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What changed in FTAI Aviation Ltd.'s 10-K — 2024 vs 2025

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

+275 added−327 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-03)

Top changes in FTAI Aviation Ltd.'s 2025 10-K

275 paragraphs added · 327 removed · 216 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

28 edited+7 added−24 removed21 unchanged
Biggest changeFurthermore, 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.
Biggest changeMost 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. 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 currently invest across two market sectors: aviation leasing and aerospace products. We target assets that, on a combined basis, generate strong and stable cash flows with the potential for earnings growth and asset appreciation.
We currently invest across two market sectors: aerospace products and aviation leasing. We target assets that, on a combined basis, generate strong and stable cash flows with the potential for earnings growth and asset appreciation.
In addition, in certain cases, we maintain contingent liability coverage for any claims or losses on our assets while they are on hire or otherwise in the possession of a third-party. Finally, we procure insurance for our assets when they are not on hire or are otherwise under our control.
In addition, in certain cases, we maintain contingent liability coverage for any claims or losses on our assets while they are on lease or otherwise in the possession of a third-party. Finally, we procure insurance for our assets when they are not on lease or are otherwise under our control.
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.
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 405 West 13th Street, 3rd Floor, New York, New York 10014.
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.
In connection with the termination of the Management Agreement, the Company (i) paid 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.
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.
Our aviation equipment was approximately 77% utilized during the three months ended December 31, 2025, 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.
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.
Please refer to Note 12 of our consolidated financial statements included in Part II, Item 8 in this Annual Report on Form 10-K for further details regarding our Affiliate Transactions. 5 Our Portfolio We own and acquire high quality aviation equipment that is essential for the transportation of goods and people globally.
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.
As of December 31, 2025, 37 of our commercial aircraft and 143 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.
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.
Our aircraft currently have a weighted average remaining lease term of 44 months, and our engines currently on-lease have an average remaining lease term of 38 months.
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.
Aviation Leasing As of December 31, 2025, in our Aviation Leasing segment, we own and manage 290 aviation assets, consisting of 47 commercial aircraft and 243 engines, including eight aircraft and seventeen engines that were still located in Russia.
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.
In addition, the 2025 Partnership agreed to acquire 45 on-lease narrowbody aircraft from us for an estimated net purchase price of $549 million and signed an agreement through which our Maintenance, Repair and Exchange (“MRE”) business exclusively provides replacement aircraft engines and modules for the life of the partnership.
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.
Certain of our current sustainability solutions and investments are highlighted below, and we expect to continue to explore additional sustainability-related opportunities. Human Capital Management We had 985 full-time employees and independent contractors as of December 31, 2025. Approximately 71% of our 494 full-time employees in Canada are covered by collective bargaining agreements.
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.
The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft.
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.
The Strategic Capital Initiative, and its related partnerships, allows us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The first partnership under the initiative (the “2025 Partnership”) focuses on acquiring 737NG and A320ceo aircraft. The 2025 Partnership completed its fundraise in October 2025 with $2.0 billion of equity commitments.
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.
Following the Internalization, the Company no longer pays management fees or incentive distributions to the Former Manager and Master GP.
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.
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. 7 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.
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.
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 are a leading independent engine maintenance platform focused on the CFM56-5B, CFM56-7B and V2500 aircraft engines which power the 737NG and A320ceo aircraft.
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.
We maintain ongoing relationships and discussions with our customers and lessees and seek to have consistent dialogue. 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.
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.
These relationships include senior executives at lessors and operators, end users of aviation assets, as well as banks, lenders and other asset owners. 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.
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.
We provide aircraft management services to the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services.
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.
Credit Process We monitor the credit quality of our customers and lessees on an ongoing basis. This monitoring includes interacting with our customers and lessees regularly to monitor collections, review periodic financial statements and discuss their operating performance.
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.
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. 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.
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.
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. Aspects that will factor into this process include relevant market conditions, the asset’s age, lease profile, relative concentration or remaining expected useful life.
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.
We derive a significant percentage of our revenue within specific sectors from a limited number of customers and lessees.
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.
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.
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.
The Company also made a minority capital commitment and will make additional commitments to the 2025 Partnership in the same proportion relative to additional third-party institutional investors. 6 Asset Management The Company actively manages and monitors our portfolios of assets on an ongoing basis.
(“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 Strategy In general, we seek to own a diverse mix of high-quality aviation assets and equipment that generate predictable cash flows through their use in our maintenance platform or through leasing activities. We believe that by investing in a diverse mix of assets, we can select from among the best risk-adjusted investment opportunities.
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.
On a periodic basis, our Company discusses the status of our acquired assets with our board of directors. We maintain relationships with operators worldwide and, through these relationships, hold direct conversations as to leasing needs and opportunities.
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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.
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We repair and rebuild engines in our maintenance facilities and with our joint venture partners, and sell or lease the engines to airlines and asset owners around the world. Our primary business model is to sell or lease engines via exchange through our proprietary Maintenance, Repair and Exchange (“MRE”) model which is reported under our Aerospace Products segment.
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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.
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We also own and manage a portfolio of on- and off-lease aircraft and engines through our Aviation Leasing segment. While historically these investment activities have been primarily held on balance sheet, at the end of 2024, we launched our Strategic Capital Initiative, which consists of an asset management business that manages third-party capital to invest in on-lease aircraft and engines.
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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.
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We expect our primary investment activities to be through our Strategic Capital Initiative going forward. As of December 31, 2025, we had total consolidated assets of $4.4 billion and total equity of $334.2 million.
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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.
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Aerospace Products The Aerospace Products segment, through our maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines .
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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.
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On December 30, 2025, the Company announced the launch of FTAI Power, a platform focused on converting CFM56 engines to power turbines.
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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.
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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, 2025 5 104 109 Purchases — 28 28 Sales — (47) (47) Transfers — (43) (43) Assets at December 31, 2025 5 42 47 Engines Assets at January 1, 2025 23 289 312 Purchases — 113 113 Sales (5) (216) (221) Transfers — 39 39 Assets at December 31, 2025 18 225 243 On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors.
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We look for unique investments, including assets that are distressed or undervalued, or where we believe that we can add value through active management. We consider investments across the size spectrum, including smaller opportunities often overlooked by other investors, particularly where we believe we may be able to grow the investment over time.
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A substantial portion of our revenue has historically been derived from a small number of customers and lessees. As of and for the year ended December 31, 2025, there was one customer representing 23% of total accounts receivable, net, and we earned 13% and 10% of total revenue from two customers in the Aerospace Products segment.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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In determining the amount of leverage for each acquisition, we consider a number of characteristics, including, but not limited to, the existing cash flow, the length of the lease or contract term, and the specific counterparty.
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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.
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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.
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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.
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The 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 .
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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.
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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.
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We believe our Company’s experience in the aviation industry, in both leasing and maintenance and our access to capital provide a competitive advantage.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese rules generally continue to apply to each shareholder who held our shares during the PFIC years even if the Company is not treated as a PFIC for any subsequent taxable year. The effect of this deferred tax could be materially adverse to you.
Biggest changeThese rules generally continue to apply to each shareholder who held our shares during any PFIC Year (“PFIC Holders”) and has not made either (i) a valid QEF election for the first PFIC Year in which such shareholder held our shares or (ii) certain other elections with respect to our shares under the PFIC rules, even if the Company is not treated as a PFIC for any subsequent taxable year.
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.
A number of our contractual arrangements - for example, our leasing of 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.
In addition, a portion of certain of our or our non-U.S. corporate subsidiaries’ income is treated as effectively connected with a U.S. trade or business and is accordingly subject to U.S. federal income tax or may be subject to gross-basis U.S. withholding tax.
In addition, a portion of certain of our non-U.S. corporate subsidiaries’ income is treated as effectively connected with a U.S. trade or business and is accordingly subject to U.S. federal income tax or may be subject to gross-basis U.S. withholding tax.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our shares include: • a shift in our investor base; • our quarterly or annual earnings, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions or dispositions; • the failure of securities analysts to cover our ordinary shares; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and share price performance of other comparable companies; • prevailing interest rates or rates of return being paid by other comparable companies and the market for securities similar to our preferred shares; • additional issuances of preferred shares; • whether we declare distributions on our preferred shares; • overall market fluctuations; • general economic conditions; and • developments in the markets and market sectors in which we participate.
Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our shares include: • a shift in our investor base; • our quarterly or annual earnings, or those of other comparable companies; • actual or anticipated fluctuations in our operating results; • changes in accounting standards, policies, guidance, interpretations or principles; • announcements by us or our competitors of significant investments, acquisitions or dispositions; • the failure of securities analysts to cover our ordinary shares; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and share price performance of other comparable companies; • prevailing interest rates or rates of return being paid by other comparable companies and the market for securities similar to our preferred shares; 21 • additional issuances of preferred shares; • whether we declare distributions on our preferred shares; • overall market fluctuations; • general economic conditions; and • developments in the markets and market sectors in which we participate.
The indentures governing our Senior Notes and the Revolving Credit Facility restrict among other things, our a nd certain of our subsidiaries’ ability to: • merge, consolidate or transfer all, or substantially all, of our assets; • incur additional debt or issue preferred shares; • make certain investments or acquisitions; • create liens on our or our subsidiaries’ assets; • sell assets; • make distributions on or repurchase our shares; • enter into transactions with affiliates; and • create dividend restrictions and other payment restrictions that affect our subsidiaries.
The indentures governing our Senior Notes and the Revolving Credit Facility restrict among other things, our a nd certain of our subsidiaries’ ability to: • merge, consolidate or transfer all, or substantially all, of our assets; • incur additional debt or issue preferred shares; • make certain investments or acquisitions; • create liens on our or our subsidiaries’ assets; • sell assets; 16 • make distributions on or repurchase our shares; • enter into transactions with affiliates; and • create dividend restrictions and other payment restrictions that affect our subsidiaries.
Some of our subsidiaries are subject to income, withholding or other taxes in certain non-U.S. jurisdictions by reason of their jurisdiction of incorporation, activities and operations, where their assets are used or where the lessees of their assets (or others in possession of their assets) are located, and it is also possible that taxing authorities in any such jurisdictions could assert that we or our subsidiaries are subject to greater taxation than we currently face or otherwise anticipate.
Our subsidiaries are subject to income, withholding or other taxes in certain non-U.S. jurisdictions by reason of their jurisdiction of incorporation, activities and operations, where their assets are used or where the lessees of their assets (or others in possession of their assets) are located, and it is also possible that taxing authorities in any such jurisdictions could assert that we or our subsidiaries are subject to greater taxation than we currently face or otherwise anticipate.
For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
For a foreign judgment to be 19 enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
If there is not sufficient trading in our shares, or if 50% of our shares are held by certain 5% shareholders, we could lose our eligibility for an exemption from U.S. federal income taxation on rental income from our aircraft or ships used in “international traffic” and could be subject to U.S. federal income taxation which would adversely affect our business and result in decreased cash available for distribution to our shareholders.
If there is not sufficient trading in our shares, or if 50% of our shares are held by certain 5% shareholders, we could lose our eligibility for an exemption from U.S. federal income taxation on rental income from our aircraft used in “international traffic” and could be subject to U.S. federal income taxation which would adversely affect our business and result in decreased cash available for distribution to our shareholders.
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.
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; 14 • 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.
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.
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.
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.
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.
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.
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 15 assets are to be used outside of the United States.
We can satisfy these requirements in any year if, for more than half the days of such year, our shares are primarily and regularly traded on a recognized exchange and certain shareholders, each of whom owns 5% or more of our shares (applying certain attribution rules), do not collectively own more than 50% of our shares.
We can satisfy these requirements in any year if, for more than half the days of such year, our shares are primarily and regularly traded on a recognized exchange and certain shareholders, each of whom owns 5% or more of our shares (applying certain attribution rules), do not collectively own more 20 than 50% of our shares.
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.
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. 23 Item 1B. Unresolved Staff Comments We have no unresolved staff comments.
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, 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.
A failure to meet these evolving expectations could negatively impact sales into the industry and expose us to legal or contractual liability. 11 From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which often are more stringent than existing regulations.
A failure to meet these evolving expectations could negatively impact sales into the industry and expose us to legal or contractual liability. From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which often are more stringent than existing regulations.
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 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, changes in laws or regulations could affect our ability to continue to execute on our Strategic Capital Initiative in a manner that does not require us or any of our subsidiaries to register as an investment company under the Investment Company Act or as an investment adviser under the Investment Advisers Act. 14 • Diligence Risk .
In addition, changes in laws or regulations could affect our ability to continue to execute on our Strategic Capital Initiative in a manner that does not require us or any of our subsidiaries to register as an investment company under the Investment Company Act or as an investment adviser under the Investment Advisers Act. • Diligence Risk .
The failure to effectively complete the transition of these services to a fully internal basis, efficiently manage the transition with the Former Manager or find adequate internal replacements for these services, could impede our ability to achieve the targeted cost savings of the Internalization and adversely affect our operations.
The failure to effectively complete the transition of the Former Manager’s services to a fully internal basis, efficiently manage the transition with the Former Manager or find adequate internal replacements for these services, could impede our ability to achieve the targeted cost savings of the Internalization and adversely affect our operations.
Although we (or one or more of our non-U.S. corporate subsidiaries) are expected to be treated as engaged in a U.S. trade or business, it is currently expected that only a small portion of our taxable income will be treated as effectively connected with such U.S. trade or business.
Although we (or one or more of our non-U.S. corporate subsidiaries) are expected to be treated as engaged in a U.S. trade or business, it is currently expected that only a portion of our taxable income will be treated as effectively connected with such U.S. trade or business.
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.
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 and lessees to make reductions in future capital budgets and spending.
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.
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.
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.
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, including on international trade; • 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.
Sales or issuances of our ordinary shares could adversely affect the market price of our ordinary shares. Sales of substantial amounts of our ordinary shares in the public market, or the perception that such sales might occur, could adversely affect the market price of our ordinary shares.
Sales or issuances of our ordinary shares could adversely affect the market price of our ordinary shares. 22 Sales of substantial amounts of our ordinary shares in the public market, or the perception that such sales might occur, could adversely affect the market price of our ordinary shares.
The commercial aviation industry is historically cyclical and has been negatively affected in the past, and could be negatively affected in future periods, by geopolitical events, natural disasters, pandemics, supply chain disruptions, labor issues, environmental concerns (including climate change), lack of capital, cost inflation, and weak economic conditions.
The commercial aviation industry is historically cyclical and has been negatively affected in the past, and could be negatively affected in future periods, by geopolitical events, natural disasters, pandemics, supply chain disruptions, labor issues, environmental concerns (including climate change), lack of capital, cost inflation, and weak or volatile economic conditions.
While there has historically been a lack of consistent climate change legislation, as climate change concerns continue to grow, further legislation and regulations are expected to continue in areas such as greenhouse gas emissions control, emission disclosure requirements and building codes or other infrastructure requirements that impose energy efficiency standards.
While there has historically been a lack of consistent climate change legislation, further legislation and regulations are expected to continue in areas such as greenhouse gas emissions control, emission disclosure requirements and building codes or other infrastructure requirements that impose energy efficiency standards.
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.
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.
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.
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, 2025, 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.
Risks Related to Taxation The Company may be a passive foreign investment company (“PFIC”) and it could be a controlled foreign corporation (“CFC”) for U.S. federal income tax purposes, which may result in adverse tax considerations for U.S. shareholders.
Risks Related to Taxation The Company has been and may be a passive foreign investment company (“PFIC”) and it could be a controlled foreign corporation (“CFC”) for U.S. federal income tax purposes, which may result in adverse tax considerations for U.S. shareholders.
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 acquire a high concentration of CFM-56-5B, CFM56-7B 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.
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. • Leverage Risk . Our Strategic Capital Initiative expects to use leverage in investments, which could materially adversely affect its ability to achieve positive rates of return on those investments.
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. • Leverage Risk . Our Strategic Capital Initiative utilizes leverage in investments, which could materially adversely affect its ability to achieve positive rates of return on those investments.
In addition, evaluating transactions for our Strategic Capital Initiative may divert the time and attention of our management from other parts of our business. • Litigation Risk . One of our subsidiaries is the general partner of the 2025 Partnership and we expect to serve as general partner of future partnerships.
In addition, evaluating transactions for our Strategic Capital Initiative may divert the time and attention of our management from other parts of our business. • Litigation Risk . One of our subsidiaries is the Servicer of the 2025 Partnership and we expect to serve as Servicer of future partnerships.
The aviation industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer. Governmental agencies throughout the world, including the Federal Aviation Administration (“FAA”) and Transport Canada, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products.
The aviation industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer. Governmental agencies throughout the world, including the Federal Aviation Administration (“FAA”), Transport Canada, and European Union Aviation Safety Agency, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products.
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.
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 and continue to create difficult operating environments for owners and operators in the aviation industry.
As a provider of products and services to the commercial aviation industry, we are greatly affected by the overall economic conditions and other trends that affect our customers and lessees in that industry, including any projected market growth that may not materialize or be sustainable.
As a provider of products and services to the commercial aviation industry, we are greatly affected by the overall economic conditions and other trends that affect our customers and lessees in that industry, 8 including any projected market growth that may not materialize or be sustainable and any lasting effects of tariffs.
When managing our Strategic Capital Initiative’s exposure to market risks, we may from time to time use hedging strategies, and if our risk management processes and systems are ineffective, we may be exposed to material unanticipated losses.
When managing our Strategic Capital Initiative’s exposure to market risks, we expect to use hedging strategies, and if our risk management processes and systems are ineffective, we may be exposed to material unanticipated losses.
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.
See “-The aviation industry has 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.
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.
We acquire a high concentration of CFM-56-5B, CFM56-7B and V2500 engines and related parts and our business and financial results could be adversely affected by sector-specific or asset-specific factors.
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 and international trade.
In addition, it could be treated as a CFC for U.S. federal income tax purposes for any given taxable year.
In addition, the Company could be treated as a CFC for U.S. federal income tax purposes for any given taxable year.
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.
Alternatively, if you are a PFIC Holder 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 with respect to our shares in excess of any distributions that we make to you, thus giving rise to so called “phantom income” and to a potential out-of-pocket tax liability.
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.
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, and increased adoption of artificial intelligence could heighten these risks.
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.
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.
In addition, we will receive management and incentive fees for the services we provide to the 2025 Partnership and expect to perform for future partnerships. If the 2025 Partnership and future partnerships are not successful, that will have an adverse affect on our results of operations and cash flows. • Regulatory Risk .
In addition, we will receive servicing fees and profit participation distributions for the services we provide to the 2025 Partnership and expect to perform for 12 future partnerships. If the 2025 Partnership and future partnerships are not successful, that will have an adverse affect on our results of operations and cash flows. • Regulatory Risk .
The success of our Aerospace Products segment is dependent upon our ability to manage our operational footprint. We currently perform maintenance, repair and exchange activities at our maintenance facilities.
The success of our Aerospace Products segment is dependent upon our ability to manage our operational footprint. We currently perform maintenance, repair and exchange activities at our maintenance facilities in the United States, Canada and Europe.
On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The first partnership under the initiative (the “2025 Partnership”) will focus on acquiring 737NG and A320ceo aircraft.
On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The first partnership under the initiative, the 2025 Partnership, focuses on acquiring 737NG and A320ceo aircraft.
Difficult market conditions may adversely affect our Strategic Capital Initiative in many ways, including by negatively impacting the 2025 Partnership and future partnerships’ ability to raise or deploy capital, lowering management fee income and incentive income, increasing the cost of financial instruments and executing transactions and adversely affecting the performance of the partnerships’ investments.
Difficult market conditions may adversely affect our Strategic Capital Initiative in many ways, including by negatively impacting the 2025 Partnership and future partnerships’ ability to raise or deploy capital, lowering servicing fees and profit participation distributions, increasing the cost of financial instruments and executing transactions and adversely affecting the performance of the partnerships’ investments.
As general partner, we may be subject to the risk of litigation by third parties, including investors in our Strategic Capital Initiative dissatisfied with our management of the Strategic Capital Initiative or the performance thereof. • Allocation and Conflicts of Interest Risk .
As Servicer, we may be subject to the risk of litigation by third parties, including investors in our Strategic Capital Initiative dissatisfied with our management of the 2025 Partnership and future partnerships or the performance thereof. • Allocation and Conflicts of Interest Risk .
We have agreed that the 2025 Partnership, and follow-on partnerships, will be the primary buyer of on-lease 737NG and A320ceo aircraft. In the future, we may agree to allocate buying opportunities for certain assets to other partnerships.
The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft. In the future, we may agree to allocate buying opportunities for certain assets to other partnerships.
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. We have agreed that the 2025 Partnership, and follow-on partnerships, will be the primary buyer of on-lease 737NG and A320ceo aircraft.
The Strategic Capital Initiative, and its related partnerships, allow us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft.
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.
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.
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.
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.
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.
We provide aircraft management services to the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services. The Company has also made a minority capital commitment and will make additional commitments in the 2025 Partnership. We expect to provide aircraft management services to, and make minority investments in, future partnerships.
In addition, there also is an increasing number of state-level anti-ESG initiatives in the U.S. that may conflict with other regulatory requirements, resulting in regulatory uncertainty.
In addition, there also is an increasing number of government policies and initiatives in the U.S. that may conflict with other regulatory requirements, resulting in regulatory uncertainty.
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.
Our board of directors has adopted the FTAI Aviation Ltd. 2025 Omnibus Incentive Plan (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, and other equity-based and non-equity based awards, to the directors, officers, employees, service providers, consultants and advisors who performed services for us, and to our directors, officers, employees, service providers, consultants and advisors.
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.
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.
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.
For any PFIC Year or taxable year of ours immediately following a PFIC Year, 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.
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.
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.
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 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.
No assurances can be given that any given shareholder will be able to make a valid QEF election with respect to us or our PFIC subsidiaries. See “U.S. Federal Income Tax Considerations —Considerations for U.S.
No assurances can be given that any given shareholder will be able to make a valid QEF election with respect to us or our PFIC subsidiaries.
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 initially reserved 5,750,000 ordinary shares for issuance under the Incentive Plan. As of December 31, 2025, rights relating to 5,738,844 of our ordinary shares were outstanding under the Incentive Plan.
As a result of these developments, the tax laws of certain countries in which we and our affiliates do business are expected to change (and could change on a retroactive basis) and certain of such changes are expected to increase our liabilities for taxes (and possibly interest and penalties) and therefore could harm our business, cash flows, results of operations and financial position.
As a result of these developments, the tax laws of certain countries in which we and our affiliates do business have increased and may further increase our liabilities for taxes (and possibly interest and penalties), which could harm our business, cash flows, results of operations and financial position.
We agreed to make a minority investments in the 2025 Partnership and expect to make minority investments in future partnerships. Our investment is subject to the risk of loss if the 2025 Partnership and future partnership do not perform well.
We made a minority capital commitment and will make additional commitments in the 2025 Partnership and expect to make minority investments in future partnerships. Our investments are subject to the risk of loss if the 2025 Partnership and future partnership do not perform well.
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 any material authorization or 9 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.
Our inability to obtain sufficient capital, or to renew or expand our credit facilities, could result in increased funding costs and would limit our ability to: • meet the terms and maturities of our existing and future debt facilities; • purchase new assets or refinance existing assets; • fund our working capital needs and maintain adequate liquidity; and • finance other growth initiatives.
Our inability to obtain sufficient capital, or to renew or expand our credit facilities, could result in increased funding costs and would limit our ability to: • meet the terms and maturities of our existing and future debt facilities; • purchase new assets or refinance existing assets; • fund our working capital needs and maintain adequate liquidity; and • finance other growth initiatives. 17 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.
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.
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.
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.
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.
The Company may be treated as a PFIC for the taxable year ended December 31, 2024, or for any subsequent taxable year, and we believe it was treated as a PFIC in the taxable years ended December 31, 2022, and December 31, 2023 (collectively, the “PFIC years”).
We believe that the Company was treated as a PFIC in the taxable years ended December 31, 2022, and December 31, 2023 (collectively with any other taxable years in which we are treated as a PFIC, the “PFIC Years”).
Furthermore, our ability to refinance would depend upon the condition of the finance and credit markets. Our inability to generate sufficient free cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms or on a timely basis, would materially affect our business, financial condition and results of operations.
Our inability to generate sufficient free cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms or on a timely basis, would materially affect our business, financial condition and results of operations. 11 Our use of joint ventures or partnerships may present unforeseen obstacles or costs.
If we are unable to satisfy such new criteria, investors may conclude that our ESG and sustainability practices are inadequate. If we fail or are perceived to have failed to achieve previously announced initiatives or goals or to accurately disclose our progress on such initiatives or goals, our reputation, business, financial condition and results of operations could be adversely impacted.
If we fail or are perceived to have 13 failed to achieve previously announced initiatives or goals or to accurately disclose our progress on such initiatives or goals, our reputation, business, financial condition and results of operations could be adversely impacted. Our assets generally require routine maintenance, and we may be exposed to unforeseen maintenance costs.
In addition, complexities arising from the Internalization could increase our overhead costs and detract from management’s ability to focus on operating our business. There can be no assurance we will be able to realize the expected cost savings of the Internalization.
In addition, complexities arising from the Internalization could increase our overhead costs and detract from management’s ability to focus on operating our business.
Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues. Our business is capital intensive, and we have used and may continue to employ leverage to finance our operations.
Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues. We have used and may continue to employ leverage to finance our operations. Accordingly, our ability to successfully execute our business strategy and maintain our operations depends on the availability and cost of debt and equity capital.
Although we currently intend to pay regular quarterly dividends to holders of our ordinary shares, we may change our dividend policy at any time. Our net cash provided by operating activities has been less than the amount of distributions to our shareholders.
While we currently intend to pay regular quarterly dividends to our shareholders, we may change our dividend policy at any time. Although we currently intend to pay regular quarterly dividends to holders of our ordinary shares, we may change our dividend policy at any time.
Upon the occurrence of an event of default under any of our debt agreements, the lenders or holders thereof could elect to declare all outstanding debt under such agreements to be immediately due and payable. We may not realize some or all of the targeted benefits of the Internalization.
Upon the occurrence of an event of default under any of our debt agreements, the lenders or holders thereof could elect to declare all outstanding debt under such agreements to be immediately due and payable. Terrorist attacks or other hostilities could negatively impact our operations and our profitability and may expose us to liability and reputational damage.
The market price of our ordinary and preferred shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our ordinary and preferred shares may fluctuate and cause significant price variations to occur.
Risks Related to Our Shares The market price and trading volume of our ordinary and preferred shares may be volatile, which could result in rapid and substantial losses for our shareholders. The market price of our ordinary and preferred shares may be highly volatile and could be subject to wide fluctuations.
Strong competition for investment opportunities could result in fewer such opportunities for us, as certain of these competitors have established and are establishing investment vehicles that target the same types of assets that we intend to purchase.
Strong competition for investment opportunities could result in fewer such opportunities for us, as certain of these competitors have established and are establishing investment vehicles that target the same types of assets that we intend to purchase. 10 Market competition for our Aerospace Products business includes engine manufacturers, engine component and parts manufacturers, airline and aircraft service companies, companies providing maintenance, repair and overhaul services and aircraft spare parts distributors and redistributors.
If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. 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.
There can be no assurance we will be able to realize the expected cost savings of the Internalization. 18 If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
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 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.
If the appraised value of such assets declines, we may be required to reduce the principal outstanding under our debt facilities or otherwise be unable to incur new borrowings. We can give no assurance that the capital we need will be available to us on favorable terms, or at all.
Additionally, our ability to borrow against our assets is dependent, in part, on the appraised value of such assets. If the appraised value of such assets declines, we may be required to reduce the principal outstanding under our debt facilities or otherwise be unable to incur new borrowings.
Numerous countries, including European Union member states, have enacted or are expected to enact minimum tax legislation, and other countries may enact such legislation in the future. Additionally, On December 27, 2023, Bermuda enacted a corporate tax regime with a 15% rate (the “Bermuda CIT”) and with requirements similar to those of the OECD’s minimum tax proposal.
Numerous countries, including European Union member states, have enacted or are expected to enact minimum tax legislation, and other countries may enact such legislation in the future.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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”).
Biggest changeTo help identify and assess risks, we 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.
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.
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.
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.
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 Information Security Steering Committee (“ISSC”), employing a risk-based methodology designed to safeguard the security, confidentiality, integrity, and availability of its information.
They help ensure that the ISSC considers best practices in its decision-making, and convenes quarterly or as needed to assess cybersecurity issues and supervise matters related to information security, fraud, vendors, data protection, and privacy risks.
They help ensure that the ISSC considers best practices in its decision-making, and convenes quarterly or as needed to assess cybersecurity issues and supervise matters related to information security, fraud, vendors, data protection, and privacy risks. The SVP of Technology and vCISO have extensive relevant knowledge and skills, and collectively bring decades of experience in the cybersecurity industry.
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 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.
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.
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 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.
The ISSC is tasked with developing an effective cyber strategy, establishing policies, and managing cyber risks within the organization. The Chief Financial Officer and General Counsel, along with the SVP of Technology and virtual Chief Information Security Officer (“vCISO”), collaborate with officers and individuals at the Company to formulate, implement, and enforce these policies.
Removed
The ISSC is tasked with developing an effective cyber strategy, establishing policies, and managing cyber risks within the organization.
Removed
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 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.
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, California, Canada, and Portugal 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.

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. 27 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. 24 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(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]
Biggest change(in whole dollars) December 31, Index 2020 2021 2022 2023 2024 2025 FTAI Aviation Ltd. $ 100.00 $ 130.30 $ 97.15 $ 273.69 $ 861.33 $ 1188.52 S&P Midcap 400 100.00 124.76 108.47 126.29 143.88 154.68 Russell 2000 100.00 114.82 91.35 106.82 119.14 134.40 Dow Jones US Aerospace 100.00 108.47 115.48 134.53 156.28 245.45 26 Item 6. [Reserved]
Nonqualified Stock Option and Incentive Award Plan, and on February 23, 2023, the Incentive Plan was amended to provide for the ability to award equity compensation awards in the form of restricted stock units in addition to the other forms of award described above.
Nonqualified Stock Option and Incentive Award Plan, and on February 23, 2023, was amended to provide for the ability to award equity compensation awards in the form of restricted stock units in addition to the other forms of award described above.
Nonqualified Stock Option and Incentive Award Plan In 2015, in connection with our IPO, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) referred to then as the Fortress Transportation and Infrastructure Investors LLC Nonqualified Stock Option and Incentive Award Plan, which provides for the ability to award equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.
Nonqualified Stock Option and Incentive Award Plan In 2015, in connection with our IPO, we established a Nonqualified Stock Option and Incentive Award Plan referred to then as the Fortress Transportation and Infrastructure Investors LLC Nonqualified Stock Option and Incentive Award Plan, which provides for the ability to award equity compensation awards in the form of stock options, stock appreciation rights, restricted stock, and performance awards to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.
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.
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, 2020 in stock and index, including reinvestment of dividends. Fiscal year ending December 31.
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.
The graph assumes an investment of $100 in our ordinary shares and in each of the indices on December 31, 2020, and that all dividends were reinvested. The past performance of our shares is not an indication of future performance.
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.
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 25, 2026, there were approximately 5 record holders of our ordinary shares.
As 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.
As of December 31, 2025 , the Incentive Plan provides for the issuance of up to 5.7 million shares. 25 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.
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.
On November 10, 2022, in connection with the Merger, the Nonqualified Stock Option and Incentive Award Plan was assumed by FTAI Aviation L td. and renamed the FTAI Aviation Ltd.
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.
On February 24, 2026, our Board of Directors declared a cash dividend on our ordinary shares of $0.40 per share for the quarter ended December 31, 2025, payable on March 23, 2026 to the holders of record on March 13, 2026.
Removed
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
On May 29, 2025, we established the 2025 Omnibus Incentive Award Plan (the “Incentive Plan”), to replace the FTAI Aviation Ltd. Nonqualified Stock Option and Incentive Award Plan.
Added
The Incentive Plan provides for the ability to award compensation awards in the form of stock options to eligible employees, consultants, directors and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

Item 6. [Reserved]

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

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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
Biggest changeConsolidated Financial Statements of FTAI Aviation Ltd.: 47 Reports of Independent Registered Public Accounting Firms 48 Consolidated Balance Sheets as of December 31, 2025 and 2024 51 Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 52 Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 53 Consolidated Statement of Changes in Equity for the years ended December 31, 2025, 2024 and 2023 54 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 55 Notes to Consolidated Financial Statements 57 Note 1: Organization 57 Note 2: Summary of Significant Accounting Policies 57 Note 3: Acquisition of Lockheed Martin Commercial Engine Solutions 65 Note 4: Acquisition of QuickTurn 67 Note 5: Leasing Equipment, net 68 Note 6: Investments 68 Note 7: Intangible Assets and Liabilities, net 69 Note 8: Debt, net 71 Note 9: Fair Value Measurements 72 Note 10: Equity-Based Compensation 80 Note 11: Income Taxes 75 Note 12: Affiliate Transactions 79 Note 13: Segment Information 81 Note 14: Earnings per Share and Equity 87 Note 15: Commitments and Contingencies 87 Note 16: Restructuring Charges 88 Note 17: Subsequent Events 88
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 6. [Reserved] 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 46 Item 8.

Item 7. Management's Discussion & Analysis

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

80 edited+33 added−66 removed41 unchanged
Biggest changeAdjusted 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.
Biggest changeAdjusted 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, 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, if any. 28 Results of Operations The following table presents our consolidated results of operations: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Revenues Aerospace products revenue $ 1,600,456 $ 1,079,821 $ 454,970 $ 520,635 $ 624,851 MRE Contract revenue 335,788 — — 335,788 — Lease income 235,210 255,338 207,936 (20,128) 47,402 Maintenance revenue 218,499 200,809 191,347 17,690 9,462 Asset sales revenue 106,945 192,176 303,141 (85,231) (110,965) Other revenue (1) 10,511 6,757 13,502 3,754 (6,745) Total revenues 2,507,409 1,734,901 1,170,896 772,508 564,005 Expenses Cost of sales 1,349,719 825,884 502,132 523,835 323,752 Operating expenses 152,541 115,861 110,163 36,680 5,698 General and administrative 9,478 14,263 13,700 (4,785) 563 Acquisition and transaction expenses 28,587 32,296 15,194 (3,709) 17,102 Management fees and incentive allocation to affiliate — 8,449 18,037 (8,449) (9,588) Internalization fee to affiliate — 300,000 — (300,000) 300,000 Depreciation and amortization 225,797 218,064 169,877 7,733 48,187 Asset impairment — 962 2,121 (962) (1,159) Gain on sale of assets, net — (18,705) — 18,705 (18,705) Total expenses 1,766,122 1,497,074 831,224 269,048 665,850 Other income (expense) Interest expense (247,751) (221,721) (161,639) (26,030) (60,082) Loss on extinguishment of debt — (17,101) — 17,101 (17,101) Equity in losses of unconsolidated entities (2) (6,818) (2,200) (1,606) (4,618) (594) Gain on sale to the 2025 Partnership 46,380 — — 46,380 — Other income 73,586 17,364 7,590 56,222 9,774 Total other expense (134,603) (223,658) (155,655) 89,055 (68,003) Income before income taxes 606,684 14,169 184,017 592,515 (169,848) Provision for (benefit from) income taxes 105,620 5,487 (59,800) 100,133 65,287 Net income 501,064 8,682 243,817 492,382 (235,135) Less: Dividends on preferred shares 17,243 32,763 31,795 (15,520) 968 Less: Loss on redemption of preferred shares 6,327 7,998 — (1,671) 7,998 Net income (loss) attributable to shareholders $ 477,494 $ (32,079) $ 212,022 $ 509,573 $ (244,101) (1) Includes servicing fees of $10,150 for the year ended December 31, 2025 from the 2025 Partnership.
Engine maintenance revenue increased by $43.2 million, driven by an increased number of engines on lease in 2024 as compared to 2023.
Engine maintenance revenue increased by $43.2 million, driven by an increased number of engines on lease in 2024 as compared to 2023.
Expenses Total expenses increased by $287.4 million, due to the following: • Internalization fee to affiliate increased by $300.0 million for the Internalization effective May 28, 2024. • Acquisition and transaction expenses increased by $11.3 million, primarily due to higher legal and other professional fees incurred for the Internalization on May 28, 2024 and the acquisition of LMCES on September 9, 2024. • Gain on sale of assets, net, increased $18.7 million due to the sale of the two vessels within the Offshore Energy business. • Management fees and incentive allocation to affiliate decreased by $9.6 million, due to a decrease in management and incentive fees to the Former Manager during 2024, with the Internalization effective May 28, 2024, as compared to fees paid during the year ended 2024 compared to 2023.
Expenses Total expenses increased by $287.4 million, due to the following: • Internalization fee to affiliate increased by $300.0 million for the Internalization effective May 28, 2024. 40 • Acquisition and transaction expenses increased by $11.3 million, primarily due to higher legal and other professional fees incurred for the Internalization on May 28, 2024 and the acquisition of LMCES on September 9, 2024. • Gain on sale of assets, net, increased $18.7 million due to the sale of the two vessels within the Offshore Energy business. • Management fees and incentive allocation to affiliate decreased by $9.6 million, due to a decrease in management and incentive fees to the Former Manager during 2024, with the Internalization effective May 28, 2024, as compared to fees paid during the year ended 2024 compared to 2023.
Expenses Total expenses decreased by $27.7 million, driven by the following: 39 • Cost of sales decreased by $69.9 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines and is in line with an overall decrease in the corresponding asset sales revenue.
Expenses Total expenses decreased by $27.7 million, driven by the following: • Cost of sales decreased by $69.9 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines and is in line with an overall decrease in the corresponding asset sales revenue.
In connection with 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) 1,866,949 ordinary shares of the Company (the “Share Consideration”); and (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.
In connection with the termination of the Management Agreement, the Company (i) paid 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) 1,866,949 ordinary shares of the Company (the “Share Consideration”); and (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.
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) 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.
As part of the termination of the Management Agreement, the Company (i) paid the Former Manager (for itself and on behalf of the Master GP, as applicable) 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; and (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.
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.
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, 2025, eight aircraft and seventeen engines were still located in Russia.
We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during various environments. This includes limiting discretionary spending across the organization and re-prioritizing our investments as necessary.
Liquidity and Capital Resources We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during various environments. This includes limiting discretionary spending across the organization and re-prioritizing our investments as necessary.
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 “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.” 41 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 and lessees, for the years ended December 31, 2025, 2024 and 2023, as well as a report of our total property, plant and equipment as of December 31, 2025 and 2024.
Other income (expense) Total other expense increased by $75.4 million, due to the following: • Interest expense increased by $60.1 million, reflecting an increase in the average debt outstanding of approximately $779.3 million, primarily due to increases in (i) the Senior Notes due 2030 of $414.1 million, issued in November 2023 (ii) Senior Notes due 2031 of $525.0 million, issued in April 2024 (iii) Senior Notes due 2032 of $466.7 million, issued in June 2024, (iv) Senior Notes due 2033 of $124.4 million, issued in October 2024, partially offset by decreases in the (v) Senior Notes due 2025 of $489.6 million, which were redeemed in April 2024, (vi) Senior Notes due 2027 of $189.8 million, which were fully redeemed in October 2024, and the (vii) Revolving Credit Facility of $70.4 million. • Loss on extinguishment of debt increased by $17.1 million, driven by the redemption of Senior Notes due 2025 and a redemption of Senior Notes due 2027. • Other income increased by $1.8 million, driven by interest income generated from the Company’s investments in money market funds. 45 (Benefit from) provision for income taxes The benefit from income taxes increased by $50.5 million.
Other income (expense) Total other expense increased by $75.4 million, due to the following: • Interest expense increased by $60.1 million, reflecting an increase in the average debt outstanding of approximately $779.3 million, primarily due to increases in (i) the Senior Notes due 2030 of $414.1 million, issued in November 2023 (ii) Senior Notes due 2031 of $525.0 million, issued in April 2024 (iii) Senior Notes due 2032 of $466.7 million, issued in June 2024, (iv) Senior Notes due 2033 of $124.4 million, issued in October 2024, partially offset by decreases in the (v) Senior Notes due 2025 of $489.6 million, which were redeemed in April 2024, (vi) Senior Notes due 2027 of $189.8 million, which were fully redeemed in October 2024, and the (vii) Revolving Credit Facility of $70.4 million. • Loss on extinguishment of debt increased by $17.1 million, driven by the redemption of Senior Notes due 2025 and a redemption of Senior Notes due 2027. • Other income increased by $1.8 million, driven by interest income generated from the Company’s investments in money market funds.
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.
Our aviation equipment was approximately 77% utilized during the three months ended December 31, 2025, 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 the Company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $87.2 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 Net income increased by $166.2 million, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $220.6 million, primarily due to the changes noted above.
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.
As of December 31, 2025, 37 of our commercial aircraft and 143 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.
On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. 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.
On December 30, 2024, the Company announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The Strategic Capital Initiative, and its related partnerships, allows the Company to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale.
Specifically, three aircraft and 14 engines were sold in 2024 as compared to 13 aircraft and 41 engines sold in 2023. 34 • Other revenue decreased by $6.7 million, primarily due to a decrease in assets with end-of-lease redelivery compensation.
Specifically, three aircraft and 14 engines were sold in 2024 as compared to 13 aircraft and 41 engines sold in 2023. • Other revenue decreased by $6.7 million, primarily due to a decrease in assets with end-of-lease redelivery compensation. During 2024, one aircraft and three engines had end-of-lease redelivery compensation, as compared to eight aircraft and four engines in 2023.
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 Net income increased by $166.2 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 Net income decreased by $81.4 million, primarily due to the changes noted above.
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.
Contractual Obligations Our material cash requirements include the following contractual and other obligations: Debt Obligations — As of December 31, 2025, we had outstanding principal and interest payment obligations of $3.5 billion and $1.2 billion, respectively, of which only interest payments of $228.8 million are due in the next twelve months.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand FTAI Aviation Ltd.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand FTAI Aviation Ltd. (the “Company,” “we,” “our” or “us”).
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.
A discussion of our cash flows for 2025 compared to 2024 is included in our Annual Report on Form 10-K for the year ended December 31, 2025 , under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
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.
Our aircraft currently have a weighted average remaining lease term of 44 months, and our engines currently on-lease have an average remaining lease term of 38 months.
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.
Aviation Leasing Segment As of December 31, 2025, in our Aviation Leasing segment, we own and manage 290 aviation assets, consisting of 47 commercial aircraft and 243 engines, including eight aircraft and seventeen engines that were still located in Russia.
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.
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, engines or for manufacturing equipment; a significant decrease in market value; adverse changes in use or condition; legal or regulatory changes; or cash flow reductions.
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, information received from third party industry sources, usage assumptions, asset lifespan for leasing equipment, and expected operating income and costs associated with operating and maintaining the manufacturing asset.
Adjusted EBITDA (Non-GAAP) Adjusted EBIT DA increased by $11.5 million, primarily due to the changes noted above.
Net loss Net loss increased by $320.0 million, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased $11.5 million, primarily due to the changes noted above.
On May 28, 2024, we entered into definitive agreements with the Former Manager and Master GP to internalize our management function. As part of the termination of the Management Agreement, we agreed to pay $150.0 million to the Former Manager.
There were no issuances of preferred shares during the years ended December 31, 2025 and 2024. On May 28, 2024, we entered into definitive agreements with the Former Manager and Master GP to internalize our management function. As part of the termination of the Management Agreement, we agreed to pay $150.0 million to the Former Manager.
We may elect to meet certain long-term liquidity requirements or to continue to pursue strategic opportunities through utilizing cash on hand, cash generated from our current operations and the issuance of securities in the future. Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required.
We may elect to meet certain long-term liquidity requirements or to continue to pursue strategic opportunities through utilizing cash on hand, cash generated from our current operations and the issuance of securities in the future.
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.
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 $(260.1) million, $(136.5) million and $163.0 million during the years ended December 31, 2025, 2024, and 2023, respectively. • During the year ended December 31, 2025, additional borrowings and total principal repayments in connection with the Revolving Credit Facility were $480.0 million and $480.0 million, respectively.
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.
Refer to Note 8, “Debt” in our “Notes to Consolidated Financial Statements” for additional information about our debt obligations. Lease Obligations — As of December 31, 2025, we had outstanding operating and finance lease obligations of $47.8 million, of which $8.8 million is due in the next twelve months.
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.
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 the year ended December 31, 2025, we declared cash dividends of $128.2 million and $17.2 million on our ordinary shares and preferred shares, respectively.
In certain acquired leases, we or the lessee may be obligated to make a payment to the other party at lease termination based on redelivery conditions stipulated at the inception of the lease.
Reimbursements made to the lessee upon the receipt of evidence of qualifying maintenance work are recorded against the maintenance deposit liability. In certain acquired leases, we or the lessee may be obligated to make a payment to the other party at lease termination based on redelivery conditions stipulated at the inception of the lease.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased $3.7 million, primarily due to the changes noted above. 46 Transactions with Affiliates and Affiliated Entities Prior to May 28, 2024, FTAI Aviation Ltd. operated under the Management Agreement with the Former Manager, and the Master GP, each an affiliate of Fortress.
Transactions with Affiliates and Affiliated Entities Former Management Agreement Prior to May 28, 2024, FTAI Aviation Ltd. operated under the Management Agreement with the Former Manager, and the Master GP, each an affiliate of Fortress.
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.
Following the Internalization, the Company no longer pays management fees or incentive distributions to the Former Manager and Master GP. Strategic Capital Initiative 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.
This increase was primarily attributable to a substantial tax benefit arising from the Internalization fee paid to the affiliate. The fee provided a favorable impact on the company's overall tax position. Net loss Net loss increased by $320.0 million, primarily due to the changes noted above.
(Benefit from) provision for income taxes The benefit from income taxes increased by $50.5 million. This increase was primarily attributable to a substantial tax benefit arising from the Internalization fee paid to the affiliate. The fee provided a favorable impact on the company's overall tax position.
In addition, 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. 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.
In addition, the Former Manager was required to continue to provide the services that were reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025.
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.
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. 27 Strategic Capital Initiative On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors.
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.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $32.7 million, primarily due to the changes noted above. 38 Corporate and Other The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Revenues Lease income $ — $ 20,927 $ 28,232 $ (20,927) $ (7,305) Other revenue 4 5,716 6,083 (5,712) (367) Total revenues 4 26,643 34,315 (26,639) (7,672) Expenses Operating expenses 80,720 56,548 51,828 24,172 4,720 General and administrative 9,478 14,263 13,700 (4,785) 563 Acquisition and transaction expenses 16,207 17,650 6,322 (1,443) 11,328 Management fees and incentive allocation to affiliate — 8,449 18,037 (8,449) (9,588) Internalization fee to affiliate — 300,000 — (300,000) 300,000 Depreciation and amortization 4,346 9,937 10,862 (5,591) (925) Gain on sale of assets, net — (18,705) — 18,705 (18,705) Total expenses 110,751 388,142 100,749 (277,391) 287,393 Other income (expense) Loss on extinguishment of debt — (17,101) — 17,101 (17,101) Interest expense (247,751) (221,721) (161,639) (26,030) (60,082) Other income (expense) 3,690 2,695 943 995 1,752 Total other expense (244,061) (236,127) (160,696) (7,934) (75,431) Loss before income taxes (354,808) (597,626) (227,130) 242,818 (370,496) (Benefit from) provision for income taxes (59,003) (49,713) 833 (9,290) (50,546) Net loss (295,805) (547,913) (227,963) 252,108 (319,950) Less: Dividends on preferred shares 17,243 32,763 31,795 (15,520) 968 Less: Loss on redemption of preferred shares 6,327 7,998 — (1,671) 7,998 Net loss attributable to shareholders $ (319,375) $ (588,674) $ (259,758) $ 269,299 $ (328,916) 39 The following table sets forth a reconciliation of net loss attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Net loss attributable to shareholders $ (319,375) $ (588,674) $ (259,758) $ 269,299 $ (328,916) Add: (Benefit from) provision for income taxes (59,003) (49,713) 833 (9,290) (50,546) Add: Equity-based compensation expense 20,091 5,113 1,076 14,978 4,037 Add: Acquisition and transaction expenses 16,207 17,650 6,322 (1,443) 11,328 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations 6,327 25,099 — (18,772) 25,099 Add: Asset impairment charges — — — — — Add: Incentive allocations — 7,456 17,116 (7,456) (9,660) Add: Depreciation and amortization expense 4,346 9,937 10,862 (5,591) (925) Add: Interest expense and dividends on preferred shares 264,994 254,484 193,434 10,510 61,050 Add: Internalization fee to affiliate — 300,000 — (300,000) 300,000 Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — — — Less: Equity in (earnings) losses of unconsolidated entities — — — — — Adjusted EBITDA (non-GAAP) $ (66,413) $ (18,648) $ (30,115) $ (47,765) $ 11,467 Comparison of the years ended December 31, 2025 and 2024 Revenues Total revenues decreased by $26.6 million, primarily due to the sale of the two vessels within the Offshore Energy business during the fourth quarter of 2024.
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.
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, 2025 5 104 109 Purchases — 28 28 Sales — (47) (47) Transfers — (43) (43) Assets at December 31, 2025 5 42 47 Engines Assets at January 1, 2025 23 289 312 Purchases — 113 113 Sales (5) (216) (221) Transfers — 39 39 Assets at December 31, 2025 18 225 243 35 The following table presents our results of operations for our Aviation Leasing segment: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Revenues Lease income $ 235,210 $ 234,411 $ 179,704 $ 799 $ 54,707 Maintenance revenue 218,499 200,809 191,347 17,690 9,462 Asset sales revenue 106,945 192,176 303,141 (85,231) (110,965) Other revenue (1) 10,507 1,041 7,419 9,466 (6,378) Total revenues 571,161 628,437 681,611 (57,276) (53,174) Expenses Cost of sales 109,351 151,977 221,852 (42,626) (69,875) Operating expenses 37,307 35,495 37,876 1,812 (2,381) Acquisition and transaction expenses 9,182 9,740 7,150 (558) 2,590 Depreciation and amortization 205,687 201,497 158,354 4,190 43,143 Asset impairment — 962 2,121 (962) (1,159) Total expenses 361,527 399,671 427,353 (38,144) (27,682) Other income (expense) Equity in (losses) earnings of unconsolidated entities 13,115 (207) (148) 13,322 (59) Gain on sale to the 2025 Partnership 46,380 — — 46,380 — Other income 64,455 14,669 1,300 49,786 13,369 Total other income 123,950 14,462 1,152 109,488 13,310 Income before income taxes 333,584 243,228 255,410 90,356 (12,182) Provision for (benefit from) income taxes 62,232 32,979 (36,193) 29,253 69,172 Net income attributable to shareholders $ 271,352 $ 210,249 $ 291,603 $ 61,103 $ (81,354) (1) Includes servicing fees of $10,150 for the year ended December 31, 2025 from the 2025 Partnership. 36 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Net income attributable to shareholders $ 271,352 $ 210,249 $ 291,603 $ 61,103 $ (81,354) Add: Provision for (benefit from) income taxes 62,232 32,979 (36,193) 29,253 69,172 Add: Equity-based compensation expense 971 584 337 387 247 Add: Acquisition and transaction expenses 9,182 9,740 7,150 (558) 2,590 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — — — — — Add: Asset impairment charges — 962 2,121 (962) (1,159) Add: Incentive allocations — — — — — Add: Depreciation and amortization expense (1) 247,529 245,464 202,118 2,065 43,346 Add: Interest expense and dividends on preferred shares — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 30,761 (123) 104 30,884 (227) Less: Equity in losses (earnings) of unconsolidated entities (13,115) 207 148 (13,322) 59 Adjusted EBITDA (non-GAAP) $ 608,912 $ 500,062 $ 467,388 $ 108,850 $ 32,674 (1) Includes the following items for the years ended December 31, 2025, 2024 and 2023: (i) depreciation expense of $205,687, $201,497 and $158,354, (ii) lease intangible amortization of $6,710, $15,597 and $15,126 and (iii) amortization for lease incentives of $35,132, $28,370 and $28,638, respectively.
Critical Accounting Estimates and Policies The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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.
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 In accounting for leasing equipment, the Company makes estimates about the expected useful lives, residual values and the fair value of acquired in-place leases and acquired maintenance liabilities (for aviation equipment).
(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.
(2) Includes the following items for the years ended December 31, 2025, 2024 and 2023: (i) net income of $16,011, net loss of $2,200 and $1,606, (ii) interest expense of $6,899 $0 and $0, (iii) depreciation and amortization expense of $10,932, $308 and $1,488, (iv) acquisition and transaction expense of $769, $0 and $428 and (v) tax benefit of $72, $0 and $0, respectively.
Expenses Total expenses increased by $406.1 million, due to the following: • Cost of sales increased by $393.6 million, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period. • Depreciation and amortization increased by $6.0 million due to the acquisitions of LMCES in Q3 2024 and QuickTurn in Q4 2023. • Operating expenses increased by $3.4 million, primarily due to the acquisition of LMCES in Q3 2024. • Acquisition and transaction expenses increased by $3.2 million, primarily driven by higher professional fees incurred in evaluating and completing strategic transactions.
Comparison of the years ended December 31, 2024 and 2023 Revenues Total Aerospace products revenue increased by $624.9 million, primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B and V2500 engine and module sales, a $28.5 million increase in parts inventory sales, and other revenues of $47.7 million from the QuickTurn and LMCES acquisitions. 34 Expenses Total expenses increased by $406.1 million, due to the following: • Cost of sales increased by $393.6 million, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period. • Depreciation and amortization increased by $6.0 million due to the acquisitions of LMCES in Q3 2024 and QuickTurn in Q4 2023. • Operating expenses increased by $3.4 million, primarily due to the acquisition of LMCES in Q3 2024. • Acquisition and transaction expenses increased by $3.2 million, primarily driven by higher professional fees incurred in evaluating and completing strategic transactions Provision for (benefit from) income taxes The Provision for income taxes increased by $46.7 million, primarily due to the benefit from income taxes recorded in 2023 in connection with a tax law change in Bermuda as well as the increase in income from Aerospace Products activities in jurisdictions subject to taxes.
The first partnership under the initiative (the “2025 Partnership”) will focus on acquiring 737NG and A320ceo aircraft. The Strategic Capital Initiative, and its related partnerships, will allow the Company to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale.
The Strategic Capital Initiative, and its related partnerships, allows us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The first partnership under the initiative (the “2025 Partnership”) focuses on acquiring 737NG and A320ceo aircraft. The 2025 Partnership completed its fundraise in October 2025 with $2.0 billion of equity commitments.
Net income (loss) from continuing operations Net income from continuing operation s decreased by $235.1 million, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITD A increased by $264.8 million, primarily due to the changes noted above.
Net income (loss) from continuing operations Net income from continuing operations decreased by $235.1 million, primarily due to the changes noted above.
Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, internalization fee and management fees and incentive compensation pursuant to the Management Agreement prior to the Internalization effective May 28, 2024.
Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, internalization fee and management fees and incentive compensation pursuant to the Management Agreement prior to the Internalization effective May 28, 2024. Additionally, Corporate and Other also includes offshore energy related assets, which consist of equipment that support offshore oil and gas activities and production.
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.
As of December 31, 2025, we had total consolidated assets of $4.4 billion and total equity of $334.2 million. 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.
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.
The following table presents our results of operations: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Revenues Aerospace products revenue $ 1,600,456 $ 1,079,821 $ 454,970 $ 520,635 $ 624,851 MRE Contract Revenue 335,788 — — 335,788 — Total Revenues 1,936,244 1,079,821 454,970 856,423 624,851 Expenses Cost of sales 1,240,368 673,907 280,280 566,461 393,627 Operating expenses 34,514 23,818 20,459 10,696 3,359 Acquisition and transaction expenses 3,198 4,906 1,722 (1,708) 3,184 Depreciation and amortization 15,764 6,630 661 9,134 5,969 Total expenses 1,293,844 709,261 303,122 584,583 406,139 Other income (expense) Equity in earnings (losses) of unconsolidated entities 2,896 (1,993) (1,458) 4,889 (535) Other income 5,441 — 5,347 5,441 (5,347) Total other income (expense) 8,337 (1,993) 3,889 10,330 (5,882) Income before income taxes 650,737 368,567 155,737 282,170 212,830 Provision for (benefit from) income taxes 102,391 22,221 (24,440) 80,170 46,661 Net income attributable to shareholders $ 548,346 $ 346,346 $ 180,177 $ 202,000 $ 166,169 33 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Year Ended December 31, Change (in thousands) 2025 2024 2023 '25 vs '24 '24 vs '23 Net income attributable to shareholders $ 548,346 $ 346,346 $ 180,177 $ 202,000 $ 166,169 Add: Provision for (benefit from) income taxes 102,391 22,221 (24,440) 80,170 46,661 Add: Equity-based compensation expense 671 309 225 362 84 Add: Acquisition and transaction expenses 3,198 4,906 1,722 (1,708) 3,184 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — — — — — Add: Asset impairment charges — — — — — Add: Incentive allocations — — — — — Add: Depreciation and amortization expense 15,764 6,630 661 9,134 5,969 Add: Interest expense and dividends on preferred shares — — — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 3,778 (1,769) 206 5,547 (1,975) Less: Equity in (earnings) losses of unconsolidated entities (2,896) 1,993 1,458 (4,889) 535 Adjusted EBITDA (non-GAAP) $ 671,252 $ 380,636 $ 160,009 $ 290,616 $ 220,627 (1) Includes the following items for the years ended December 31, 2025, 2024 and 2023: (i) net income of $2,896, net loss of $1,993 and net loss of $1,458 (ii) depreciation and amortization of $954, $224 and $1,236 (iii) acquisition and transaction expense of $0, $0, and $428 and (iv) tax benefit of $72, $0 and $0, respectively.
When performing a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its net book value. The undiscounted cash flows consist of cash flows from currently contracted leases and contracts, future projected leases, transition costs, estimated down time and estimated residual or scrap values.
When performing a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its net book value.
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.
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. • Proceeds from the sale of assets were $1,712.5 million, $969.3 million and $477.9 million during the years ended December 31, 2025, 2024, and 2023, 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.
This was partially offset by a decrease of $69.9 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines, which is in line with an overall decrease in the corresponding asset sales revenue. • Internalization fee to affiliate increased by $300.0 million relating to the Internalization effective May 28, 2024. • Depreciation and amortization increased by $48.2 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. • Acquisition and transaction expenses increased by $17.1 million, primarily due to higher professional fees incurred in evaluating and completing strategic transactions and fees associated with the Internalization and the acquisition of LMCES in Q3 2024. • Operating expenses increased by $5.7 million, primarily due to the acquisition of LMCES in Q3 2024. • Gain on sale of assets, net increased $18.7 million driven by the sale of two vessels within the Offshore Energy business during the fourth quarter of 2024. • Management fees and incentive allocation to affiliate decreased by $9.6 million, due to a decrease in management and incentive fees to the Former Manager during 2024, with the Internalization effective May 28, 2024.
This was partially offset by a decrease of $69.9 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines, which is in line with an overall decrease in the corresponding asset sales revenue. • Internalization fee to affiliate increased by $300.0 million relating to the Internalization effective May 28, 2024. • Depreciation and amortization increased by $48.2 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. • Acquisition and transaction expenses increased by $17.1 million, primarily due to higher professional fees incurred in evaluating and completing strategic transactions and fees associated with the Internalization and the acquisition of LMCES in Q3 2024. • Operating expenses increased by $5.7 million, primarily due to the acquisition of LMCES in Q3 2024. • Gain on sale of assets, net increased $18.7 million driven by the sale of two vessels within the Offshore Energy business during the fourth quarter of 2024. • Management fees and incentive allocation to affiliate decreased by $9.6 million, due to a decrease in management and incentive fees to the Former Manager during 2024, with the Internalization effective May 28, 2024. 31 Other income (expense) Total other expense increased by $68.0 million due to the following: • Interest expense increased by $60.1 million, reflecting an increase in the average debt outstanding of approximately $779.3 million, primarily due to increases in (i) the Senior Notes due 2030 of $414.1 million, issued in November 2023 (ii) Senior Notes due 2031 of $525.0 million, issued in April 2024 (iii) Senior Notes due 2032 of $466.7 million, issued in June 2024, (iv) Senior Notes due 2033 of $124.4 million, issued in October 2024, partially offset by decreases in the (v) Senior Notes due 2025 of $489.6 million, which were redeemed in April 2024, (vi) Senior Notes due 2027 of $189.8 million, which were fully redeemed in October 2024, and the (vii) Revolving Credit Facility of $70.4 million. • Loss on extinguishment of debt increased by $17.1 million, primarily due to the redemption of the Senior Notes due 2025 and Senior Notes due 2027. • Other income increased by $9.8 million, primarily driven by a $10.8 million insurance settlement received within our Aviation Leasing Segment.
In the event the total cost of maintenance events over the term of a lease is less than the cumulative maintenance payments, we are not required to return any unused or excess maintenance payments to the lessee. Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance Deposits in our Consolidated Balance Sheets.
In the event the total cost of maintenance events over the term of a lease is less than the cumulative maintenance payments, we are not required to return any unused maintenance payments to the lessee. For purchase and lease back transactions, we account for the transaction as a single arrangement.
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 .
Our two reportable segments are (i) Aerospace Products and (ii) Aviation Leasing. The Aerospace Products segment, through our maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines .
(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.
(2) Includes the following items for the years ended December 31, 2025, 2024 and 2023: (i) net income of $13,115, net loss of $207 and $148 (ii) interest expense of $6,899, $0 and $0 (iii) depreciation and amortization of $9,978, $84 and $252 and (iv) acquisition and transaction expenses of $769, $0 and $0, respectively.
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 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 $1,130.3 million, $1,526.2 million and $861.5 million during the years ended December 31, 2025, 2024, and 2023, respectively. • Distributions to shareholders, including cash dividends, were $145.4 million, $154.3 million and $151.6 million during the years ended December 31, 2025, 2024 and 2023, respectively. • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.
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.
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.
The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in contracted lease rates, residual values, economic conditions, technology, demand for a particular asset type and other factors. Recent Accounting Pronouncements Please see Note 2 to our consolidated financial statements included elsewhere in this filing for recent accounting pronouncements.
The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in contracted lease rates, residual values, economic conditions, technology, demand for a particular asset type and other factors, expected income and operating costs, maintenance and repairs, capital expenditures, and duration of the cash flows.
Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance and make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.
Adjusted EBITDA (Non-GAAP) Besides net income (loss), the chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as a key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance and make resource and allocation decisions.
Expenses Total expense s increased by $206.7 million, driven by the following: • Cost of sales increased by $253.7 million, primarily due to an increase of $170.8 million in our Aerospace Products segment, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period.
Expenses Total expenses increased by $584.6 million, due to the following: • Cost of sale s increased by $566.5 million, primarily due to increases in CFM56-5B, CFM56-7B and V2500 engine and module sales and parts inventory sales, which directly corresponds to components of increases in Aerospace products revenue over the same period. • Operating expenses increased by $10.7 million, primarily due to higher compensation and benefits expense due to the acquisition of LMCES. • Depreciation and amortization increased by $9.1 million due to the acquisition of LMCES in the third quarter of 2024.
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.
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.
All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenue. Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions.
Estimates in recognizing revenue include mean time between removal for engines on leased aircraft, projected costs for engine maintenance, and forecasted utilization, which are affected by historical usage patterns and overall industry, market and economic conditions. Significant changes to these estimates could have a material effect on the amount of revenue recognized in the period.
The Company has agreed that the 2025 Partnership, and follow-on partnerships, will be the primary buyer of on-lease 737NG and A320ceo aircraft. The Company 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.
The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft. The Company, as the Servicer, provides aircraft management services to the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services.
Actual results could differ from those estimates. Note 2 to the consolidated financial statements describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. Operating Leases — We lease equipment pursuant to operating leases.
Note 2 to the consolidated financial statements describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. Operating Leases — We lease equipment pursuant to operating leases. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals.
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.
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. In addition, other serviceable used modules and parts are sold through our exclusive partnership, which is responsible for the teardown, repair, marketing, and sales of parts from our CFM56 engine pool.
Comparison of the years ended December 31, 2024 and 2023 Revenues Total Aerospace products revenue increased by $624.9 million, primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B and V2500 engine and module sales, a $28.5 million increase in parts inventory sales, and other revenues of $47.7 million from the QuickTurn and LMCES acquisitions.
Comparison of the years ended December 31, 2025 and 2024 Revenues Total revenues increased by $856.4 million, due to the following: • Aerospace Products revenue increased by $520.6 million, primarily due to a $499.7 million increase in CFM56-5B, CFM56-7B and V2500 engine and module sales, as well as a $4.8 million increase in other maintenance service revenues. • MRE Contract revenue increased by $335.8 million, primarily due to an increase in engine and module sales made to the 2025 Partnership.
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.
The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to lessees, directly and also through its equity method investment.
Provision for (benefit from) income taxes The Provision for income taxes increased by $46.7 million, primarily due to the benefit from income taxes recorded in 2023 in connection with a tax law change in Bermuda as well as the increase in income from Aerospace Products activities in jurisdictions subject to taxes.
Provision for (benefit from) income taxes The Provision for income taxes increased by $80.2 million, primarily due to the increase in income discussed above from Aerospace Products activities in jurisdictions subject to taxes. Net income Net income increased by $202.0 million, primarily due to the changes noted above.
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.
On December 30, 2025, the Company announced the launch of FTAI Power, a platform focused on converting CFM56 engines to power turbines. In 2023, we acquired the remaining interest in Quick Turn Engine Center LLC (“QuickTurn”), a dedicated hospital maintenance and testing facility specializing in the CFM56-7B and CFM56-5B engines.
Net loss Net loss decreased by $10.3 million, primarily due to the changes noted above.
Net income Net income decreased by $61.1 million, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $108.9 million, primarily due to the changes noted above.
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.
We allocate the consideration paid based on the relative fair value of the aircraft and lease. The fair value of the lease may include a lease premium or discount, which is recorded as a favorable or unfavorable lease intangible.
Expenses Total expenses increased by $199.3 million, primarily due to the following: • Cost of sales increased by $170.8 million, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period and the gross presentation described above. • Gain on sale of assets, net decreased by $18.2 million, primarily due to t he change in presentation of asset sales recorded during 2022.
Expenses Total expenses increased by $269.0 million, driven by the following: • Cost of sales increased by $523.8 million, primarily due to increases in CFM56-5B, CFM56-7B and V2500 engine and module sales, and parts inventory sales, which directly corresponds to components of increases in Aerospace products revenue over the same period. • Operating expenses increased by $36.7 million, primarily due to higher compensation and benefits expense incurred during the current year. • Internalization fee to affiliate decreased by $300.0 million relating to the Internalization effective May 28, 2024.
The Company expects to provide aircraft management services to, and make minority investments in, future partnerships. 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. Our two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products.
The Company also made a minority capital commitment and will make additional commitments to the 2025 Partnership in the same proportion relative to additional third-party institutional investors. 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.
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.
Comparison of the years ended December 31, 2025 and 2024 Revenues Total revenues increased by $772.5 million, driven by the following: • Aerospace products revenue increased by $520.6 million, primarily due to a $499.7 million increase in CFM56-5B, CFM56-7B and V2500 engine and module sales, as well as a $4.8 million increase in other maintenance service revenues. • MRE Contract revenue increased by $335.8 million, due to engine and module sales made to the 2025 Partnership. • Asset sales revenue decreased by $85.2 million, primarily due to change in product mix of assets sold in the current period as compared to the prior period.
Other income (expense) Total other expense increased by $68.0 million due to the following: • Interest expense increased by $60.1 million, reflecting an increase in the average debt outstanding of approximately $779.3 million, primarily due to increases in (i) the Senior Notes due 2030 of $414.1 million, issued in November 2023 (ii) Senior Notes due 2031 of $525.0 million, issued in April 2024 (iii) Senior Notes due 2032 of $466.7 million, issued in June 2024, (iv) Senior Notes due 2033 of $124.4 million, issued in October 2024, partially offset by decreases in the (v) Senior Notes due 2025 of $489.6 million, which were redeemed in April 2024, (vi) Senior Notes due 2027 of $189.8 million, which were fully redeemed in October 2024, and the (vii) Revolving Credit Facility of $70.4 million. • Loss on extinguishment of debt increased by $17.1 million, primarily due to the redemption of the Senior Notes due 2025 and Senior Notes due 2027. • Other income increased by $9.8 million, primarily driven by a $10.8 million insurance settlement received within our Aviation Leasing Segment.
Other expense Total other expense increased by $89.1 million due to the following: • Other income increased by $56.2 million, primarily due to a $54.3 million insurance settlement related to aircraft and engines located in Russia. • Gain on sale to the 2025 Partnership increased by $46.4 million, primarily resulting from the sale of 45 aircraft to the 2025 Partnership within the Aviation Leasing Segment. 30 • Loss on debt extinguishment decreased by $17.1 million, driven by the 2024 redemption of Senior Notes due 2025 and Senior Notes due 2027. • Interest expense increased by $26.0 million, reflecting increases in interest expense in (i) the 7.00% Senior Notes due 2032 of $26.0 million, (ii) the 5.875% Senior Notes due 2033 of $22.7 million, and (iii) the 7.00% Senior Notes due 2031 of $13.8 million.
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 Net income decreased by $81.4 million, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $32.7 million, primarily due to the changes noted above.
Net income (loss) Net income increased by $492.4 million, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITD A increased by $328.9 million, primarily due to the changes noted above.
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.
Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased by $47.8 million, primarily due to the changes noted above. 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 also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.
Additionally, we maintain a (i) 25% equity interest in the Advanced Engine Repair joint venture, which focuses on developing innovative cost-saving programs for engine repairs, and a (ii) 50% equity interest in QuickTurn Europe, which operates as a dedicated maintenance, repair, and overhaul facility for CFM56 engines.
Historical 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.
We cannot assure if or when any such transaction will be consummated or the terms of any such transaction or related financing. 42 Historical Cash Flow The following table presents our historical cash flow from both continuing and discontinued operations: Year Ended December 31, (in thousands) 2025 2024 2023 Cash flow data: Net cash (used in) provided by operating activities $ (310,745) $ (187,956) $ 128,982 Net cash provided by (used in) investing activities 723,314 (469,498) (373,349) Net cash (used in) provided by financing activities (227,209) 681,814 282,208 Comparison of the years ended December 31, 2025 and 2024 Net cash used in operating activities increased $122.8 million, primarily reflecting an increase in our Net income of $492.4 million and certain adjustments to reconcile net income to cash used in operating activities, including an: • increase in Deferred income taxes of $75.8 million; partially offset by • decrease in Changes in net working capital of $448.1 million, • decrease in Non-cash termination fee to affiliate of $150.0 million, • increase in Gain on insurance recoveries of $54.3 million, and • increase in Gain on sale of assets to the 2025 Partnership of $46.4 million.
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.
Specifically, the number of engines sold in the prior period was higher than the current period. • Maintenance revenue increased by $17.7 million, primarily due to an increase in aircraft maintenance revenue of $18.1 million, driven by higher end-of-lease return compensation and an increase in the recognition of maintenance deposits due to aircraft redelivery, partially offset by the sale of Seed Assets to the 2025 Partnership, as well as a decrease in utilization. • Other revenue increased by $9.5 million, primarily as a result of servicing fees earned in our capacity as the Servicer to the 2025 Partnership.
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.
(Benefit from) provision for income taxes The benefit from income taxes increased by $9.3 million. The increase was mainly driven by higher corporate overhead expenses deductible for 2025 tax purposes. Net loss Net loss decreased by $252.1 million, primarily due to the changes noted above.
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.
These were partially offset by decreases in interest expense in (i) the 9.75% senior notes due 2027 of $22.3 million, and (ii) the 6.5% senior notes due 2025 of $13.0 million. • Loss on extinguishment of debt decreased by $17.1 million, driven by the 2024 redemption of Senior Notes due 2025 and Senior Notes due 2027.
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.
Comparison of the years ended December 31, 2025 and 2024 Revenues Total revenues decreased by $57.3 million, driven by the following: • Asset sales revenue decreased by $85.2 million, primarily due to change in product mix of assets sold in the current period as compared to the prior period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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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.
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.
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
As of December 31, 2025, 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. 46
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.
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.
Our borrowing agreements generally require payments based on a variable interest rate index, such as SOFR. Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our leases.
Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our leases.
Removed
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.
Added
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 Revolving Credit Facility. Certain borrowing agreements of ours require payments based on a variable interest rate index, such as SOFR.

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