What changed in this filing

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Item 1. Financial Statements

2023-10-26 compared with 2023-07-27 · 139 added, 135 removed, 842 unchanged (25% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share and per share data)

Notes June 30, 2023 December 31, 2022

Notes September 30, 2023 December 31, 2022

Cash and cash equivalents 2 $ 52,879 $ 33,565

17 unchanged sentences

2,000,000,000 shares authorized;

99,737,046 and 99,716,621 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)

100,238,075 and 99,716,621 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively)

$ 1,002 $ 997

Preferred shares ($ 0.01 par value per share;

200,000,000 shares authorized;

15,920,000 and 13,320,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)

15,920,000 and 13,320,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively)

Additional paid in capital 293,512 343,350

8 unchanged sentences

(Dollars in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Notes 2023 2022 2023 2022

14 unchanged sentences

Total expenses 246,591 209,066 724,324 624,330

Other (expense) income

Equity in (losses) earnings of unconsolidated entities 5 ( 380 ) 35 ( 1,715 ) 233

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 5 46 ( 358 ) ( 1,669 ) ( 125 )

Gain on sale of assets, net — — — 79,933

Other income 408 1,118 416 1,246

Loss on extinguishment of debt — ( 19,861 ) — ( 19,861 )

Other income (expense) 461 ( 1,038 ) 877 208

Total other income (expense) 507 ( 21,257 ) ( 792 ) 60,155

21 unchanged sentences

(Dollars in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

11 unchanged sentences

(Dollars in thousands)

Three and Six Months Ended June 30, 2023

Ordinary Shares (1)

Preferred Shares (1)

Additional Paid In Capital Accumulated Deficit Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Three and Nine Months Ended September 30, 2023

Ordinary Shares Preferred Shares Additional Paid In Capital Accumulated Deficit Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

Equity - December 31, 2022 $ 997 $ 133 $ 343,350 $ ( 325,602 ) $ 524 $ 19,402

2 unchanged sentences

Total comprehensive income — — — 84,150 — 84,150

Contributions from non-controlling interest 10 10

Issuance of ordinary shares 389 389

3 unchanged sentences

Equity-based compensation 618 618

Equity - March 31, 2023 $ 997 $ 159 $ 368,681 $ ( 296,205 ) $ 524 $ 74,156

Equity - June 30, 2023 $ 997 $ 159 $ 331,080 $ ( 241,452 ) $ 534 $ 91,318

Net income 41,307 — 41,307

1 unchanged sentence

Total comprehensive income — — — 41,307 — 41,307

Contributions from non-controlling interest 10 10

Issuance of ordinary shares 5 178 183

2 unchanged sentences

Equity-based compensation 510 510

Equity - June 30, 2023 $ 997 $ 159 $ 331,080 $ ( 241,452 ) $ 534 $ 91,318

Equity - September 30, 2023 $ 1,002 $ 159 $ 293,512 $ ( 200,145 ) $ 534 $ 95,062

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three and Six Months Ended June 30, 2022

Three and Nine Months Ended September 30, 2022

Common Shares (1)

5 unchanged sentences

Total comprehensive loss — — — ( 203,953 ) ( 142,493 ) ( 15,946 ) ( 362,392 )

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 1,187 1,187

Issuance of ordinary shares 399 399

2 unchanged sentences

Equity-based compensation 2,294 2,294

Equity - March 31, 2022 $ 992 $ 133 $ 1,372,564 $ ( 354,585 ) $ ( 251,160 ) $ ( 6,949 ) $ 760,995

Net income (loss) 18,240 ( 8,480 ) 9,760

Equity - June 30, 2022 $ 992 $ 133 $ 1,332,968 $ ( 336,345 ) $ ( 298,874 ) $ ( 9,603 ) $ 689,271

Net loss ( 16,058 ) ( 2,871 ) ( 18,929 )

Other comprehensive loss — ( 40,470 ) — ( 40,470 )

Total comprehensive income (loss) 18,240 ( 47,714 ) ( 8,480 ) ( 37,954 )

Acquisition of consolidated subsidiary 3,054 3,054

Contributions from non-controlling interest 1,187 1,187

Total comprehensive loss — — — ( 16,058 ) ( 40,470 ) ( 2,871 ) ( 59,399 )

Spin-off of FTAI Infrastructure, Inc., net of distributions ( 916,582 ) 339,344 12,817 ( 564,421 )

Settlement of equity-based compensation ( 148 ) ( 148 )

Issuance of ordinary shares 2 2

2 unchanged sentences

Equity-based compensation 329 329

Equity - June 30, 2022 $ 992 $ 133 $ 1,332,968 $ ( 336,345 ) $ ( 298,874 ) $ ( 9,603 ) $ 689,271

Equity - September 30, 2022 $ 994 $ 133 $ 376,800 $ ( 352,403 ) $ — $ 524 $ 26,048

________________________________________________

5 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

4 unchanged sentences

Security deposits and maintenance claims included in earnings ( 34,458 ) ( 31,558 )

Loss on extinguishment of debt — 19,861

Equity-based compensation 1,128 2,623

27 unchanged sentences

Proceeds from sale of property, plant and equipment — 5,289

Proceeds for deposit on sale of aircraft and engine 1,817 8,245

Receipt of deposits for sale of aircraft and engine 300 —

(Refunds) proceeds for deposit on sale of aircraft and engine ( 683 ) 7,801

Return of purchase deposits 300 —

Net cash used in investing activities $ ( 191,092 ) $ ( 268,367 )

3 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

7 unchanged sentences

Capital contributions from non-controlling interests 10 1,187

Settlement of equity-based compensation — ( 148 )

Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs 61,729 —

Cash dividends - common shares ( 59,854 ) ( 65,789 )

Dividend from spin-off of FTAI Infrastructure, net of cash transferred — 500,562

Cash dividends - ordinary shares ( 89,776 ) ( 98,584 )

Cash dividends - preferred shares ( 23,460 ) ( 20,373 )

Net cash provided by financing activities 2,674 212,097

Net cash provided by (used in) financing activities 74,140 ( 77,653 )

Net decrease in cash and cash equivalents and restricted cash ( 186 ) ( 367,319 )

49 unchanged sentences

Restricted Cash — Restricted cash consists of funds required for the Company’s investment in Quick Turn, as described in Note 5, of $ 19.5 million as of December 31, 2022.

The Company had no restricted cash as of June 30, 2023.

The Company had no restricted cash as of September 30, 2023.

Inventory — We hold aircraft engine modules, spare parts and used material inventory for trading and to support operations.

61 unchanged sentences

We attempt to limit our credit risk by performing ongoing credit evaluations.

We earned 10 % and 11 % of our revenue from one customer in the Aviation Leasing segment during the three and six months ended June 30, 2023, respectively.

No single customer accounted for greater than 10% of total revenue during the three and six months ended June 30, 2022.

As of June 30, 2023, there were three customers in the Aviation Leasing segment that represented 15 %, 14 %, and 11 % of total accounts receivable, net.

No single customer accounted for gre ater than 10% of total revenue during the three and nine months ended September 30, 2023 and September 30, 2022.

As of September 30, 2023, there was one customer in the Aviation Leasing segment that represented 17 % of total accounts receivable, net.

As of December 31, 2022, there were two customers in the Aviation Leasing segment that represented 20 % and 12 % of total accounts receivable, net.

2 unchanged sentences

Allowance for Doubtful Accounts — We determine the allowance for doubtful accounts based on our assessment of the collectability of our receivables on a customer-by-customer basis.

The allowance for doubtful accounts was $ 66.6 million and $ 65.6 million as of June 30, 2023 and December 31, 2022, respectively.

There was provision for credit losses of $ 0.6 million and a bad debt reversal of $ 0.7 million for the three months ended June 30, 2023 and 2022, respectively.

There was a provision for credit losses of $ 1.0 million and a provision for credit losses of $ 47.2 million for the six months ended June 30, 2023 and 2022, respectively, and is included in Operating expenses in the Consolidated Statements of Operations.

The allowance for doubtful accounts was $ 72.2 million and $ 65.6 million as of September 30, 2023 and December 31, 2022, respectively.

There was provision for credit losses of $ 5.6 million and a bad debt reversal of $ 0.7 million for the three months ended September 30, 2023 and 2022, respectively.

There was a provision for credit losses of $ 6.6 million and a provision for credit losses of $ 47.1 million for the nine months ended September 30, 2023 and 2022, respectively, and is included in Operating expenses in the Consolidated Statements of Operations.

Economic sanctions and export controls against Russia and Russia’s aviation industry were imposed due to its invasion of Ukraine during the first quarter of 2022.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines and our allowance for doubtful accounts at June 30, 2023 includes all accounts receivable exposure to Russian and Ukrainian customers.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines and our allowance for doubtful accounts at September 30, 2023 includes all accounts receivable exposure to Russian and Ukrainian customers.

Comprehensive Loss — Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners.

1 unchanged sentence

The cash flow impact of commodity derivatives held by our consolidated subsidiaries is recognized in Change in fair value of non-hedge derivatives in our Consolidated Statements of Cash Flows.

Other Assets— Other assets is primarily comprised of lease incentives of $ 49.4 million and $ 37.9 million, purchase deposits of $ 11.2 million and $ 6.7 million, notes receivable of $ 71.6 million and $ 49.2 million, operating lease right-of-use assets, net o f $ 2.6 million and $ 3.0 million, finance leases, net of $ 4.1 million and $ 6.4 million, maintenance right assets of $ 9.4 million and $ 6.8 million and prepaid expenses of $ 3.1 million and $ 1.9 million, as of June 30, 2023 and December 31, 2022, respectively.

Other Assets— Other assets is primarily comprised of lease incentives of $ 47.9 million and $ 37.9 million, purchase deposits of $ 10.5 million and $ 6.7 million, notes receivable of $ 85.7 million and $ 49.2 million, operating lease right-of-use assets, net of $ 2.4 million and $ 3.0 million, finance leases, net of $ 3.6 million and $ 6.4 million, maintenance right assets of $ 12.5 million and $ 6.8 million and prepaid expenses of $ 2.9 million and $ 1.9 million, as of September 30, 2023 and December 31, 2022, respectively.

Dividends— Dividends are recorded if and when declared by the Board of Directors.

For the three months ended June 30, 2023 and 2022, the Board of Directors declared cash dividends of $ 0.30 and $ 0.33 per ordinary share, respectively.

For the six months ended June 30, 2023 and 2022, the Board of Directors declared cash dividends of $ 0.60 and $ 0.66 per ordinary share, respectively.

Additionally, in the quarter ended June 30, 2023, the Board of Directors declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares and Series D Preferred Shares of $ 0.52 , $ 0.50 , $ 0.52 and $ 0.59 per share, respectively.

For both the three months ended September 30, 2023 and 2022, the Board of Directors declared cash dividends of $ 0.30 per ordinary share.

For the nine months ended September 30, 2023 and 2022, the Board of Directors declared cash dividends of $ 0.90 and $ 0.96 per ordinary share, respectively.

Additionally, in the quarter ended September 30, 2023, the Board of Directors declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares and Series D Preferred Shares of $ 0.52 , $ 0.50 , $ 0.52 and $ 0.59 per share, respectively.

FTAI AVIATION LTD.

9 unchanged sentences

Under ASC 205-20, Presentation of Financial Statements – Discontinued Operations , the spin-off met the criteria to be reported as a discontinued operation.

Therefore, FTAI Infrastructure is presented as a discontinued operation within the Company’s financial statements for the three and six months ended June 30, 2022.

Therefore, FTAI Infrastructure is presented as a discontinued operation within the Company’s financial statements for the three and nine months ended September 30, 2022.

FTAI Infrastructure is a corporation for U.S.

12 unchanged sentences

The following table presents the significant components of net loss from discontinued operations:

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2022

Three Months Ended Nine Months Ended

September 30, 2022 September 30, 2022

Total revenues $ 27,993 $ 140,009

Cost of sales 4,920 12,732

Operating expenses 12,365 92,478

4 unchanged sentences

Interest expense 2,160 15,105

Other expense 7,641 47,765

Total expenses 38,277 233,198

Equity in losses of unconsolidated entities ( 13,858 ) ( 38,069 )

Other income ( 2,124 ) ( 2,055 )

Total other expense ( 15,982 ) ( 40,124 )

Loss before income taxes ( 10,284 ) ( 93,189 )

6 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows for the six months ended June 30, 2022.

The cash flows related to discontinued operations have not been segregated, and are included in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2022.

The following table summarizes depreciation and amortization, capital expenditures, and other significant operating and investing noncash items from discontinued operations:

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Operating activities:

4 unchanged sentences

Acquisition of property, plant and equipment $ ( 129,920 )

Acquisition of business, net of cash acquired ( 3,819 )

Investment in unconsolidated entities ( 7,954 )

2 unchanged sentences

Non-cash conversion of interest in unconsolidated entities ( 21,302 )

The Company accounted for Long Ridge Terminal LLC, included in discontinued operations for the three and six months ended June 30, 2022 included above, using the equity method of accounting.

The Company accounted for Long Ridge Terminal LLC, included in discontinued operations for the three and nine months ended September 30, 2022 included above, using the equity method of accounting.

Summarized financial data for Long Ridge Terminal LLC are shown in the following table.

Three Months Ended Six Months Ended

Income Statement June 30, 2022 June 30, 2022

Total revenue $ 19,801 $ 15,043

Three Months Ended Nine Months Ended

Income Statement September 30, 2022 September 30, 2022

Total revenues $ 156 $ 15,199

Operating expenses 4,337 36,693

6 unchanged sentences

Leasing equipment, net is summarized as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Leasing equipment $ 2,448,274 $ 2,413,230

5 unchanged sentences

As a result, we recognized an impairment charge totaling $ 120.0 million, net of maintenance deposits, to write-off the entire carrying value of leasing equipment assets that we did not expect to recover from Ukraine and Russia.

As of June 30, 2023, four aircraft were still located in Ukraine and eight aircraft and seventeen engines were still located in Russia.

Additionally, we identified certain assets in our leasing equipment portfolio with indicators of impairm ent.

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 1.2 million , net of redelivery compensation during the six months ended June 30, 2023.

As of September 30, 2023, four aircraft were still located in Ukraine and eight aircraft and seventeen engines were still located in Russia.

Additionally, we identified certain assets in our leasing equipment portfolio with indicators of impairment.

As a result, w e adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 1.2 million, net of redelivery compensation during the nine months ended September 30, 2023.

Depreciation expense for leasing equipment is summarized as follows:

2 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Carrying Value

Investment Ownership Percentage June 30, 2023 December 31, 2022

Investment Ownership Percentage September 30, 2023 December 31, 2022

Advanced Engine Repair JV Equity method 25 % $ 21,543 $ 20,207

2 unchanged sentences

$ 39,868 $ 22,037

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2023 and 2022.

We did not recognize any other-than-temporary impairments for the three and nine months ended September 30, 2023 and 2022.

The following table presents our proportionate share of equity in (losses) income:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

21 unchanged sentences

Intangible assets and liabilities, net are summarized as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Intangible assets

9 unchanged sentences

Amortization of intangible assets and liabilities is as follows:

Classification in Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30,

Classification in Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Lease intangibles Lease income $ 3,726 $ 3,291 $ 11,325 $ 10,259

As of June 30, 2023, estimated net annual amortization of intangibles is as follows:

As of September 30, 2023, estimated net annual amortization of intangibles is as follows:

Remainder of 2023 3,189

5 unchanged sentences

Our debt, net is summarized as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

18 unchanged sentences

(1) Requires a quarterly commitment fee at a rate of 0.50 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(2) Includes an unamortized discount of $ 1,096 and $ 1,318 at June 30, 2023 and December 31, 2022, respectively, and an unamortized premium of $ 3,643 and $ 4,354 at June 30, 2023 and December 31, 2022, respectively.

(3) Includes an unamortized premium of $ 1,921 and $ 2,091 at June 30, 2023 and December 31, 2022, respectively.

We were in compliance with all debt covenants as of June 30, 2023.

(2) Include s an unamortized discount of $ 982 and $ 1,318 at September 30, 2023 and December 31, 2022, respectively, and an unamortized premium of $ 3,279 and $ 4,354 at September 30, 2023 and December 31, 2022, respectively.

(3) Includes an unamortized premium of $ 1,834 and $ 2,091 at September 30, 2023 and December 31, 2022, respectively.

We were in compliance with all debt covenants as of September 30, 2023.

FAIR VALUE MEASUREMENTS

15 unchanged sentences

The fair value of our bonds payable reported as Debt, net in the Consolidated Balance Sheets are presented in the table below and classified as Level 2 within the fair value hierarchy:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Senior Notes due 2025 639,633 613,152

3 unchanged sentences

The Company has contingent obligations under ASC 460, Guarantees , in connection with certain sales of aircraft on lease, which are measured at fair value.

The guarantees are valued a t $ 6.7 million and $ 3.8 million as of June 30, 2023 and December 31, 2022, respectively, and are reflected as a component of Other liabilities on the Consolidated Balance Sheets.

The guarantees are valued a t $ 7.0 million and $ 3.8 million as of September 30, 2023 and December 31, 2022, respectively, and are reflected as a component of Other liabilities on the Consolidated Balance Sheets.

The fair values of the guarantees are determined based on the estimated condition of the e ngines at the end of each lease term, the estimated cost of replacement and applicable discount rates, and are classified as Level 3.

During the six months ended June 30, 2023, the Company recorded a $ 4.9 million increase in guarantees related to the sale of seven a ircraft and a $ 1.9 million de crease related to the change in fair value, which is recorded as Asset sales revenue in the Consolidated Statements of Operations.

During the nine months ended September 30, 2023, the Company recorded a $ 4.9 million increase in guarantees related to the sale of seven a ircraft and a $ 1.7 million de crease related to the change in fair value, which is recorded as Asset sales revenue in the Consolidated Statements of Operations.

We measure the fair value of certain assets on a non-recurring basis when U.S.

5 unchanged sentences

In 2015, we established a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to grant 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.

As of June 30, 2023, the Incentive Plan provides for the issuance of up to 29.8 million shares.

As of September 30, 2023, the Incentive Plan provides for the issuance of up to 29.8 million shares.

We account for equity-based compensation expense in accordance with ASC 718 Compensation-Stock Compensation and is reported within operating expenses and general and administrative in the Consolidated Statements of Operations.

The Consolidated Statements of Operations includes the following expense related to our stock-based compensation arrangements:

Three Months Ended June 30, Six Months Ended June 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

Three Months Ended September 30, Nine Months Ended September 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

2023 2022 2023 2022

3 unchanged sentences

a 3.471 % risk-free rate, a 6.263 % dividend yield, a 37.879 % volatility and a ten-year term.

During the six months ended June 30, 2023, the Manager did not transfer any options to employees.

During the nine months ended September 30, 2023, the Manager did not transfer any options to employees.

Restricted Shares

During the six months ended June 30, 2023, we issued restricted shares of the Company to select employees of FTAI Aviation LLC (a wholly owned subsidiary of the Company) that had a grant date fair value of $ 8.8 million and vest over 4.3 years.

During the nine months ended September 30, 2023, we issued restricted shares of the Company to select employees of FTAI Aviation LLC (a wholly owned subsidiary of the Company) that had a grant date fair value of $ 8.8 million and vest over 4.3 years.

These awards are subject to continued employment, and the compensation expense is recognized ratably over the vesting periods, with 50 % of the units vesting on June 30, 2026 and the remaining units vesting on June 30, 2027.

4 unchanged sentences

The current and deferred components of the income tax provision included in the Consolidated Statements of Operations are as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

23 unchanged sentences

corporate tax rates, or being deemed to be foreign sourced and thus either not taxable or taxable at effectively lower tax rates.

As of and for the six months ended June 30, 2023, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the nine months ended September 30, 2023, we had not established a liability for uncertain tax positions as no such positions existed.

In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S.

26 unchanged sentences

The following table summarizes the management fees, income incentive allocation and capital gains incentive allocation from continuing operations:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

9 unchanged sentences

The following table summarizes our reimbursements to the Manager from continuing operations:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

13 unchanged sentences

The following table summarizes amounts due to the Manager, which are included within accounts payable and accrued liabilities in the Consolidated Balance Sheets:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Accrued management fees $ 210 $ 53

Other payables 5,354 4,688

As of June 30, 2023 and December 31, 2022, there were no receivables from the Manager.

As of September 30, 2023 and December 31, 2022 , there were no receivables from the Manager.

SEGMENT INFORMATION

As a result of the spin-off of FTAI Infrastructure effective on August 1, 2022, the Company reevaluated its 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.

2 unchanged sentences

The Aerospace Products segment develops and manufactures through a joint venture, and repairs and sells, through exclusivity arrangements, aftermarket components for aircraft engines.

The interim period discloses the reportable segments on this basis, and prior periods have been restated to reflect the change in accordance with the requirements of ASC 280, Segment Reporting .

Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, shared services costs, and management fees.

6 unchanged sentences

Historically, the CODM’s assessment of segment performance included asset information.

During the third quarter of 2022, the CODM determined that segment asset information is not a key factor in measuring performance or allocating resources.

The CODM determined that segment asset information is not a key factor in measuring performance or allocating resources.

Therefore, segment asset information is not included in the tables below as it is not provided to or reviewed by our CODM.

During the third quarter of 2022, the Company changed its measure of segment profit to include the add back of dividends on preferred shares in Adjusted EBITDA.

Prior period Adjusted EBITDA amounts and the reconciliation to net income (loss) attributable to shareholders from continuing operations have been recast to reflect this change in the measure of segment profit.

Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

1 unchanged sentence

GAAP, is the most appropriate earnings measurement with which to reconcile Adjusted EBITDA.

Adjusted EBITDA should not be considered as an

Adjusted EBITDA should not be considered as an alternative to net income (loss) attributable to shareholders as determined in accordance with U.S.

The following tables set forth certain information for each reportable segment:

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

alternative to net income (loss) attributable to shareholders as determined in accordance with U.S.

The following tables set forth certain information for each reportable segment:

For the Three Months Ended June 30, 2023

Three Months Ended June 30, 2023

For the Three Months Ended September 30, 2023

Three Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

13 unchanged sentences

Total expenses 112,812 67,481 66,298 246,591

Other income (expense)

Equity in losses of unconsolidated entities ( 35 ) ( 345 ) — ( 380 )

Equity in (losses) income of unconsolidated entities ( 108 ) 154 — 46

Other income 444 — 17 461

Total other income (expense) 373 ( 345 ) — 28

Total other income 336 154 17 507

Income (loss) from continuing operations before income taxes 60,502 39,758 ( 55,248 ) 45,012

1 unchanged sentence

Net income (loss) from continuing operations 58,170 38,627 ( 55,490 ) 41,307

Net loss from continuing operations attributable to non-controlling interests in consolidated subsidiaries — — — —

Net income (loss) from continuing operations attributable to non-controlling interests in consolidated subsidiaries — — — —

Dividends on preferred shares — — 8,334 8,334

4 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net income attributable to shareholders from continuing operations:

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

1 unchanged sentence

Non-controlling share of Adjusted EBITDA —

Equity in losses of unconsolidated entities ( 380 )

Equity in earnings of unconsolidated entities 46

Pro-rata share of Adjusted EBITDA from unconsolidated entities ( 642 )

10 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

8 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2023

Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Nine Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

21 unchanged sentences

Net income (loss) 193,279 92,223 ( 160,045 ) 125,457

Net loss attributable to non-controlling interests in consolidated subsidiaries — — — —

Net income (loss) attributable to non-controlling interests in consolidated subsidiaries — — — —

Dividends on preferred shares — — 23,460 23,460

4 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations:

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

14 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

5 unchanged sentences

Total $ 564,049 $ 260,273 $ 33,837 $ 858,159

Presented below are the contracted minimum future annual revenues to be received under existing operating leases across as of June 30, 2023:

Presented below are the contracted minimum future annual revenues to be received under existing operating leases across as of September 30, 2023:

Operating Leases

5 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended June 30, 2022

Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

1 unchanged sentence

Maintenance revenue 35,507 — — 35,507

Asset sales revenue 85,488 — — 85,488

Aerospace products revenue — 53,401 — 53,401

5 unchanged sentences

Acquisition and transaction expenses 247 15 2,586 2,848

Management fees and incentive allocation to affiliate — — 4 4

Depreciation and amortization 32,728 77 2,048 34,853

2 unchanged sentences

Total expenses 112,858 34,676 61,532 209,066

Equity in earnings (losses) of unconsolidated entities 246 ( 211 ) — 35

Gain on sale of assets, net 54,784 8,861 — 63,645

Other income 38 — 1,080 1,118

Total other income 55,068 8,650 1,080 64,798

Other expense

Equity in losses of unconsolidated entities ( 45 ) ( 313 ) — ( 358 )

Loss on extinguishment of debt — — ( 19,861 ) ( 19,861 )

Other income (expense) 42 — ( 1,080 ) ( 1,038 )

Total other expenses ( 3 ) ( 313 ) ( 20,941 ) ( 21,257 )

Income (loss) from continuing operations before income taxes 51,987 18,412 ( 70,357 ) 42

Provision for (Benefit from) income taxes 715 1,887 ( 773 ) 1,829

Provision for income taxes 926 2,586 677 4,189

Net income (loss) from continuing operations 51,061 15,826 ( 71,034 ) ( 4,147 )

6 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations:

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

1 unchanged sentence

Non-controlling share of Adjusted EBITDA —

Equity in income of unconsolidated entities 35

Equity in losses of unconsolidated entities ( 358 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities 241

10 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 250 $ — $ — $ 250

Asia 23,496 1,200 12,116 36,812

6 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2022

Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

1 unchanged sentence

Maintenance revenue 112,171 — — 112,171

Asset sales revenue 85,488 — — 85,488

Aerospace products revenue — 94,211 — 94,211

13 unchanged sentences

Gain on sale of assets, net 61,371 18,562 — 79,933

Other income 203 — 1,043 1,246

Total other income 62,372 17,997 1,043 81,412

(Loss) income before income taxes ( 46,556 ) 29,912 ( 113,453 ) ( 130,097 )

Provision for (benefit from) income taxes 1,701 1,958 ( 491 ) 3,168

Net (loss) income ( 48,257 ) 27,954 ( 112,962 ) ( 133,265 )

Net loss attributable to non-controlling interests in consolidated subsidiaries — — — —

Loss on extinguishment of debt — — ( 19,861 ) ( 19,861 )

Other income (expense) 245 — ( 37 ) 208

Total other income (expense) 62,369 17,684 ( 19,898 ) 60,155

Income (loss) before income taxes 5,431 48,324 ( 183,810 ) ( 130,055 )

Provision for income taxes 2,116 5,055 186 7,357

Net income (loss) 3,315 43,269 ( 183,996 ) ( 137,412 )

Net income (loss) attributable to non-controlling interests in consolidated subsidiaries — — — —

Dividends on preferred shares — — 20,373 20,373

Net (loss) income attributable to shareholders from continuing operations $ ( 48,257 ) $ 27,954 $ ( 126,544 ) $ ( 146,847 )

Net income (loss) attributable to shareholders from continuing operations $ 3,315 $ 43,269 $ ( 204,369 ) $ ( 157,785 )

FTAI AVIATION LTD.

2 unchanged sentences

The following table sets forth a reconciliation of Adjusted EBITDA to net loss attributable to shareholders from continuing operations:

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

14 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer, is as follows:

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

7 unchanged sentences

The following tables sets forth the geographic location of property, plant and equipment and leasing equipment, net:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Property, plant and equipment and leasing equipment, net

13 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except share and per share data) 2023 2022 2023 2022

17 unchanged sentences

________________________________________________________

(1) Three and six months ended June 30, 2022 include participating securities which can be converted into a fixed amount of our shares.

For the three months ended June 30, 2023 and 2022, 0 a nd 407,124 shares, respectively, and for the six months ended June 30, 2023 and 2022, 1,245 and 595,047 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the six months ended June 30, 2023 and 2022, we issued 18,457 and 19,811 common shares to certain directors as compensation.

(1) Three and nine months ended September 30, 2022 include participating securities which can be converted into a fixed amount of our shares.

For the three months ended September 30, 2023 and 2022, 0 a nd 326,747 shares, respectively, and for the nine months ended September 30, 2023 and 2022 , 0 and 654,693 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the nine months ended September 30, 2023 and 2022, we issued 18,457 and 19,811 common shares to certain directors as compensation.

COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company and its subsidiaries may be involved in various claims, legal proceedings, or may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications.

In the normal course of business, the Co mpany and its subsidiaries may be involved in various claims, legal proceedings, or may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications.

Within our offshore energy business, a lessee did not fulfill its obligation under its charter arrangement, therefore we are pursuing rights afforded to us under the charter and the range of potential losses against the obligation is $ 0.0 million to $ 3.3 million.

3 unchanged sentences

Under the agreements, we provide certain guarantees at the end of the lease term for the condition of the aircraft engines that were sold to the buyer.

The guarantees are valued at $ 6.7 million and $ 3.8 million as of June 30, 2023 and December 31, 2022, respectively, and are reflected as a component of Other liabilities on the Consolidated Balance Sheets.

Given variability in the condition of the engines at the end of the lease terms, which range from 4 to 10 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at June 30, 2023 was $ 34.7 million, which is not reasonably expected.

The guarantees are valued at $ 7.0 million and $ 3.8 million as of September 30, 2023 and December 31, 2022, respectively, and are reflected as a component of Other liabilities on the Consolidated Balance Sheets.

Given variability in the condition of the engines at the end of the lease terms, which range from 4 to 9 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at September 30, 2023 was $ 34.7 million, which is not reasonably expected.

SUBSEQUENT EVENTS

On July 25, 2023, our Board of Directors declared a cash dividend on our ordinary shares and eligible participating securities of $ 0.30 per share for the quarter ended June 30, 2023, payable on August 29, 2023 to the holders of record on August 14, 2023.

On October 25, 2023, our Board of Directors declared a cash dividend on our ordinary shares and eligible participating securities of $ 0.30 per share for the quarter ended September 30, 2023, payable on November 28, 2023 to the holders of record on November 14, 2023.

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Additionally, on July 25, 2023, our Board of Directors also declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares and Series D Preferred Shares of $ 0.52 , $ 0.50 , $ 0.52 and $ 0.59 per share, respectively, payable on September 15, 2023 to the holders of record on September 1, 2023.

Additionally, on October 25, 2023, our Board of Directors also declared cash dividends on the Series A Preferred Shares, Series B Preferred Shares, Series C Preferred Shares and Series D Preferred Shares of $ 0.52 , $ 0.50 , $ 0.52 and $ 0.59 per share, respectively, payable on December 15, 2023 to the holders of record on December 1, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements