What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-26 compared with 2023-02-27 · 174 added, 152 removed, 401 unchanged (45% of the section changed)

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We own, lease and sell aviation equipment.

We also develop and manufacture through a joint venture, and repair and sell, through exclusivity arrangements, aftermarket components for aircraft engines.

We also develop and manufacture through a joint venture, and repair and sell, through our maintenance facility and exclusivity arrangements, aftermarket components for aircraft engines.

Additionally, we own and lease offshore energy equipment.

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Impact of Russia’s Invasion of Ukraine

Due to Russia’s invasion of Ukraine during the first quarter of 2022, the United States, European Union, United Kingdom, and others have imposed economic sanctions and export controls against Russia and Russia’s aviation industry.

The sanctions include but are not limited to the ban on the export and sale or lease of all aircraft, engines, and equipment and on all related repair and maintenance services to Russia and Russian airlines.

We have complied, and will continue to comply, with all applicable sanctions and we have terminated the leases of all our aircraft and engines with Russian airlines.

As a result of the sanctions imposed on Russian airlines and related lease terminations, we recognized approximately $47.1 million in provision for credit losses during the year ended December 31, 2022 .

We continue to pursue efforts to remove and repossess all of our aircraft and engines from Russia and Ukraine.

As of December 31, 2022 , four aircraft and one engine were still located in Ukraine and eight aircraft and seventeen engines were still located in Russia.

We determined that it is unlikely that we will regain possession of the aircraft that had not been recovered from Ukraine and Russia during the first quarter of 2022.

As a result, we recognized an impairment charge totaling $120.0 million, net of maintenance deposits, to write-off the carrying value of leasing equipment assets that we have not recovered from Ukraine and Russia for the year ended December 31, 2022 .

Economic sanctions and export controls against Russia and Russia’s aviation industry were imposed due to its invasion of Ukraine during the three months ended March 31, 2022.

As a result of the sanctions imposed on Russian airlines, we terminated all lease agreements with Russian airlines.

We determined that it is unlikely that we will regain possession of the aircraft and engines that had not yet been recovered from Ukraine and 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, 2023, eight aircraft and seventeen engines were still located in Russia.

Our lessees are required to provide insurance coverage with respect to leased aircraft and engines, and we are named as insureds under those policies in the event of a total loss of an aircraft or engine.

We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us.

The insured value of the aircraft and engines that remain in Ukraine and Russia is approximately $274.0 million.

We are pursuing all our claims under these policies.

The insured value of the aircraft and engines that remain in Russia is approximately $210.7 million.

We intend to pursue all our claims under these policies.

However, the timing and amount of any recoveries under these policies are uncertain.

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In connection with the spin-off, the Company and the Manager assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Manager executed an amended and restated agreement.

The Company and

certain of its subsidiaries executed a new management agreement with the Manager.

The Company and certain of its subsidiaries executed a new management agreement with the Manager.

The new management agreement has an initial term of six years.

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Prior to the Merger described below, our Manager remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off.

Following the Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), pursuant to which Master GP is entitled to incentive payments on substantially similar terms as the previous arrangements.

Following the Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and

Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), pursuant to which Master GP is entitled to incentive payments on substantially similar terms as the previous arrangements.

On November 10, 2022, the Company completed the transactions set forth in the Agreement and Plan of Merger (the “Merger”) between Fortress Transportation and Infrastructure Investors LLC (“FTAI”) and FTAI Aviation Ltd.

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Operating Segments

As a result of the spin-off of FTAI Infrastructure effective 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.

Our two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products.

The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to c ustomers.

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

The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers.

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

During the fourth quarter of 2023, the Company changed the co mposition of its operating segments to include product offerings for V2500 engines within the Aerospace Products segment.

Prior periods have been restated to reflect the change in accordance with the requirements of ASC 280, Segment Reporting .

See Note 2 for additional information.

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

Additionally, Corporate and Other also includes offshore energy related assets, which consist of vessels and equipment that support offshore oil and gas activities and production which are typically subject to operating leases.

On December 27, 2017, SoftBank Group Corp.

(“SoftBank”) completed its acquisition of Fortress (the “SoftBank Merger”).

In connection with the Softbank Merger, Fortress operates within SoftBank as an independent business headquartered in New York.

On May 22, 2023, Fortress and Mubadala Investment Company, through its wholly owned asset management subsidiary Mubadala Capital (“Mubadala”), announced that they have entered into definitive agreements pursuant to which, among other things, certain members of Fortress management and affiliates of Mubadala will acquire 100% of the equity of Fortress that is currently indirectly held by SoftBank Group Corp.

(“SoftBank”).

After the closing of the transaction, Fortress will continue to operate as an independent investment manager under the Fortress brand, with autonomy over investment processes and decision making, personnel and operations.

Results of Operations

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We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.

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

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.

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Maintenance revenue 191,347 148,846 128,819 42,501 20,027

Finance lease income 440 1,747 2,260 (1,307) (513)

Asset sales revenue 303,141 183,535 — 119,606 183,535

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Equity in losses of unconsolidated entities (1,606) (369) (1,403) (1,237) 1,034

Gain (loss) on sale of assets, net 77,211 49,015 (300) 28,196 49,315

Gain on sale of assets, net — 77,211 49,015 (77,211) 28,196

Loss on extinguishment of debt — (19,859) (3,254) 19,859 (16,605)

Other income (expense) 7,590 207 (490) 7,383 697

Total other income (expense) 57,190 43,868 (9,081) 13,322 52,949

Loss from continuing operations before income taxes (105,311) (39,735) (43,394) (65,576) 3,659

Provision for (benefit from) income taxes 5,300 3,126 (4,343) 2,174 7,469

Net loss from continuing operations (110,611) (42,861) (39,051) (67,750) (3,810)

Total other income 5,984 57,190 43,868 (51,206) 13,322

Income (loss) from continuing operations before income taxes 184,017 (105,311) (39,735) 289,328 (65,576)

(Benefit from) provision for income taxes (59,800) 5,300 3,126 (65,100) 2,174

Net income (loss) from continuing operations 243,817 (110,611) (42,861) 354,428 (67,750)

Net loss from discontinued operations, net of income taxes — (101,416) (87,845) 101,416 (13,571)

Net loss (212,027) (130,706) (103,692) (81,321) (27,014)

Net loss attributable to non-controlling interest in consolidated subsidiaries:

Net income (loss) 243,817 (212,027) (130,706) 455,844 (81,321)

Net income (loss) attributable to non-controlling interest in consolidated subsidiaries:

Continuing operations — — — — —

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Dividends on preferred shares 31,795 27,164 24,758 4,631 2,406

Net loss attributable to shareholders $ (220,374) $ (128,992) $ (105,039) $ (91,382) $ (23,953)

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

Net income (loss) attributable to shareholders $ 212,022 $ (220,374) $ (128,992) $ 432,396 $ (91,382)

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

Year Ended December 31, Change

(in thousands) 2023 2022 2021 '23 vs '22 '22 vs '21

Net loss attributable to shareholders from continuing operations $ (137,775) $ (67,619) $ (56,920) $ (70,156) $ (10,699)

Provision for (benefit from) income taxes 5,300 3,126 (4,343) 2,174 7,469

Net income (loss) attributable to shareholders from continuing operations $ 212,022 $ (137,775) $ (67,619) $ 349,797 $ (70,156)

(Benefit from) provision for income taxes (59,800) 5,300 3,126 (65,100) 2,174

Equity-based compensation expense 1,638 — — 1,638 —

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(2) Includes the following items for the years ended December 31, 2023, 2022 and 2021:

(i) net loss of $(369), $(1,403) and $(1,932), and (ii) depreciation and amortization expense of $409, $200 and $0, respectively.

(i) net loss of $1,606, $369 and $1,403, (ii) depreciation and amortization expense of $1,488, $409 and $200 and (iii) acquisition and transaction expense of $428, $0 and $0, respectively.

Presentation of assets sales

During the third quarter of 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities.

As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statement of Operations for the third and fourth quarters of 2022 and are accounted for in accordance with ASC 606.

The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statement of Operations for the third and fourth quarters of 2022.

As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statement of Operations beginning in the third quarter of 2022 and is accounted for in accordance with ASC 606.

The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statement of Operations beginning in the third quarter of 2022.

Sales transactions of aircraft and engines prior to the third quarter of 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain (loss) on sale of assets, net on the Consolidated Statement of Operations, as we were previously only occasionally selling these assets.

Generally, assets sold were under leasing arrangements with customers prior to sales and are included in Leasing equipment, net, on the Consolidated Balance Sheets.

Generally, assets sold were included in Leasing equipment, net, on the Consolidated Balance Sheets.

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $372.8 million, primarily due to an increase in Asset sales revenue, Aerospace Products revenue, maintenance revenue, other revenue and lease income.

Total revenues increased $462.5 million, primarily due to an increase in Aerospace Products revenue, Asset sales revenue, maintenance revenue and lease income.

Aerospace Products revenue increased $276.5 million driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations continued to ramp-up in 2023.

See above discussion regarding presentation of asset sales.

Asset sales revenue increased $119.6 million primarily due to an increase in the sale of commercial aircraft and engines in our Aviation Leasing segment during 2023.

See above discussion regarding presentation of asset sales.

Aerospace Products revenue increased $130.2 million driven by an increase in sales relating to the CFM56-7B and CFM56-5B engines, engine modules, spare parts and used material inventory as operations continue to ramp-up in 2022.

Lease income increased $28.6 million primarily due to an increase in the number of aircraft and engines placed on lease during the year and an inc rease in the Offshore Energy business as one of our vessels was on-hire longer in 2023 compared to 2022 and at higher rates.

Maintenance revenue increased $42.5 million primarily due to the recognition of maintenance deposits due to the early redelivery of five aircraft, an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation.

Other revenue decreased $4.7 million primarily due to a decreas e in end-of-lease redelivery compensation.

Total expenses increased $122.0 million primarily due to higher (i) cost of sales, (ii) management fees and incentive allocation to affiliate and(iii) depreciation and amortization, partially offset by lower (iv) asset impairment, (v) operating expenses and (vi) interest expense.

Cost of sales increased $253.7 million primarily as a result of an increase in asset sales and Aerospace Product sales and the gross presentation of Asset sales revenue and Aerospace products revenues as described above.

Management fees and incentive allocation to affiliate increased $14.5 million primarily due to an increase in incentive fee due to the Manager driven by an increase in net income.

Depreciation and amortization increased $17.0 million primarily driven by an increase i n the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Asset impairment decreased $135.1 million primarily due t o the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.

See Note 5 to the consolidated financial statements for additional information.

Operating expenses decreased $22.1 million primarily due to:

• an decrease of $43.4 million in the Aviation Leasing segment primarily as a result of decrease in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, shipping and storage fees and repairs and maintenance expenses, partially offset by increases in insurance expenses.

• an increase of $12.8 million in the Offshore Energy business which reflects increases in offshore crew expenses, project costs and other operating expenses as our vessels were on-hire longer in 2023 compared to 2022.

• an increase of $8.5 million in the Aerospace Products segment primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in shipping and storage fees as operations continued to ramp-up in 2023.

Interest expense decreased $7.6 million, which reflects a decrease in the average outstanding debt of approximately $183.8 million primarily due to decreases in (i) the 2021 Bridge Loans of $178.3 million and (ii) the Senior Notes due 2025 of $116.7 million, which were partially redeemed in August 2022, partially offset by increases in (iii) the Revolving Credit Facility of $28.7 million and (iv) the Senior Notes due 2030 of $82.8 million, which were issued in November 2023.

Other income (expense)

Total other income decreased $51.2 million primarily due to (i) a d ecrease of $77.2 million in Gain on sale of assets, net in the Aviation Leasing and Aerospace Products segments due to the change in presentation of asset sales described above, partially offset by (ii) Loss on extinguishment of debt of $19.9 million recognized during 2022 related to the pay-down of the 2021 Bridge Loan issued in December 2021 and February 2022 and the partial redemption of Senior Notes due 2025.

(Benefit from) provision for income taxes

The benefit from income taxes increase d $65.1 million primarily due to the Company establishing a deferred tax asset of $72.2 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023.

See Note 11 to the consolidated financial statements for additional information.

Net income (loss) from continuing operations

Net income from continuing operations increased $354.4 million primarily due to the changes noted above.

Net loss from discontinued operations

Net loss from discontinued operations decreased $101.4 million for the year ended December 31, 2023, compared to the prior year as these businesses have spun off and there is no corresponding activity in the current period.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $169.2 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $372.8 million , primarily due to an increase in Asset sales revenue, Aerospace Products revenue, maintenance revenue and other revenue.

Asset sales revenue increased $183.5 million primarily due to an increase in the sale of commercial aircraft and engines in our Aviation Leasing segment during 2022.

See above discussion regarding presentation of asset sales.

Maintenance revenue increased $20.0 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft in the prior year and lower maintenance billings related to the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Other revenue increased $8.6 million primarily due primarily due to an increase in end-of lease redelivery compensation.

Lease income increased $6.8 million primarily due to an increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.

This increase was partially offset by the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Aerospace Products revenue increased $155.2 million driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations ramped up in 2022.

See above discussion regarding presentation of asset sales.

Maintenance revenue increased $20.0 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft in the prior year and lower maintenance billings from early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Other revenue increased $8.6 million primarily due to an increase in end-of lease redelivery compensation.

Lease income decreased $5.5 million primarily due to a $4.7 million decrease in the Aviation leasing segment driven by the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

Basic lease revenues from our owned aircraft and engines leased to Russian airlines was approximately $39.8 million for the year ended December 31, 2021.

This decrease is partially offset by an increase in the number of aircraft and engines placed on lease during the year.

This decrease is partially offset by an increase in the number of aircraft and engines placed on lease during the year, and a $10.1 million increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.

Total expenses increased $451.7 million primarily due to higher (i) cost of sales, (ii) asset impairment charges, (iii) operating expenses, (iv) interest expense, (v) depreciation and amortization, and (vi) management fees and incentive allocation to affiliate partially offset by lower (vii) acquisition and transaction expenses.

Cost of sales increased $234.1 million primarily as a result of an increase in asset sales and Aerospace Product sales and the gross presentation of asset sales revenue and Aerospace Product revenues as described above.

Asset impairment increased $126.8 million primarily due to the write down of aircraft and engines located in Ukraine and Russia that may not be recoverable.

Asset impairment increased $126.8 million primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.

See Note 5 to the consolidated financial statements for additional information.

Operating expenses increased $72.6 million primarily due to:

• an increase of $48.5 million in the Aviation Leasing segment primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses.

• an increase of $48.5 million in the Aviation Leasing segment primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses.

• an increase of $17.6 million in the Offshore Energy business which reflects increases in offshore crew expenses, project costs and other operating expenses as our vessels were on-hire longer in 2022 compared to 2021, as well as crane repairs on one of our vessels.

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Adjusted EBITDA increased $105.3 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2021 and 2020

Total revenues increased $37.6 million , primarily due to increases in maintenance revenue and Aerospace Products revenue, partially offset by decreases in other revenue and lease income.

Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered.

Aerospace Products revenue increased $23.3 million driven by an increase in sales relating to engine modules, spare parts and used material inventory as operations began in 2021.

Lease income decreased $5.4 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Other revenue decreased $7.1 million primarily due to lower end-of-lease redelivery compensation and the settlement of an engine loss during 2020.

Total expenses increased $86.9 million primarily due to highe r interest expense, operating expenses, cost of sales, acquisition and transaction expenses, and depreciation and amortization, partially offset by lower asset impairment charges and management fees and incentive allocation to affiliate.

Interest expense increased $67.6 million, which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which were redeemed in full in May 2021.

Operating expenses increased $19.5 million primarily as a result of an increase of bad debt expense as certain customers continued to experience liquidity issues due to the on-going effects of COVID, commissions related to sales from the used serviceable material program, shipping and storage fees, repairs and maintenance expense and other operating expenses.

Cost of sales increased $14.3 million primarily as a result of an increase in Aerospace Product revenues.

Acquisition and transaction expenses increased $8.0 million primarily due an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

Depreciation and amortization increased $6.5 million primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Asset impairment decreased $23.5 million primarily due lower asset impairment charges in 2021, which were primarily related to early lease terminations in 2020.

Management fees and incentive allocation to affiliate decreased $4.8 million which reflects a decrease in the base management fee as our average total equity was lower in 2021 compared to 2020.

Other income (expense)

Total other income increased $52.9 million primarily due to an increase of $49.3 million in gain on sale of assets, net in the Aviation Leasing and Aerospace Products segments from opportunistic asset sales transactions, partially offset by a decrease of $3.7 million in loss on extinguishment of debt.

Provision for income taxes

The provision for income taxes increased $7.5 million primarily due to higher provisions from sales in the Aviation Leasing and Aerospace Products segments.

Net loss from continuing operations

Net loss from continuing operations increased $3.8 million primarily due to the changes noted above.

Net loss from discontinued operations

Net loss from discontinued operations increased $23.2 million primarily due to:

• An increase in net loss of $21.5 million on the Jefferson business in 2021 which primarily reflects (i) a decrease in crude marketing revenue of $8.2 million due to Jefferson Terminal exiting the crude marketing strategy in 2019 and final transactions settling in the first quarter of 2020, (ii) a decrease in terminal services revenues of $6.2 million which reflects lower volumes in the first half of 2021 due to lower global oil demand related to COVID-19 and (iii) increased expenses of $7.5 million.

• An increase in net loss of $12.8 million on the Ports and Terminals business in 2021 of which $8.2 million relates to our equity pick-up in net losses for the Long Ridge investment;

• An increase in acquisition and transaction expense of $4.0 million during 2021 related to the spin-off of the infrastructure business;

• Offset by a partial year of income of $15.3 million from the Transtar business, which was acquired on July 28, 2021.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $56.4 million primarily due to the changes noted above.

Aviation Leasing Segment

As of December 31, 2022, in our Aviation Leasing segment, we own and manage 330 aviation assets, consisting of 106 commercial aircraft and 224 engine s, including four aircraft and one engine that were still located in Ukraine and eight aircraft and seventeen engines that were still located in Russia.

As of December 31, 2023, in our Avi ation Leasing segment, we own and manage 363 aviation assets, consisting of 96 commercial aircraft and 267 engines, including eight aircraft and seventeen engines that were still located in Russia.

As of December 31, 2023 , 76 of our commercial aircraft and 175 of our engines were leased to operators or other third parties.

19 unchanged sentences

Maintenance revenue 191,347 148,846 128,819 42,501 20,027

Finance lease income 440 1,747 2,260 (1,307) (513)

Asset sales revenue 303,141 183,535 — 119,606 183,535

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Other income (expense)

Equity in earnings (losses) of unconsolidated entities 740 — (1,932) 740 1,932

Gain (loss) on sale of assets, net 58,649 29,098 (300) 29,551 29,398

Equity in (losses) earnings of unconsolidated entities (148) 740 — (888) 740

Gain on sale of assets, net — 59,048 28,631 (59,048) 30,417

Other income (expense) 1,300 246 (527) 1,054 773

Total other income (expense) 59,635 28,571 (2,138) 31,064 30,709

Total other income 1,152 60,034 28,104 (58,882) 31,930

Income before income taxes 255,410 59,446 142,345 195,964 (82,899)

Provision for (benefit from) income taxes 2,502 2,073 (4,812) 429 6,885

(Benefit from) provision for income taxes (36,193) 2,502 2,073 (38,695) 429

Net income 291,603 56,944 140,272 234,659 (83,328)

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Net income attributable to shareholders $ 291,603 $ 56,944 $ 140,272 $ 234,659 $ (83,328)

Provision for (benefit from) income taxes 2,502 2,073 (4,812) 429 6,885

(Benefit from) provision for income taxes (36,193) 2,502 2,073 (38,695) 429

Equity-based compensation expense 337 — — 337 —

9 unchanged sentences

104 925 — (821) 925

Equity in (earnings) losses of unconsolidated entities (740) — 1,932 (740) (1,932)

Equity in losses (earnings) of unconsolidated entities 148 (740) — 888 (740)

Non-controlling share of Adjusted EBITDA — — — — —

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(2) Includes the following items for the years ended December 31, 2023, 2022 and 2021:

(i) net income (loss) of $740, $— and $(1,932) and (ii) depreciation and amortization of $185, $0 and $0, respectively.

(i) net (loss) income of $(148), $740 and $0 and (ii) depreciation and amortization of $252, $185 and $0, respectively.

Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $178.7 million driven by an increase in asset sales revenue, maintenance revenue and lease income, partially offset by a decrease in other revenue.

• Asset sales revenue increased $119.6 million primarily due to an increase in the sale of commercial aircraft and engines.

See above discussion regarding presentation of asset sales.

• Maintenance revenue increased $42.5 million primarily due to the recognition of maintenance deposits due to the early redelivery of five aircraft, an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation.

• Lease income increased $20.6 million primarily due to an increase in the number of aircraft and engines placed on lease during the year, partially offset by an increase in the number of aircraft and engines redelivered.

• Other revenue decreased $4.1 million primarily due to a decrease in end-of-lease redelivery compensation.

Total expenses decreased $76.2 million primarily driven by a decrease in asset impairment and operating expenses, partially offset by an increase in cost of sales, depreciation and amortization and acquisition and transaction expenses.

• Asset impairment decreased $135.1 million primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.

See Note 5 to the consolidated financial statements for additional information.

• Operating expenses decreased $43.4 million primarily as a re sult of decreases in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, shipping and storage fees and repairs and maintenance expenses, partially offset by an increase in insurance expense.

• Cost of sales increased $82.9 million primarily as a result of a n increase in asset sales and the gross presentation of asset sales revenues and related costs of sales as described above.

• Depreciation and amortization expense increased $14.1 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Acquisition and transaction expenses increased $5.2 million driven by higher compensation and related costs associated with the acquisition of aviation leasing equipment.

Other income (expense)

Total other income decreased $58.9 million primarily due to a decrease of $59.0 million in Gain on sale of assets, net due to the change in presentation of asset sales.

(Benefit from) provision for income taxes

The benefit from income taxes increased $38.7 million primarily due to the Company establishing a deferred tax asset of $46.6 million in connection with a tax law change in Bermuda , which was recorded as a benefit from income taxes during the fourth quarter of 2023.

See Note 11 to the consolidated financial statements for additional information.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $87.2 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues increased $204.8 million driven by an increase in asset sales revenue, maintenance revenue and other revenue, partially offset by a decrease in lease income.

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See above discussion regarding presentation of asset sales.

• Maintenance revenue increased $20.0 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft in the prior year and lower maintenance billings related to the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

• Maintenance revenue increased $20.0 million primarily due to an increase in the number of aircraft and engines placed on lease, higher aircraft and engine utilization and higher end-of-lease return compensation, partially offset by a decrease in the recognition of maintenance deposits due to the early redelivery of aircraft in the prior year and lower maintenance billings from the early termination of aircraft leases with Russian airlines as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

• Other revenue increased $5.9 million primarily due to an increase in end-of-lease redelivery compensation.

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• Cost of sales increased $138.9 million primarily as a result of an increase in asset sales and the gross presentation of asset sales revenues and related costs of sales as described above.

• Asset impairment increased $126.8 million primarily due to the write down of aircraft and engines located in Ukraine and Russia that may not be recoverable.

• Asset impairment increased $126.8 million primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable.

See Note 5 to the consolidated financial statements for additional information.

• Operating expenses increased $48.5 million primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses.

• Depreciation and amortization expense increased $4.6 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Total other income increased $31.1 million primarily due to (i) an increase of $29.6 million in g ain on the sale of assets, net due to more opportunistic sales transactions, (ii) a decrease of $0.8 million in other expenses and, (iii) an increase of $0.7 million in our proportionate share of unconsolidated entities’ net income.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $62.2 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2021 and 2020

Total revenues increased $16.9 million driven by an increase in maintenance revenue, partially offset by a decrease in other revenue and lease income.

• Maintenance revenue increased $27.4 million primarily due to an increase in aircraft and engine utilization due to additional travel and recoveries from COVID and the recognition of maintenance deposits due to the redelivery of aircraft, partially offset by the increase in the number of aircraft and engines redelivered.

• Other revenue decreased $5.6 million primarily due to lower end-of-lease redelivery compensation and the settlement of an engine loss during 2020 .

• Lease income decreased $4.3 million primarily due to an increase in the number of aircraft redelivered, partially offset by an increase in the number of aircraft and engines placed on lease towards the end of the year.

Total expenses decreased $11.4 million primarily driven by a decrease in asset impairment, partially offset by an increase in operating expenses and depreciation and amortization expense.

• Asset impairment decreased $23.5 million primarily due lower asset impairment charges in 2021 which were primarily related to early lease terminations due to COVID in 2020.

• Operating expenses increased $12.1 million primarily as a result of an increase in bad debt expense, shipping and storage fees, repairs and maintenance expenses and other operating expenses.

• Operating expenses increased $48.5 million primarily as a result of an increase in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, and increases in insurance expense, shipping and storage fees, professional fees, and repairs and maintenance expenses.

Total other income increased $30.7 million primarily due to an increase of $29.4 million in gain on sale of assets, net and a decrease of $1.9 million in our proportionate share of unconsolidated entities’ net loss.

Other income (expense)

Total other income increased $31.9 million primarily due to an increase of $30.4 million in G ain on the sale of assets, net due to more opportunistic sales transactions.

Adjusted EBITDA (Non-GAAP)

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Aerospace Products Segment

The Aerospace Products segment develops and manufactures through a joint venture , repairs and sells, through our maintenance facility and exclusivity arrangements, aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines.

Our engine and module sales are facilitated through The Module Factory, a dedicated commercial maintenance program, designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines, performed by a third party.

Used serviceable material is sold through our exclusive partnership with AAR Corp, who is responsible for the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool.

In December 2023, we acquired the remaining interest in Quick Turn Engine Center LLC or “QuickTurn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine.

Refer to Note 4 “Acquisition of QuickTurn”, for additional information.

We also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.

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Gain on sale of assets, net — 18,163 20,384 (18,163) (2,221)

Other income 5,347 — — 5,347 —

Total other income 3,889 17,054 18,981 (13,165) (1,927)

Income before income taxes 155,737 73,620 22,479 82,117 51,141

Provision for income taxes 2,961 1,135 — 1,826 1,135

(Benefit from) provision for income taxes (24,440) 2,961 1,135 (27,401) 1,826

Net income 180,177 70,659 21,344 109,518 49,315

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Net income attributable to shareholders $ 180,177 $ 70,659 $ 21,344 $ 109,518 $ 49,315

Provision for income taxes 2,961 1,135 — 1,826 1,135

(Benefit from) provision for income taxes (24,440) 2,961 1,135 (27,401) 1,826

Equity-based compensation expense 225 — — 225 —

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(1) Includes the following items for the years ended December 31, 2023, 2022 and 2021:

(i) net loss of $(1,109), $(1,403) and $0 and (ii) depreciation and amortization of $224, $200 and $0, respectively.

(i) net loss of $ 1,458 , $1,109 and $1,403 (ii) depreciation and amortization of $1,236 , $224 and $200 and (iii) acquisition and transaction expense of $428, $0, $0, respectively.

Comparison of the years ended December 31, 2023 and 2022

Total Aerospace Products revenue increased $130.2 million primarily driven by an increase in sales relating to the CFM56-7B and CFM56-5B engines, engine modules, spare parts and used material inventory as operations continued to ramp-up in 2022.

Total Aerospace Products revenue increased $276.5 million primarily driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations continued to ramp-up in 2023.

See above discussion regarding presentation of asset sales.

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• Cost of sales increased $170.8 million primarily as a result of an increase in Aerospace Product sales and the gross presentation described above.

• Operating expenses increased $6.5 million primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in professional fees and other operating expenses due to the ramp-up of Aerospace Products.

• Operating expenses increased $8.5 million primarily due to an increase in commission expenses due to the increase in sales from the used material program as well as an increase in shipping and storage fees as operations continued to ramp-up in 2023.

Other income (expense)

Total other income decreased $1.1 million which primarily reflects a decrease of $1.4 million in gain on sale of assets, net partially offset by a decrease of $0.3 million in our proportionate share of unconsolidated entities’ net loss.

Total other income decreased $13.2 million which primarily reflects a decrease of $18.2 million in Gain on sale of assets, net, partially offset by an increase of $5.3 million in gain on consolidation of investment in connection with the QuickTurn acquisition, and an increase of $0.3 million in our proportionate share of unconsolidated entities’ net loss.

See above discussion regarding presentation of asset sales.

(Benefit from) provision for income taxes

The benefit from income taxes increase d $27.4 million primarily due to the Company establishing a deferred tax asset of $25.6 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023.

See Note 11 to the consolidated financial statements for additional information.

Adjusted EBITDA (Non-GAAP)

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Comparison of the years ended December 31, 2022 and 2021

Total Aerospace Products revenue increased $23.3 million primarily driven by an increase in sales relating to engine modules, spare parts and used material inventory as operations began in 2021.

Total Aerospace Products revenue increased $155.2 million primarily driven by an increase in sales relating to the CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory as operations ramped up in 2022.

See above discussion regarding presentation of asset sales.

Total expenses increased $102.1 million primarily due to an increase in costs of sales and operating expenses.

• Cost of sales increased $14.3 million primarily as a result of an increase in Aerospace Product sales.

• Operating expenses increased $5.4 million primarily due to an increase in commission expenses due to the increase in sales from the used serviceable material program as well as an increase in professional fees and other operating expenses due to the ramp-up of Aerospace Products.

• Cost of sales increased $95.2 million primarily as a result of an increase in Aerospace Product sales and the gross presentation described above.

Other income (expense)

Total other income increased $18.5 million, which primarily reflects an increase of $19.9 million in gain on sale of assets, net from sales that began in 2021 partially offset by an increase of $1.4 million i n our proportionate share of unconsolidated entities’ net loss.

Total other income decreased $1.9 million, which primarily reflects a decrease of $2.2 million in Gain on sale of assets, net.

See above discussion regarding presentation of asset sales.

Adjusted EBITDA (Non-GAAP)

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Total expenses 262,388 245,427 215,503 16,961 29,924

Other (expense) income

Other income (expense)

Loss on extinguishment of debt — (19,859) (3,254) 19,859 (16,605)

Other (expense) income (39) 37 — (76) 37

Total other expense (19,898) (3,217) (6,943) (16,681) 3,726

Other income (expense) 943 (39) 37 982 (76)

Total other income (expense) 943 (19,898) (3,217) 20,841 (16,681)

Loss before income taxes (227,130) (238,377) (204,559) 11,247 (33,818)

(Benefit from) provision for income taxes (163) (82) 469 (81) (551)

Provision for (benefit from) income taxes 833 (163) (82) 996 (81)

Net loss (227,963) (238,214) (204,477) 10,251 (33,737)

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Net loss attributable to shareholders from continuing operations $ (259,758) $ (265,378) $ (229,235) $ 5,620 $ (36,143)

(Benefit from) provision for income taxes (163) (82) 469 (81) (551)

Provision for (benefit from) income taxes 833 (163) (82) 996 (81)

Equity-based compensation expense 1,076 — — 1,076 —

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Comparison of the years ended December 31, 2023 and 2022

Total revenues increased $12.8 million primarily due to an increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.

Total revenues increased $7.4 million primarily due to an increase in the Offshore Energy business, as one of our vessels was on-hire longer in 2023 compared to 2022, and at higher rates.

Total expenses increased $17.0 million primarily due to higher management fees and incentive allocation to affiliate, operating expenses, depreciation and amortization, partially offset by lower interest expense and lower acquisition and transaction expenses.

• Management fees and incentive allocation to affiliate increased $14.5 million primarily due to an increase in incentive fee due to the Manager driven by an increase in net income.

• Operating expenses increased $12.8 million which reflects increases in offshore crew expenses, project costs and other operating expenses for one of our vessels driven by increased cost of operations based on the operating location of the vessel, as well as increased number of days on-hire.

Additionally, repairs and maintenance expense increased due to repairs on one of our vessels.

• Depreciation and amortization increased $2.5 million primarily due to new assets being placed into service in the Offshore Energy business.

• Interest expense decreased $7.6 million, which reflects a decrease in the average outstanding debt of approximately $183.8 million primarily due to decreases in (i) the 2021 Bridge Loans of $178.3 million and (ii) the Senior Notes due 2025 of $116.7 million, which were partially redeemed in August 2022, partially offset by increases in (iii) the Revolving Credit Facility of $28.7 million and (iv) the Senior Notes due 2030 of $82.8 million, which were issued in November 2023.

• Acquisition and transaction expenses decreased $4.7 million primarily due to lower professional fees related to strategic transactions.

Other income (expense)

Total other expense decreased $20.8 million which primarily reflects $19.9 million decrease in loss on extinguishment of debt primarily related to the 2022 pay-down of the 2021 Bridge Loans and the partial redemption of the Senior Notes due 2025.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $3.7 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2022 and 2021

Total revenues in creased $12.8 million primarily due to an increase in the Offshore Energy business as two of our vessels were on-hire longer in 2022 compared to 2021.

Total expenses increased $29.9 million primarily due to higher interest expense, operating expenses, management fees and incentive allocation to affiliate partially offset by lower acquisition and transaction expenses.

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• Management fees and incentive allocation to affiliate increased $2.9 million primarily due to an increase in incentive fee due to the Manager.

• Acquisition and transaction expenses decreased $5.9 million primarily due a decrease in professional fees related to the Transtar acquisition in 2021.

Other expense

Total other expense increased $16.7 million which primarily reflects $16.6 million increase in loss on extinguishment of debt primarily related to the pay-down of the 2021 Bridge Loans and the partial redemption of the Senior Notes due 2025.

• Acquisition and transaction expenses decreased $5.9 million primarily due to a decrease in professional fees related to the Transtar acquisition in 2021.

Other income (expense)

Total other expense increased $16.7 million which primarily reflects a $16.6 million increase in loss on extinguishment of debt primarily related to the 2022 pay-down of the 2021 Bridge Loans and the partial redemption of the Senior Notes due 2025.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $5.0 million primarily due to the changes noted above.

Comparison of the years ended December 31, 2021 and 2020

Total revenues de creased $2.6 million primarily due to a decrease in the Offshore Energy business as one of our vessels was on-hire longer in 2020 compared to 2021.

Total expenses increased $78.5 million primarily due to higher interest expense and acquisition and transaction expenses, partially offset by lower management fees and incentive allocation to affiliate.

• Interest expense increased $67.6 million , which reflects an increase in the average outstanding debt of approximately $724.0 million primarily due to increases in (i) the Senior Notes due 2028 of $542.5 million, (ii) the Senior Notes due 2025 of $373.1 million, (iii) the Senior Notes due 2027 of $200.0 million, (iv) the Bridge Loans of $108.3 million and (v) the Revolving Credit Facility of $37.9 million, partially offset by a decrease in (vi) the Senior Notes due 2022 of $540.2 million, which were redeemed in full in May 2021.

• Acquisition and transaction expenses increased $13.7 million primarily d ue an increase in professional fees related to the acquisition of Transtar and other strategic initiatives.

• Management fees and incentive allocation to affiliate decreased $4.8 million which reflects a decrease in the base management fee as our average total equity was lower in 2021 compared to 2020.

Other expense

Total other expense decreased $3.7 million which primarily reflects a $3.7 million decrease in loss on extinguishment of debt.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $0.9 million primarily due to the changes noted above.

Transactions with Affiliates and Affiliated Entities

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Liquidity and Capital Resources

In April 2022, the Board of Directors unanimously approved the spin-off of FTAI Infrastructure.

The spin-off was effected as a distribution of all of the shares owned by the Company of common stock of FTAI Infrastructure to the holders of the Company’s ordinary shares as of July 21, 2022.

The distribution was completed on August 1, 2022.

In connection with the spin-off, completed on August 1, 2022, FTAI Infrastructure paid a dividend of $730.3 million to the Company.

The Company used these proceeds to repay all outstanding borrowings under its 2021 bridge loans, $200.0 million of its 6.50% senior unsecured notes due 2025, and approximately $175.0 million of the outstanding borrowings under its revolving credit facility.

FTAI retained the aviation business and certain other assets, and FTAI’s remaining outstanding corporate indebtedness.

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 these uncertain times.

This includes limiting discretionary spending across the organization and re-prioritizing our investments amid the COVID-19 pandemic and market volatility.

On November 21, 2023, we issued $500 million aggregate principal amount of 2030 Notes.

We used a portion of the proceeds to repay $250 million of outstanding borrowings under the Revolving Credit Facility, and used the remaining proceeds for general corporate purposes, and the funding of acquisitions and investments.

This includes limiting discretionary spending across the organization and re-prioritizing our investments as necessary.

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 $831.5 million, $1.5 billion and $597.5 million during the years ended December 31, 2022, 2021, and 2020, respectively.

• Cash used for the purpose of making investments was $861.5 million, $831.5 million and $1.5 billion during the years ended December 31, 2023, 2022, and 2021, respectively.

• Distributions to shareholders, including cash dividends, were $151.6 million, $155.6 million and $142.8 million during the years ended December 31, 2023, 2022 and 2021, respectively.

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• Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $163.0 million, $29.4 million and $16.9 million during the years ended December 31, 2023, 2022, and 2021, respectively.

• During the year ended December 31, 2023, additional borrowings were obtained in connection with the (i) Revolving Credit Facility of $455.0 million and (ii) Senior Notes Due 2030 of $500.0 million.

We made total principal repayments of $605.0 million relating to the Revolving Credit Facility.

During the year ended December 31, 2022 , additional borrowings were obtained in connection with the (i) 2021 Bridge Loans of $239.5 million (ii) Revolving Credit Facility of $565.0 million and (iii) EB-5 Loan Agreement of $9.5 million.

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We made principal payments of $1.6 billion related to the Bridge Loan Agreement, Revolving Credit Facility and Senior Notes due 2022.

During the year ended December 31, 2020, additional borrowings were obtained in connection with the (i) Senior Notes due 2025 of $407.0 million, (ii) Senior Notes due 2027 of $400.0 million, (iii) Revolving Credit Facility of $270.0 million and (iv) Series 2020 Bonds of $264.0 million.

We made principal payments of $852.2 million related to the Senior Notes due 2022, Revolving Credit Facility, Series 2016 Bonds, Jefferson Revolver, Series 2012 Bonds and FTAI Pride Credit Agreement.

• Proceeds from the sale of subsidiaries and assets were $414.2 million, $163.4 million and $72.2 million during the years ended December 31, 2022, 2021, and 2020, respectively.

• Proceeds from the sale of assets were $477.9 million, $414.2 million and $163.4 million during the years ended December 31, 2023, 2022, and 2021, respectively.

• Proceeds from the issuance of ordinary shares, net of issuance costs were $323.1 million during the year ended December 31, 2021.

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• Proceeds from the issuance of preferred shares, net of underwriters discount and issuance costs, were $61.7 million and $101.2 million during the years ended December 31, 2023 and 2021, respectively.

We are currently evaluating several potential transactions and related financings, which could occur within the next 12 months.

There were no issuances of preferred shares during the year ended December 31, 2022.

We are currently evaluating several potential transactions and related financings, including, but not limited to, certain additional debt and equity financings, which could occur within the next 12 months.

None of these potential transactions, negotiations, or financings are definitive or included within our planned liquidity needs.

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Cash flow data:

Net cash (used in) provided by operating activities $ (20,657) $ (22,044) $ 63,106

Net cash used in operating activities $ 128,982 $ (20,657) $ (22,044)

Net cash used in investing activities (373,349) (411,253) (1,286,958)

1 unchanged sentence

Comparison of the years ended December 31, 2023 and 2022

Net cash used in operating activities decreased $1.4 million, which primarily reflects certain adjustments to reconcile net loss to cash used in operating activities including increases in (i) asset impairment of $126.8 million, (ii) provision for credit losses of $35.0 million, (iii) equity in losses of unconsolidated entities of $34.2 million and (iv) loss on extinguishment of debt of $16.6 million partially offset by (v) an increase in gain on sale of assets of $92.6 million, (vi) an increase in our net loss of $81.3 million, and (vii) a decrease in net working capital of $35.3 million.

Net cash used in investing activities decreased $875.7 million primarily due to (i) a decrease in cash used in acquisitions of business, net of cash acquired, of $623.3 million, (ii) higher proceeds from the sale of leasing equipment of $250.0 million and (iii) a decrease in investment of unconsolidated entities of $47.3 million, partially offset by (iv) an increase in acquisition of leasing equipment of $65.7 million and (ii) an increase in acquisition of lease intangibles of $7.1 million.

Net cash provided by financing activities decreased $1.5 billion primarily due to (i) a decrease in proceeds from debt of $2.1 billion and (ii) a decrease in proceeds from issuance of ordinary shares, net of underwriter's discount of $323.1 million, partially offset by (iii) a one-time dividend from spin-off of FTAI Infrastructure, net of cash transferred of $500.6 million and (iv) a decrease in repayments of debt of $408.7 million.

Net cash used in operating activities decreased $149.6 million, which primarily reflects (i) a decrease in our Net loss of $455.8 million and (ii) Changes in working capital of $52.8 million, partially offset by certain adjustments to reconcile net income to cash used in operating activities including decreases in (i) Asset impairment of $135.1 million, (ii) Equity in losses of unconsolidated entities of $45.4 million, (iii) Provision for credit losses of $41.4 million, (iv) Depreciation and amortization of $23.4 million, (v) Loss on extinguishment of debt of $19.9 million, and (vi) an increase in gain on sale of assets of $19.1 million.

Net cash used in investing activities decreased $37.9 million primarily due to (i) a decrease in Acquisition of property, plant and equipment of $138.0 million and (ii) higher Proceeds from the sale of leasing equipment of $68.9 million, partially offset by increases in (i) Acquisition of leasing equipment of $111.5 million, (ii) Acquisition of business, net of cash acquired, of $25.8 million, (iii) Purchase deposit for acquisitions of $17.3 million, and (iv) Investment of unconsolidated entities of $12.2 million.

Net cash provided by financing activities increased $237.3 million primarily due to (i) a decrease in Repayment of debt of $539.5 million, (ii) an increase in Proceeds from debt of $137.7 million and (iii) an increase in Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs of $61.7 million, partially offset by a decrease in the one-time Dividend from spin-off of FTAI Infrastructure, net of cash transferred of $500.6 million.

Cash Flows of Discontinued Operations

The cash flows related to discontinued operations have not been segregated and are included in the Consolidated Statements of Cash Flows for all periods presented.

Cash used in operating activities from discontinued operations were $63.9 million, $61.7 million, and $46.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Cash used in investing activities from discontinued operations were $136.3 million, $828.7 million, and $252.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Cash used in operating activities from discontinued operations were $63.9 million, and $61.7 million for the years ended December 31, 2022 and 2021, respectively.

Cash used in investing activities from discontinued operations were $136.3 million, and $828.7 million for the years ended December 31, 2022 and 2021, respectively.

The absence of cash flows from discontinued operations is not expected to adversely affect our liquidity or our ability to fund capital expenditures or working capital needs.

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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 2022, we declared cash dividends of $128.5 million and $27.2 million on our ordinary shares and preferred shares, respectively.

During 2023, we declared cash dividends of $119.8 million and $31.8 million o n our ordinary shares and preferred shares, respectively.

We expect to meet our future short-term liquidity requirements through cash on hand, unused borrowing capacity or future financings and net cash provided by our current operations.

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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.

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.

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See Note 10 for additional information.

Aerospace Products revenue —Aerospace Products revenue primarily consists of the transaction price related to the sale of repaired CFM56-7B and CFM56-5B engines, engine modules, spare parts and used material inventory, and are accounted for within the scope of ASC 606.

Aerospace Products revenue —Aerospace Products revenue primarily consists of the transaction price related to the sale of repaired CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory, and are accounted for within the scope of ASC 606.

Revenue is recognized when a performance obligation is satisfied by transferring control over the related asset to a customer.

Revenue is recorded with corresponding costs of sales, presented on a gross basis in the Consolidated Statements of Operations.

Shipping costs to deliver assets to customers are included in cost of sales.

Aerospace products revenue also consists of engine management service contracts, where the Company has a stand-ready obligation to provide replacement CFM56-7B and CFM56-5B engines to customers as they become unserviceable during the contract term.

The Company recognizes revenue over time using a straight-line attribution method and the costs related to fulfilling the performance obligation are expensed as incurred.

Maintenance Payments —Typically, under an operating lease of aircraft, the lessee is responsible for performing all maintenance and is generally required to make maintenance payments to us for heavy maintenance, overhaul or replacement of certain high-value components of the aircraft or engine.

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10% of new build cost

Buildings and improvements 40 to 50 years

Scrap value at end of useful life

Machinery and equipment 6 - 23 years

Scrap value at end of useful life

Furniture and fixtures 3 - 6 years from date of purchase

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Construction in progress N/A N/A

Other 5 - 7 years

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.

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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-K

Item 7. Management’s Discussion and Analysis