsidiaries — — — — — Less: Dividends on preferred shares 31,795 27,164 24,758 4,631 2,406 Net loss attributable to shareholders from continuing operations $ (259,758) $ (265,378) $ (229,235) $ 5,620 $ (36,143) 43 The following table sets forth a reconciliation of net loss attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21 Net loss attributable to shareholders from continuing operations $ (259,758) $ (265,378) $ (229,235) $ 5,620 $ (36,143) Add: Provision for (benefit from) income taxes 833 (163) (82) 996 (81) Add: Equity-based compensation expense 1,076 — — 1,076 — Add: Acquisition and transaction expenses 6,322 11,041 16,929 (4,719) (5,888) Add: Losses on the modification or extinguishment of debt and capital lease obligations — 19,859 3,254 (19,859) 16,605 Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations 17,116 3,489 — 13,627 3,489 Add: Depreciation and amortization expense 10,862 8,401 7,996 2,461 405 Add: Interest expense and dividends on preferred shares 193,434 196,358 179,775 (2,924) 16,583 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Less: Equity in (earnings) losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ (30,115) $ (26,393) $ (21,363) $ (3,722) $ (5,030) Comparison of the years ended December 31, 2023 and 2022 Revenues Total revenues increased $7.4 million primarily due to an increase in the Offshore Energy business, as one of our vessels was on-hire longer in 2023 compared to 2022, and at higher rates.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $85.7 million, primarily due to the changes noted above. 43 Corporate and Other The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Revenues Lease income $ 20,927 $ 28,232 $ 20,246 $ (7,305) $ 7,986 Other revenue 5,716 6,083 6,702 (367) (619) Total revenues 26,643 34,315 26,948 (7,672) 7,367 Expenses Operating expenses 56,548 51,828 39,065 4,720 12,763 General and administrative 14,263 13,700 14,164 563 (464) Acquisition and transaction expenses 17,650 6,322 11,041 11,328 (4,719) Management fees and incentive allocation to affiliate 8,449 18,037 3,562 (9,588) 14,475 Internalization fee to affiliate 300,000 — — 300,000 — Depreciation and amortization 9,937 10,862 8,401 (925) 2,461 Gain on sale of assets, net (18,705) — — (18,705) — Total expenses 388,142 100,749 76,233 287,393 24,516 Other income (expense) Loss on extinguishment of debt (17,101) — (19,859) (17,101) 19,859 Interest expense (221,721) (161,639) (169,194) (60,082) 7,555 Other income (expense) 2,695 943 (39) 1,752 982 Total other expense (236,127) (160,696) (189,092) (75,431) 28,396 Loss before income taxes (597,626) (227,130) (238,377) (370,496) 11,247 (Benefit from) provision for income taxes (49,713) 833 (163) (50,546) 996 Net loss (547,913) (227,963) (238,214) (319,950) 10,251 Less: Dividends on preferred shares 32,763 31,795 27,164 968 4,631 Less: Loss on redemption of preferred shares 7,998 — — 7,998 — Net loss attributable to shareholders from continuing operations $ (588,674) $ (259,758) $ (265,378) $ (327,948) $ 5,620 44 The following table sets forth a reconciliation of net loss attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22 Net loss attributable to shareholders from continuing operations $ (588,674) $ (259,758) $ (265,378) $ (328,916) $ 5,620 Add: (Benefit from) provision for income taxes (49,713) 833 (163) (50,546) 996 Add: Equity-based compensation expense 5,113 1,076 — 4,037 1,076 Add: Acquisition and transaction expenses 17,650 6,322 11,041 11,328 (4,719) Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations 25,099 — 19,859 25,099 (19,859) Add: Changes in fair value of non-hedge derivative instruments — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations 7,456 17,116 3,489 (9,660) 13,627 Add: Depreciation and amortization expense 9,937 10,862 8,401 (925) 2,461 Add: Interest expense and dividends on preferred shares 254,484 193,434 196,358 61,050 (2,924) Add: Internalization fee to affiliate 300,000 — — 300,000 — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Less: Equity in (earnings) losses of unconsolidated entities — — — — — Less: Non-controlling share of Adjusted EBITDA — — — — — Adjusted EBITDA (non-GAAP) $ (18,648) $ (30,115) $ (26,393) $ 11,467 $ (3,722) Comparison of the years ended December 31, 2024 and 2023 Revenues Total revenues decreased by $7.7 million, primarily due to a $7.3 million decrease in the Lease income.
We made principal payments of $1.6 billion related to the Bridge Loan Agreement, Revolving Credit Facility and Senior Notes due 2022. • Proceeds from the sale of assets were $477.9 million, $414.2 million and $163.4 million during the years ended December 31, 2023, 2022, and 2021, respectively. • Proceeds from the issuance of ordinary shares, net of issuance costs were $323.1 million during the year ended December 31, 2021.
We made total principal repayments of (i) $604.5 million relating to the Revolving Credit Facility, (ii) $340.0 million related to the 2021 Bridge Loans and (iii) $200.0 million related to the Senior Notes due 2025. • Proceeds from the sale of assets were $969.3 million, $477.9 million and $414.2 million during the years ended December 31, 2024, 2023, and 2022, respectively. • Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $61.7 million during the year ended December 31, 2023.
Depreciation and amortization increased $5.2 million primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.
See above discussion regarding presentation of asset sales and impact on Gain on sale of assets, net. 40 • Depreciation and amortization expense increased by $14.1 million, driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool. • Acquisition and transaction expense increased by $5.2 million, driven by higher costs associated with the acquisition of aviation leasing equipment.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $85.7 million primarily due to the changes noted above. 42 Comparison of the years ended December 31, 2022 and 2021 Revenues Total Aerospace Products revenue increased $155.2 million primarily driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations ramped up in 2022.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $220.6 million, primarily due to the changes noted above. 42 Comparison of the years ended December 31, 2023 and 2022 Revenues Total Aerospace products revenue increased by $276.5 million, primarily due to a $213.0 million increase in CFM56-7B, CFM56-5B and V2500 engine and module sales, a $44.7 million increase in parts inventory sales, $16.7 million increase in revenue from engine management contracts, and other revenues of $2.0 million from the QuickTurn acquisition.
Asset sales revenue increased $119.6 million primarily due to an increase in the sale of commercial aircraft and engines in our Aviation Leasing segment during 2023. See above discussion regarding presentation of asset sales.
See above discussion regarding presentation of asset sales. • Asset sales revenue increased by $119.6 million, primarily due to an overall increase in the number of material sales transactions of commercial aircraft and engines. Specifically, 13 aircraft and 41 engines were sold in 2023 as compared to eight aircraft and 71 engines sold in 2022.
Our principal uses of liquidity have been and continue to be (i) acquisitions of aircraft and engines, (ii) dividends to our ordinary and preferred shareholders, (iii) expenses associated with our operating activities, and (iv) debt service obligations associated with our investments. • Cash used for the purpose of making investments was $861.5 million, $831.5 million and $1.5 billion during the years ended December 31, 2023, 2022, and 2021, respectively. • Distributions to shareholders, including cash dividends, were $151.6 million, $155.6 million and $142.8 million during the years ended December 31, 2023, 2022 and 2021, respectively. • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.
In the future, instead of acquiring on-lease aircraft directly, as part of the Strategic Capital Initiative, we will invest in the related partnerships and such partnerships will acquire on-lease aircraft. • Cash used for the purpose of making investments was $1,526.2 million, $861.5 million and $831.5 million during the years ended December 31, 2024, 2023, and 2022, respectively. • Distributions to shareholders, including cash dividends, were $154.3 million, $151.6 million and $155.6 million during the years ended December 31, 2024, 2023 and 2022, respectively. • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.
Our engine and module sales are facilitated through The Module Factory, a dedicated commercial maintenance program, designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines, performed by a third party.
Our engine, module and parts sales are facilitated through a dedicated commercial maintenance program, designed to focus on modular and parts repair and refurbishment of CFM56-7B, CFM56-5B and V2500 engines. In September 2024, we acquired LMCES to further enhance this business and establish permanent engine and module manufacturing capabilities.
The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statement of Operations beginning in the third quarter of 2022.
The sale of CFM56-7B, CFM56-5B and V2500 engines are included in the Aerospace Products Segment and the sale of aircraft and other engines are included in the Aviation Leasing Segment. The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statements of Operations beginning in the third quarter of 2022.
Additionally, repairs and maintenance expense increased due to repairs on one of our vessels. • Depreciation and amortization increased $2.5 million primarily due to new assets being placed into service in the Offshore Energy business. • Interest expense decreased $7.6 million, which reflects a decrease in the average outstanding debt of approximately $183.8 million primarily due to decreases in (i) the 2021 Bridge Loans of $178.3 million and (ii) the Senior Notes due 2025 of $116.7 million, which were partially redeemed in August 2022, partially offset by increases in (iii) the Revolving Credit Facility of $28.7 million and (iv) the Senior Notes due 2030 of $82.8 million, which were issued in November 2023. • Acquisition and transaction expenses decreased $4.7 million primarily due to lower professional fees related to strategic transactions.
This loss was related to the pay-down of the 2021 Bridge Loan, issued in December 2021 and February 2022, and the partial redemption of Senior Notes due 2025. 36 • Interest expense decreased $7.6 million, which reflects a decrease in the average outstanding debt of approximately $183.8 million primarily due to decreases in (i) the 2021 Bridge Loans of $178.3 million and (ii) the Senior Notes due 2025 of $116.7 million, which were partially redeemed in August 2022, partially offset by increases in (iii) the Revolving Credit Facility of $28.7 million and (iv) the Senior Notes due 2030 of $82.8 million, which were issued in November 2023. • Other income increased $7.4 million primarily driven by a $5.3 million gain on consolidation of investment in connection with the QuickTurn acquisition within our Aerospace Products Segment and $1.0 million of interest income from the Company’s investments in money market funds.
Expenses Total expenses increased $17.0 million primarily due to higher management fees and incentive allocation to affiliate, operating expenses, depreciation and amortization, partially offset by lower interest expense and lower acquisition and transaction expenses. • Management fees and incentive allocation to affiliate increased $14.5 million primarily due to an increase in incentive fee due to the Manager driven by an increase in net income. • Operating expenses increased $12.8 million which reflects increases in offshore crew expenses, project costs and other operating expenses for one of our vessels driven by increased cost of operations based on the operating location of the vessel, as well as increased number of days on-hire.
Expenses Total expenses increased by $24.5 million, due to the following: • Management fees and incentive allocation to affiliate increased by $14.5 million, primarily due to a $13.6 million increase in incentive fee due to the Former Manager driven by an increase in net income. • Operating expenses increased by $12.8 million, primarily due to increases in the Offshore Energy business, driven by increases in offshore crew expenses of $2.1 million, project costs of $3.9 million and other operating expenses of $1.3 million for one of our vessels.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $105.3 million primarily due to the changes noted above. Aviation Leasing Segment As of December 31, 2023, in our Avi ation Leasing segment, we own and manage 363 aviation assets, consisting of 96 commercial aircraft and 267 engines, including eight aircraft and seventeen engines that were still located in Russia.
Aviation Leasing Segment As of December 31, 2024, in our Aviation Leasing segment, we own and manage 421 aviation assets, consisting of 109 commercial aircraft and 312 engines, including eight aircraft and seventeen engines that were still located in Russia.
Provision for income taxes The provision for income taxes increased $2.2 million primarily due to a higher provision in the Aerospace Products segment. 36 Net loss from continuing operations Net loss from continuing operations increased $67.8 million primarily due to the changes noted above.
As the Company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes. Net income (loss) from continuing operations Net income from continuing operations increased by $354.4 million, primarily due to the changes noted above.
See Note 11 to the consolidated financial statements for additional information. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $87.2 million primarily due to the changes noted above.
Adjusted EBITDA (Non-GAAP) Adjusted EBIT DA increased by $11.5 million, primarily due to the changes noted above.
Comparison of the years ended December 31, 2023 and 2022 Revenues Total Aerospace Products revenue increased $276.5 million primarily driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations continued to ramp-up in 2023. See above discussion regarding presentation of asset sales.
Comparison of the years ended December 31, 2023 and 2022 Total revenues increased by $462.5 million, driven by the following: 35 • Aerospace products revenue increased by $276.5 million, primarily due to a $213.0 million increase in CFM56-7B, CFM56-5B and V2500 engines and module sales, a $44.7 million increase in parts inventory sales, $16.7 million increase due to engine management contracts, and other sales revenue of $2.0 million from the QuickTurn acquisition.
Expenses Total expenses increased $102.1 million primarily due to an increase in costs of sales and operating expenses. • Cost of sales increased $95.2 million primarily as a result of an increase in Aerospace Product sales and the gross presentation described above. • Operating expenses increased $6.5 million primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in professional fees and other operating expenses due to the ramp-up of Aerospace Products.
Additionally, repairs and maintenance expense increased $0.6 million due to repairs on one of our vessels. • an increase of $8.5 million in the Aerospace Products segment primarily due to a $7.2 million increase in commission expenses due to the increase in sales from the used material program as well as $1.2 million increase in shipping and storage fees as operations continued to ramp-up in 2023.
Expenses Total expenses decreased $76.2 million primarily driven by a decrease in asset impairment and operating expenses, partially offset by an increase in cost of sales, depreciation and amortization and acquisition and transaction expenses. 39 • Asset impairment decreased $135.1 million primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.
During 2023, eight aircraft and four engines had end-of-lease redelivery compensation, as compared to 18 aircraft and one engine in 2022. Expenses Total expenses decreased by $17.1 million, driven by the following: • Asset impairment decreased by $135.1 million, primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.
Used serviceable material is sold through our exclusive partnership with AAR Corp, who is responsible for the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool.
Refer to Note 4 “Acquisition of Lockheed Martin Commercial Engine Solutions”, for additional information. In addition, other serviceable used modules and parts are sold through our ex clusive partnership, who is responsible for the teardown, repair, marketing and sales of parts from our CFM56 engine pool.
Upon merger completion, Fortress Transportation and Infrastructure Investors LLC public common shareholders’ shares of the Company were exchanged automatically for shares of FTAI Aviation Ltd. without any further action from the shareholders. Operating Segments The key factors used to identify the reportable segments are the organization and alignment of our internal operations and the nature of our products and services.
Upon merger completion, Fortress Transportation and Infrastructure Investors LLC public common shareholders’ shares of the Company were exchanged automatically for shares of FTAI Aviation Ltd. without any further action from the shareholders. Strategic Capital Initiative On December 30, 2024, the Company announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors.
Comparison of the years ended December 31, 2022 and 2021 Revenues Total revenues increased $204.8 million driven by an increase in asset sales revenue, maintenance revenue and other revenue, partially offset by a decrease in lease income. • Asset sales revenue increas ed $183.5 million primarily due to an increase in the sale of commercial aircraft and engines during 2022.
Comparison of the years ended December 31, 2024 and 2023 Revenues Total revenues decreased by $53.2 million, driven by the following: • Asset sales revenue decreased by $111.0 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines.
Lease income increased $28.6 million primarily due to an increase in the number of aircraft and engines placed on lease during the year and an inc rease in the Offshore Energy business as one of our vessels was on-hire longer in 2023 compared to 2022 and at higher rates.
An increase of $7.4 million in the Offshore Energy business due to one of our vessel being on-hire longer in 2023 compared to 2022, and with a charterer at higher rates. • Other revenue decreased by $4.7 million, primarily due to a decreas e in assets with end-of-lease redelivery compensation.
Cash used in operating activities from discontinued operations were $63.9 million, and $61.7 million for the years ended December 31, 2022 and 2021, respectively. Cash used in investing activities from discontinued operations were $136.3 million, and $828.7 million for the years ended December 31, 2022 and 2021, respectively.
Cash Flows of Discontinued Operations The cash flows related to discontinued operations have not been segregated and are included in the Consolidated Statements of Cash Flows for all periods presented. Cash used in operating activities from discontinued operations were $63.9 million for the year ended December 31, 2022.
During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1.0 billion, (ii) Revolving Credit Facility of $690.0 million, (iii) Bridge Loan Agreement of $650.0 million, (iv) Series 2021 Bonds of $425.0 million, (v) 2021 Bridge Loans of $100.5 million and (vi) EB-5 Loan Agreement of $26.1 million.
During the year ended December 31, 2023 , additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $455.0 million and (ii) Senior Notes Due 2030 of $500.0 million. We made total principal repayments of $605.0 million relating to the Revolving Credit Facility.
Additionally, Corporate and Other also includes offshore energy related assets, which consist of vessels and equipment that support offshore oil and gas activities and production which are typically subject to operating leases.
Additionally, Corporate and Other also includes offshore energy related assets, which consist of equipment that support offshore oil and gas activities and production. 31 Results of Operations Adjusted EBITDA (Non-GAAP) Besides net income (loss), the chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as a key performance measure.
There were no issuances of ordinary shares in 2023 or 2022. • Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $61.7 million and $101.2 million during the years ended December 31, 2023 and 2021, respectively. There were no issuances of preferred shares during the year ended December 31, 2022.
There were no issuances of preferred shares during the years ended December 31, 2024 and 2022.
Our two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers.
The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to lessees and customers. The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines.
See Note 5 to the consolidated financial statements for additional information. • Operating expenses increased $48.5 million primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses. • Depreciation and amortization expense increased $4.6 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.
Specifically, three aircraft and 14 engines were sold in 2024 compared to 13 aircraft and 41 engines sold in 2023. • Operating expenses decreased by $2.4 million, primarily driven by a decrease in bad debt expense of $5.9 million, partially offset by increases in legal fees of $2.7 million and repairs and maintenance expense of $1.0 million. • Depreciation and amortization expense increased by $43.1 million, driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool. • Acquisition and transaction expen ses increased by $2.6 million, primarily due to higher legal fees incurred in evaluating and completing strategic transactions.
Aerospace Products revenue increased $276.5 million driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations continued to ramp-up in 2023. See above discussion regarding presentation of asset sales.
See above discussion regarding presentation of asset sales. • Maintenance revenue increased $42.5 million. Engine maintenance revenue increased by $26.5 million, driven by an increased number of engines on lease in 2023 as compared to 2022.
Other income (expense) Total other income decreased $58.9 million primarily due to a decrease of $59.0 million in Gain on sale of assets, net due to the change in presentation of asset sales.
Specifically, 13 aircraft and 41 engines were sold in 2023 as compared to eight aircraft and 71 engines sold in 2022. • Gain on sale of assets, net decreased by $59.0 million, due to the change in presentation of asset sales recorded during 2022.
Depreciation and amortization increased $17.0 million primarily driven by an increase i n the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.
See above discussion regarding presentation of asset sales and impact on Gain on sale of assets, net. • Depreciation and amortization increased by $17.0 million, primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool. • Management fees and incentive allocation to affiliate increased by $14.5 million, primarily due to a $13.6 million increase in incentive fee due to the Former Manager driven by an increase in net income. • Asset impairment decreased by $135.1 million, primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−5 removed5 unchanged
Biggest changeInterest Rate Risk Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. Interest rate risk is highly sensitive to many factors, including the U.S. government’s monetary and tax policies, global economic factors and other factors beyond our control.
Biggest changeInterest rate risk is highly sensitive to many factors, including the U.S. government’s monetary and tax policies, global economic factors and other factors beyond our control. We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposure relates to our term loan arrangements.
As of December 31, 2023, assuming we do not hedge our exposure to interest rate fluctuations related to our outstanding floating rate debt, a hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would not have increased or decreased interest expense over the next 12 months. 49
As of December 31, 2024, assuming we do not hedge our exposure to interest rate fluctuations related to our outstanding floating rate debt, a hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would not have increased or decreased interest expense over the next 12 months. 51
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market risk represents the risk of changes in value of a financial instrument, caused by fluctuations in interest rates and foreign exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. We are exposed to the market risks described below.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market risk represents the risk of changes in value of a financial instrument, caused by fluctuations in interest rates and foreign exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows.
Removed
We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposure relates to our term loan arrangements. LIBOR and other indices which are deemed “benchmarks” are the subject of recent national, international, and other regulatory guidance and proposals for reform.
Added
We are exposed to the market risks described below. 50 Interest Rate Risk Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates.
Removed
The ICE Benchmark Administration ceased publication of one-week and two-month USD LIBOR settings after December 31, 2021 and the remaining USD LIBOR settings after June 30, 2023, other than certain USD LIBOR settings that are expected to continue to be published under a synthetic methodology until September 2024.
Removed
In anticipation of LIBOR’s phase out, we amended our revolving credit facility to incorporate SOFR as the successor rate to LIBOR.
Removed
We continue to monitor related reform proposals and evaluate the related risks; however, it is not possible to predict the effects of any of these developments, and any future initiatives to regulate, reform or change the manner of administration of LIBOR, SOFR or other benchmark indices could result in adverse consequences to the rate of interest payable and receivable on, market value of and market liquidity for financial instruments tied to variable interest rate indices.
Removed
In addition, the following discussion does not take into account our Series A and Series B preferred shares, on which distributions currently accrue interest at a fixed rate but will accrue interest at a floating rate based on a certain variable interest rate index plus a spread from and after September 15, 2024.

Other FTAI 10-K year-over-year comparisons