What changed in this filing

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Item 1. Financial Statements

2024-04-26 compared with 2023-10-26 · 271 added, 486 removed, 495 unchanged (60% of the section changed)

3 unchanged sentences

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

Notes September 30, 2023 December 31, 2022

Notes March 31, 2024 December 31, 2023

Cash and cash equivalents 2 $ 65,224 $ 90,756

5 unchanged sentences

Intangible assets, net 6 46,583 50,590

Goodwill 3 4,630 4,630

Inventory, net 2 345,470 316,637

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2,000,000,000 shares authorized;

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

100,245,905 and 100,245,905 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)

$ 1,002 $ 1,002

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200,000,000 shares authorized;

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

15,920,000 and 15,920,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)

Additional paid in capital 218,074 255,973

8 unchanged sentences

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

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

Three Months Ended March 31,

Notes 2024 2023

14 unchanged sentences

Total expenses 281,467 259,968

Other income (expense)

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

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

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

Income (loss) from continuing operations before income taxes 45,012 42 133,043 ( 130,055 )

Other (expense) income

Equity in losses of unconsolidated entities 5 ( 667 ) ( 1,335 )

Other income 634 8

Total other expense ( 33 ) ( 1,327 )

Income before income taxes 45,194 31,423

Provision for income taxes 10 5,572 2,026

Net income (loss) from continuing operations 41,307 ( 4,147 ) 125,457 ( 137,412 )

Net loss from discontinued operations, net of income taxes 3 — ( 14,782 ) — ( 101,416 )

Net income (loss) 41,307 ( 18,929 ) 125,457 ( 238,828 )

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

Continuing operations — — — —

Discontinued operations — ( 2,871 ) — ( 18,817 )

Net income 39,622 29,397

Dividends on preferred shares 8,335 6,791

Net income (loss) attributable to shareholders $ 32,973 $ ( 22,849 ) $ 101,997 $ ( 240,384 )

Earnings (loss) per share:

Continuing operations $ 0.33 $ ( 0.11 ) $ 1.02 $ ( 1.59 )

Discontinued operations $ — $ ( 0.12 ) $ — $ ( 0.83 )

Continuing operations $ 0.33 $ ( 0.11 ) $ 1.02 $ ( 1.59 )

Discontinued operations $ — $ ( 0.12 ) $ — $ ( 0.83 )

Net income attributable to shareholders $ 31,287 $ 22,606

Earnings per share:

Basic $ 0.31 $ 0.23

Diluted $ 0.31 $ 0.22

Weighted average shares outstanding:

3 unchanged sentences

FTAI AVIATION LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

(Dollars in thousands)

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

2023 2022 2023 2022

Net income (loss) $ 41,307 $ ( 18,929 ) $ 125,457 $ ( 238,828 )

Other comprehensive loss:

Other comprehensive loss related to equity method investees, net in discontinued operations — ( 40,470 ) — ( 182,963 )

Comprehensive income (loss) 41,307 ( 59,399 ) 125,457 ( 421,791 )

Comprehensive loss attributable to non-controlling interest:

Continuing operations — — — —

Discontinued operations — ( 2,871 ) — ( 18,817 )

Comprehensive income (loss) attributable to shareholders $ 41,307 $ ( 56,528 ) $ 125,457 $ ( 402,974 )

See accompanying notes to consolidated financial statements.

FTAI AVIATION LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

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

1 unchanged sentence

Net income 39,622 39,622

Other comprehensive income — — —

Total comprehensive income 39,622 39,622

Contributions from non-controlling interest 10 10

Issuance of ordinary shares 389 389

Dividends declared - ordinary shares ( 30,074 ) ( 30,074 )

Issuance of preferred shares 26 61,703 61,729

Dividends declared - preferred shares ( 8,335 ) ( 8,335 )

Equity-based compensation 510 510

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

Equity - March 31, 2024 $ 1,002 $ 159 $ 218,074 $ ( 42,163 ) $ 534 $ 177,606

Three Months Ended March 31, 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

Net income 29,397 29,397

Other comprehensive income — — —

Total comprehensive income 29,397 29,397

1 unchanged sentence

Dividends declared - ordinary shares ( 29,919 ) ( 29,919 )

Dividends declared - preferred shares ( 8,334 ) ( 8,334 )

Equity-based compensation 510 510

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

See accompanying notes to consolidated financial statements.

FTAI AVIATION LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Nine Months Ended September 30, 2022

Common Shares (1)

Preferred Shares (1)

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

Equity - December 31, 2021 $ 992 $ 133 $ 1,411,940 $ ( 132,392 ) $ ( 156,381 ) $ ( 192 ) $ 1,124,100

Net loss ( 203,953 ) ( 15,946 ) ( 219,899 )

Other comprehensive loss — ( 142,493 ) — ( 142,493 )

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

Dividends declared - ordinary shares ( 65,789 ) ( 65,789 )

Dividends declared - preferred shares ( 13,582 ) ( 13,582 )

Equity-based compensation 2,294 2,294

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 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

Dividends declared - ordinary shares ( 32,795 ) ( 32,795 )

Issuance of preferred shares 26 61,703 61,729

Dividends declared - preferred shares ( 6,791 ) ( 6,791 )

Equity-based compensation 108 108

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

________________________________________________

(1) Common and Preferred Shares of Fortress Transportation and Infrastructure Investors LLC were exchanged for Ordinary and Preferred Shares of FTAI Aviation Ltd.

when the Merger, as detailed in Note 1, was completed on November 10, 2022.

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

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income (loss) $ 125,457 $ ( 238,828 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income $ 39,622 $ 29,397

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Equity in losses of unconsolidated entities 667 1,335

Gain on sale of assets, net ( 110,511 ) ( 106,427 )

Gain on sale of leasing equipment, net ( 58,061 ) ( 31,657 )

Security deposits and maintenance claims included in earnings ( 2,437 ) ( 9,842 )

Loss on extinguishment of debt — 19,861

Equity-based compensation 510 108

2 unchanged sentences

Change in deferred income taxes 4,548 1,692

Change in fair value of non-hedge derivative — ( 1,567 )

Change in fair value of guarantees ( 259 ) ( 1,769 )

9 unchanged sentences

Other liabilities ( 717 ) 1,444

Net cash provided by (used in) operating activities 116,766 ( 21,299 )

Net cash (used in) provided by operating activities ( 345 ) 38,697

Cash flows from investing activities:

Investment in unconsolidated entities — ( 19,500 )

Principal collections on notes receivable 2,438 —

Principal collections on finance leases 786 —

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

Principal collections on notes receivable 1,964 —

Acquisition of leasing equipment ( 276,990 ) ( 127,513 )

1 unchanged sentence

Acquisition of lease intangibles 862 ( 8,640 )

Investment in promissory notes ( 11,500 ) —

Purchase deposits for acquisitions ( 25,535 ) ( 9,940 )

Proceeds from sale of leasing equipment 128,384 153,679

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

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

Proceeds for deposit on sale of aircraft and engine 2,098 1,042

Return of purchase deposits 530 —

4 unchanged sentences

(Dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities:

6 unchanged sentences

Release of maintenance deposits ( 3,056 ) —

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

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

Cash dividends - ordinary shares ( 30,074 ) ( 29,919 )

5 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Acquisition of leasing equipment $ 96,510 $ 124,932

Acquisition of property, plant and equipment ( 199 ) ( 762 )

Security deposits, maintenance deposits, other assets and other liabilities settled in the sale of leasing equipment 20,127 —

Settled and assumed security deposits 2,270 ( 12,161 )

Billed, assumed and settled maintenance deposits ( 15,854 ) ( 73,808 )

Non-cash change in equity method investment — ( 182,963 )

Conversion of interests in unconsolidated entities — ( 21,302 )

Acquisition of and transfers to leasing equipment $ ( 59,850 ) $ ( 18,539 )

Transfers from leasing equipment 73,297 51,607

Settled security deposits ( 1,442 ) ( 1,160 )

Settled maintenance deposits ( 18,964 ) ( 8,809 )

Issuance of ordinary shares — 230

4 unchanged sentences

FTAI Aviation Ltd.

(“we”, “us”, “our” or the “Company” and formerly “Fortress Transportation and Infrastructure Investors LLC”) is a Cayman Islands exempted company which through its subsidiaries owns, leases, and sells aviation equipment and also develops and manufactures, through a joint venture, and repairs and sells, through exclusivity arrangements, aftermarket components for aircraft engines.

(“we”, “us”, “our” or the “Company” and formerly “Fortress Transportation and Infrastructure Investors LLC”) is a Cayman Islands exempted company which through its subsidiaries owns, leases, and sells aviation equipment and also develops and manufactures, through a joint venture, and repairs and sells, through our maintenance facility and exclusivity arrangements, aftermarket components for aircraft engines.

Additionally, we own and lease offshore energy equipment.

We have two reportable segments, (i) Aviation Leasing and (ii) Aerospace Products (see Note 12).

On August 1, 2022, the Company completed the spin-off of its infrastructure business into an independent publicly traded company.

Accordingly, the operating results of, and costs to separate, the infrastructure business are reported in Net loss from discontinued operations, net of income taxes in the Consolidated Statements of Operations for all periods presented.

All amounts and disclosures included in the Notes to Consolidated Financial Statements reflect only the Company's continuing operations unless otherwise noted.

For additional information, see Note 3, "Discontinued Operations."

On November 10, 2022, the Company completed a reverse merger transaction pursuant to the Agreement and Plan of Merger (the “Merger”) between Fortress Transportation and Infrastructure Investors LLC (“FTAI LLC”) and the Company and the parties thereto, with FTAI LLC becoming a subsidiary of the Company.

This reverse merger represents a transaction between entities under common control.

Upon merger completion, FTAI LLC’s shareholders received one share of the Company’s ordinary shares, Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares in exchange for each share of FTAI LLC’s common shares, Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares, respectively, with the new Shares of FTAI Aviation Ltd.

having substantially similar rights and privileges as the respective FTAI LLC shares being converted.

All exchanges were completed without any further action from the shareholders.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

7 unchanged sentences

We use the equity method of accounting for investments in entities in which we exercise significant influence but which do not meet the requirements for consolidation.

Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities as well as the proportionate interest in adjustments to other comprehensive loss.

Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities.

Use of Estimates — The preparation of financial statements in conformity with U.S.

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Cash and Cash Equivalents — We consider all highly liquid short-term investments with a maturity of 90 days or less when purchased to be cash equivalents.

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 September 30, 2023.

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

Inventory is carried at the lower of cost or net realizable value on our Consolidated Balance Sheets.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Revenues — We disaggregate our revenue from contracts with customers by products and services.

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

Inventory is carried at the lower of cost or net realizable value.

Revenues — We disaggregate our revenue by products and services.

Revenues are within the scope of ASC 842, Leases, and ASC 606, Revenue from contracts with customers , unless otherwise noted.

We have elected to exclude sales and other similar taxes from revenues.

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 Asset sales revenue in the Consolidated Statement of Operations beginning in the third quarter 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 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 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 were included in Leasing equipment, net, on the Consolidated Balance Sheets.

Operating Leases —We lease equipment pursuant to operating leases.

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In the event the total cost of maintenance events over the term of a lease is less than the cumulative maintenance payments, we are not required to return any unused or excess maintenance payments to the lessee.

Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance deposits in our Consolidated Balance Sheets.

All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenue on our Consolidated Statements of Operations.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Maintenance payments received for which we expect to repay to the lessee are presented as Maintenance deposits.

All excess maintenance payments received that we do not expect to repay to the lessee are recorded as Maintenance revenue.

Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions.

1 unchanged sentence

For purchase and lease back transactions, we account for the transaction as a single arrangement.

We allocate the consideration paid based on the relative fair value of the aircraft and lease.

We allocate the consideration paid based on the relative fair value of the aircraft and lease and other related assets/liabilities acquired.

The fair value of the lease may include a lease premium or discount, which is recorded as a favorable or unfavorable lease intangible.

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

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

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.

Revenue is recorded with corresponding costs of sales, presented on a gross basis.

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.

Revenue is recorded with corresponding costs of sales, presented on a gross basis.

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.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Leasing Arrangements — At contract inception, we evaluate whether an arrangement is or contains a lease for which we are the lessee (that is, arrangements which provide us with the right to control a physical asset for a period of time).

Operating lease right-of-use (“ROU”) assets and lease liabilities are included in Other assets and Other liabilities in our Consolidated Balance Sheets, respectively.

Finance lease ROU assets are recognized in Other assets and lease liabilities are recognized in Other liabilities in our Consolidated Balance Sheets.

All lease liabilities are measured at the present value of the unpaid lease payments, discounted using our incremental borrowing rate based on the information available at commencement date of the lease.

ROU assets, for both operating and finance leases, are initially measured based on the lease liability, adjusted for prepaid rent and lease incentives.

Operating lease ROU assets are subsequently measured at the carrying amount of the lease liability adjusted for prepaid or accrued lease payments and lease incentives.

The finance lease ROU assets are subsequently amortized using the straight-line method.

Operating lease expenses are recognized on a straight-line basis over the lease term.

With respect to finance leases, amortization of the ROU asset is presented separately from interest expense related to the finance lease liability and is recorded in Operating expenses in the Consolidated Statements of Operations.

Variable lease payments, which are primarily based on usage, are recognized when the associated activity occurs.

We have elected to combine lease and non-lease components for all lease contracts where we are the lessee.

Additionally, for arrangements with lease terms of 12 months or less, we do not recognize ROU assets, and lease liabilities and lease payments are recognized on a straight-line basis over the lease term with variable lease payments recognized in the period in which the obligation is incurred.

Concentration of Credit Risk — We are subject to concentrations of credit risk with respect to amounts due from customers.

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

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.

We maintain cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions.

No single customer accounted for greater than 10% of total revenue during the three months ended March 31, 2024.

We earn ed 18 % and 10 % o f our revenue from two customers in the Aviation Leasing segment during the three months ended March 31, 2023.

As of March 31, 2024, there was one customer in the Aviation Leasing segment that represented 11 % of total accounts receivable, net.

As of December 31, 2023, no single customer accounted for greater than 10% of total accounts receivable, net.

We maintain cash and restricted cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions.

We monitor the financial condition of these institutions and have not experienced any losses associated with these accounts.

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 $ 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 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.

Our comprehensive loss represents net income (loss), as presented in the Consolidated Statements of Operations, adjusted for comprehensive loss related to cash flow hedges of our equity method investees of discontinued operations.

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 $ 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.

Allowance for Doubtful Ac counts and Credit Losses — 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 $ 72.2 million as of March 31, 2024 and December 31, 2023.

We determine the credit loss reserve for note receivables, receivables related to finance leases and inventory sales.

There was no provision for credit losses for the three months ended March 31, 2024 and $ 0.5 million for the three months ended March 31, 2023, which is included in Operating expenses in the Consolidated Statements of Operations.

Comprehensive Income — Comprehensive income 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.

Our comprehensive income represents net income, as presented in the Consolidated Statements of Operations.

Other Assets— Other assets is primarily comprised of lease incentives of $ 45.9 million and $ 43.5 million, purchase deposits of $ 37.1 million and $ 23.9 million, notes receivable of $ 130.5 million and $ 102.3 million, operating lease right-of-use assets, net of $ 3.4 million and $ 3.4 million, finance leases, net of $ 2.4 million and $ 3.0 million, maintenance right assets of $ 15.0 million and $ 16.3 million and prepaid expenses of $ 5.1 million and $ 7.8 million as of March 31, 2024 and December 31, 2023, respectively.

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

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.

For the three months ended March 31, 2024 and 2023, the Board of Directors declared cash dividends of $ 0.30 per ordinary share.

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Recent Accounting Pronouncements — The Company has evaluated all recent accounting pronouncements and none are expected to have a material impact on the Company’s consolidated financial statements.

DISCONTINUED OPERATIONS

FTAI Infrastructure Inc.

(“FTAI Infrastructure”) Spin-Off

On April 28, 2022, the Board of Directors of the Company unanimously approved the previously announced spin-off of the Company’s infrastructure business held by FTAI Infrastructure (a wholly owned subsidiary of the Company).

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.

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 nine months ended September 30, 2022.

FTAI Infrastructure is a corporation for U.S.

federal income tax purposes and holds, among other things, the Company’s previously held interests in the (i) Jefferson Terminal business, (ii) Repauno business, (iii) Long Ridge investment, and (iv) Transtar business.

FTAI Infrastructure retained all related project-level debt of those businesses.

In connection with the spin-off, 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 LLC retained the aviation business and certain other assets, and FTAI LLC’s remaining outstanding corporate indebtedness.

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

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

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

The Manager is entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Manager, which were assigned to FTAI Infrastructure.

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.

Financial Information of Discontinued Operations

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

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

General and administrative expenses 466 2,694

Acquisition and transaction expenses 3,813 13,971

Management fees and incentive allocation to affiliate 908 8,134

Depreciation and amortization 6,004 40,319

Interest expense 2,160 15,105

Other expense 7,641 47,765

Total expenses 38,277 233,198

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

Provision for income taxes 4,498 8,227

Net loss from discontinued operations, net of income taxes ( 14,782 ) ( 101,416 )

Net loss attributable to non-controlling interests in consolidated subsidiaries ( 2,871 ) ( 18,817 )

Net loss attributable to shareholders $ ( 11,911 ) $ ( 82,599 )

Additionally, in the quarter ended March 31, 2024, 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.

Recent Accounting Pronouncements — In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

This ASU modifies the disclosure and presentation requirements of reportable segments.

The new guidance requires the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss.

In addition, the new guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements.

This standard is effective retrospectively for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently assessing the impact this guidance will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures .

This ASU enhances the transparency and decision usefulness of income tax disclosures by expanding the disclosures of an entity’s income tax rate reconciliation and disaggregation of income taxes paid and income tax expense.

Under the new guidance, public business entities must annually disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (loss) by the applicable statutory income tax rate.

This standard is effective prospectively for all public entities for annual periods beginning after December 15, 2024, with early adoption and retrospective application permitted.

We are currently assessing the impact this guidance will have on our consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concept Statements.

This ASU amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification.

The amendments apply to all reporting entities within the scope of the affected accounting guidance.

Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities.

ASU 2024-02 is effective January 1, 2025 and we are currently assessing the impact this guidance will have on our consolidated financial statements and related disclosures.

ACQUISITION OF QUICKTURN

On December 1, 2023, we completed the acquisition of the remaining equity interest of Quick Turn Engine Center LLC (“QuickTurn”) from Unical Aviation Inc.

(“Unical”) for total cash consideration of $ 30.3 million to obtain full ownership.

We acquired QuickTurn to better position the Company to have tighter integration over the development and delivery of aerospace products.

QuickTurn is a hospital maintenance and testing facility dedicated to the CFM56 engine located in Miami, Florida that operates within our Aerospace Products segment.

The results of operations at QuickTurn have been included in the Consolidated Statements of Operations beginning on the acquisition date.

In accordance with ASC 805, Business Combinations .

The following fair values were assigned to assets acquired and liabilities assumed based on management’s estimates and assumptions and are preliminary.

The significant assumptions used to estimate the fair value of the property, plant, and equipment included replacement cost estimates and market data for similar assets where available.

The significant assumptions used to estimate the value of the customer relationship intangible assets included discount rate and future revenues and operating expenses.

The final valuation and related allocation of the purchase price is subject to change as additional information is received and will be completed no later than 12 months after the closing date.

The final acquisition accounting adjustments may be materially different and may include (i) changes in fair values of Property, plant and equipment and associated salvage values;

(ii) changes in fair values of Inventory;

(iii) changes in allocations to Intangible assets, as well as goodwill;

and, (iv) other changes to assets and liabilities, including working capital accounts.

FTAI AVIATION LTD.

1 unchanged sentence

(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 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:

Nine Months Ended

September 30, 2022

Operating activities:

Equity in losses of unconsolidated entities $ 46,601

Depreciation and amortization 40,319

Equity-based compensation 2,623

Investing activities:

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

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

Investment in unconsolidated entities ( 7,954 )

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

Non-cash change in equity method investment ( 182,963 )

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 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 Nine Months Ended

Income Statement September 30, 2022 September 30, 2022

Total revenues $ 156 $ 15,199

Operating expenses 4,337 36,693

Depreciation and amortization 4,383 29,381

Interest expense 4,580 30,622

Total expenses 13,300 96,696

Other expense ( 21 ) ( 234 )

Net loss $ ( 13,165 ) $ ( 81,731 )

The following table summarizes the preliminary allocation of the Net assets acquired as presented in our Consolidated Balance Sheets:

December 1, 2023

Fair value of assets acquired:

Cash and cash equivalents $ 518

Restricted cash 150

Accounts receivable, net 5,133

Property, plant, and equipment, net 30,559

Intangible assets 2,377

Inventory, net 9,332

Other assets 4,301

Total assets 52,370

Fair value of liabilities assumed:

Accounts payable and accrued liabilities 3,994

Other liabilities 2,410

Total liabilities 6,404

Net assets acquired $ 50,596

________________________________________________________

(1) Goodwill is primarily attributable to the assembled workforce of QuickTurn and the synergies expected to be achieved.

This goodwill is assigned to the Aerospace Products segment and is deductible for income tax purposes.

The following table presents the identifiable intangible assets and their estimated useful lives:

Estimated useful life in years Estimated Fair value

Above market leases 4 $ 470

Customer relationships 5 $ 1,907

Total $ 2,377

The following table presents the property, plant and equipment and their estimated useful lives:

Estimated useful life in years Estimated Fair value

Buildings and improvements 49

Machinery and equipment 6 - 23

Total $ 30,559

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The financial information in the table below summarizes the combined results of operations of FTAI and QuickTurn on a pro forma basis.

These pro forma results were based on estimates and assumptions which we believe are reasonable.

The pro forma adjustments are primarily comprised of the following:

• The allocation of the purchase price and related adjustments, including adjustments to depreciation and amortization expense related to the fair value of property, plant and equipment and intangible assets acquired;

• Associated tax-related impacts of adjustments.

The following pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2023.

March 31, 2023

Total revenue $ 297,041

Net income attributable to shareholders $ 21,085

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Leasing equipment $ 2,758,346 $ 2,574,394

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Leasing equipment, net $ 2,187,716 $ 2,032,413

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 aircrafts 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, to write-off the entire carrying value of leasing equipment assets that we did not expect to recover from Ukraine and Russia.

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.

We identified certain assets in our leasing equipment portfolio with indicators of impairment.

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 1.0 million and $ 1.2 million, net of redelivery compensation during the three months ended March 31, 2024 and March 31, 2023, respectively.

Depreciation expense for leasing equipment is summarized as follows:

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

2023 2022 2023 2022

Three Months Ended March 31,

Depreciation expense for leasing equipment $ 48,902 $ 40,766

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Carrying Value

Investment Ownership Percentage September 30, 2023 December 31, 2022

Investment Ownership Percentage March 31, 2024 December 31, 2023

Advanced Engine Repair JV Equity method 25 % $ 20,519 $ 21,040

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$ 22,055 $ 22,722

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 September 30, Nine Months Ended September 30,

____________________________________

* 45 % pro rata distribution of income until return of JV partner's initial investment

We did not recognize any other-than-temporary impairments for the three months ended March 31, 2024 and 2023.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended March 31,

Advanced Engine Repair JV $ ( 521 ) $ ( 408 )

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Quick Turn Engine Center LLC

On January 4, 2023, we invested $ 19.5 million for a 50 % interest in Quick Turn Engine Center LLC or “Quick Turn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine.

We account for our investment in Quick Turn as an equity method investment as we have significant influence through our interest.

On January 4, 2023, we invested $ 19.5 million for a 50 % interest ( 45 % pro rata distribution of income until return of the JV partner’s initial investment) in Quick Turn Engine Center LLC or “QuickTurn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine.

We account for our investment in QuickTurn as an equity method investment as we have significant influence through our interest.

On December 1, 2023, we purchased the remaining interest in QuickTurn from the joint venture partner for total cash consideration of $ 30.3 million to obtain full ownership with a 100 % equity interest.

On the acquisition date, the Company accounted for QuickTurn on a consolidated basis and derecognized it as an equity method investment.

See Note 3 for additional information.

FTAI AVIATION LTD.

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Intangible assets and liabilities, net are summarized as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Intangible assets

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Acquired favorable lease intangibles, net 44,803 48,694

Acquired customer relationships 1,907 1,907

Accumulated amortization ( 127 ) ( 11 )

Acquired customer relationships, net 1,780 1,896

Total intangible assets, net $ 46,583 $ 50,590

Intangible liabilities

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Acquired unfavorable lease intangibles, net $ 2,737 $ 1,762

Intangible assets and liabilities are all held within the Aviation Leasing segment.

Intangible liabilities relate to unfavorable lease intangibles and are included as a component of Other liabilities in the Consolidated Balance Sheets.

Amortization of intangible assets and liabilities is as follows:

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

2023 2022 2023 2022

Intangible assets and liabilities are all held within the Aviation Leasing and Aerospace Products segments.

Intangible liabilities relate to unfavorable lease intangibles and are included as a component of Other liabilities.

Amortization of intangible assets and liabilities is recorded as follows:

Classification in Consolidated Statements of Operations Three Months Ended March 31,

Lease intangibles Lease income $ 3,976 $ 3,983

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

Customer relationships Depreciation and amortization 117 —

Total $ 4,093 3,983

As of March 31, 2024, estimated net annual amortization of intangibles is as follows:

Remainder of 2024 $ 11,751

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Our debt, net is summarized as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

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(ii) Adjusted Term SOFR Rate + 2.75 %

9/20/25 $ 150,000

Total loans payable 175,000 —

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1,001,657 5.50 % 5/1/28 1,001,746

Senior Notes due 2030 (4)

496,793 7.88 % 12/1/30 496,704

Total bonds payable 2,550,234 2,550,493

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(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) 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.

(2) Includes an unamortized discount of $ 748 and $ 866 at March 31, 2024 and December 31, 2023, respectively, and an unamortized premium of $ 2,532 and $ 2,908 at March 31, 2024 and December 31, 2023, respectively.

(3) Includes an unamortized premium of $ 1,657 and $ 1,746 at March 31, 2024 and December 31, 2023, respectively.

(4) Includes unamortized discount of $ 3,207 and $ 3,296 at March 31, 2024 and December 31, 2023, respectively.

We were in compliance with all debt covenants as of March 31, 2024.

FAIR VALUE MEASUREMENTS

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These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy.

Except as discussed below, our financial instruments other than cash and cash equivalents and restricted cash consist principally of accounts receivable, notes receivable, accounts payable and accrued liabilities, loans payable, security deposits, maintenance deposits and management fees payable, whose fair values approximate their carrying values based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles.

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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:

September 30, 2023 December 31, 2022

The fair values of our bonds payable are presented in the table below and classified as Level 2 within the fair value hierarchy:

March 31, 2024 December 31, 2023

Senior Notes due 2025 650,026 649,383

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Senior Notes due 2028 970,410 963,630

The fair value of all other items reported as Debt, net in the Consolidated Balance Sheets approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy.

Senior Notes due 2030 526,500 521,440

The fair value of all other items reported as Debt, net approximate their carrying values due to their bearing market rates of interest and are classified as Level 2 within the fair value hierarchy.

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 $ 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 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.

The guarantees are valued at $ 7.1 million and $ 6.8 million as of March 31, 2024 and December 31, 2023, respectively, and are reflected as a component of Other liabilities.

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

During the three months ended March 31, 2024, the Company recorded a $ 0.3 million increase related to the change in fair value, which is recorded as Asset sales revenue.

During the three months ended March 31, 2023, the Company recorded a $ 4.3 million increase in guarantees related to the sale of six aircraft and a $ 1.8 million decrease related to the change in fair value, which is recorded as Asset sales revenue.

During the three months ended March 31, 2024 and 2023, there were no significant transfers into or out of Level 3.

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

4 unchanged sentences

EQUITY-BASED COMPENSATION

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 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.

We have a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to award equity compensation awards in the form of stock options to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

As of March 31, 2024, 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.

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

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

Three Months Ended March 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

Restricted Shares $ 510 $ 108 $ 6,623 3.2 years

In connection with our March 2023 offering of preferred shares (see Note 13), we granted options to the Manager related to 248,947 ordinary shares at an exercise price of $ 26.11 , which had a grant date fair value of $ 2.1 million.

The assumptions used in valuing the options were:

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

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

Restricted Shares

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.

The fair value of these awards were calculated based on the closing price of FTAI Aviation Ltd.’s ordinary shares on grant date of March 13, 2023.

During the three months ended March 31, 2024, FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC, transferred 49,790 of its options to certain of the Manager’s employees.

FTAI AVIATION LTD.

2 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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Cayman Islands $ — $ —

2 unchanged sentences

State and local 578 13

851 106 1,669 174

Total current provision (benefit) 858 ( 89 ) 1,612 825

Total current provision 1,024 334

Cayman Islands — —

Bermuda 3,439 —

United States:

1 unchanged sentence

State and local ( 358 ) 444

1,756 1,059 3,562 1,405

Total deferred provision 4,548 1,692

Provision for income taxes:

Continuing operations 3,705 4,189 7,586 7,357

Discontinued operations — — — —

Total $ 3,705 $ 4,189 $ 7,586 $ 7,357

Total provision for income taxes $ 5,572 $ 2,026

The Company is an exempted entity domiciled in the Cayman Islands where income taxes are not imposed.

3 unchanged sentences

federal, state and foreign corporate income tax in locations where they conduct business.

Historically, the Company’s Bermuda operations have not been subject to Bermuda income tax.

However, on December 27, 2023, the Government of Bermuda enacted a 15 percent corporate income tax regime (the “Bermuda CIT”) that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025.

As a result of the Bermuda CIT, the exemption of certain of the Company’s Bermuda subsidiaries from Bermuda corporate income taxes will cease in 2025.

For the year ended December 31, 2023, we recorded a deferred tax asset of $ 72.2 million in connection with the Bermuda law change.

A portion of the deferred tax asset will not be available to offset future taxable income due to reductions in the tax bases of the underlying assets and liabilities.

As such, for the three months ended March 31, 2024, the Company recorded a tax provision of $ 3.4 million to reduce its Bermuda deferred tax asset.

Our effective tax rate differs from the U.S.

1 unchanged sentence

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

As of and for the three months ended March 31, 2024, 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.

4 unchanged sentences

In connection with the spin-off of FTAI Infrastructure on August 1, 2022, we assigned our then-existing management and advisory agreement, dated as of May 20, 2015, with our Manager to FTAI Infrastructure.

On July 31, 2022, we entered into a new management and advisory agreement (the “Management Agreement”), by and among FTAI LLC, FTAI Aviation Ltd., and each of the subsidiaries that are party thereto and the Manager, with substantially similar terms and conditions as the existing management and advisory agreement.

On July 31, 2022, we entered into a new management and advisory agreement (the “Management Agreement”), by and among FTAI, FTAI Finance Holdco Ltd.

(a wholly owned subsidiary of the Company), and each of the subsidiaries that are party thereto and the Manager, with substantially similar terms and conditions as the existing management and advisory agreement.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The Manager is paid annual fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto.

In addition, the Manager may be reimbursed for various expenses incurred by the Manager on our behalf, including the costs of legal, accounting and other administrative activities.

Additionally, we have entered into certain incentive allocation arrangements with Master GP, which owns approximately 0.01 % of FTAI Aviation Holdco Ltd.

Additionally, we have entered into certain incentive allocation arrangements with Master GP, which owns approximately 0.01 % of FTAI Aviation Holdco Ltd (a wholly owned subsidiary of the Company).

The Manager is entitled to a management fee and reimbursement of certain expenses.

1 unchanged sentence

GAAP at the end of the two most recently completed months multiplied by an annual rate of 1.50 %, and is payable monthly in arrears in cash.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Master GP is entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below).

Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), is entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below).

The income incentive allocation is calculated and distributable quarterly in arrears based on the pre-incentive allocation net income for the immediately preceding calendar quarter (the “Income Incentive Allocation”).

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Capital Gains Incentive Allocation is calculated and distributable in arrears as of the end of each calendar year and is equal to 10 % of our pro rata share of cumulative realized gains from the date of the IPO through the end of the applicable calendar year, net of our pro rata share of cumulative realized or unrealized losses, the cumulative non-cash portion of equity-based compensation expenses and all realized gains upon which prior performance-based Capital Gains Incentive Allocation payments were made to Master GP.

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

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

2023 2022 2023 2022

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

Three Months Ended March 31,

Management fees $ 587 $ 55

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we will not reimburse the Manager for these expenses.

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

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

2023 2022 2023 2022

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes our reimbursements to the Manager:

Three Months Ended March 31,

Classification in the Consolidated Statements of Operations:

2 unchanged sentences

Total $ 2,267 $ 2,005

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

If we terminate the Management Agreement, we will generally be required to pay the Manager a termination fee.

The termination fee is equal to the amount of the management fee during the 12 months immediately preceding the date of the termination.

Pursuant to the terms of the Management Agreement, the termination fee is equal to the amount of the management fee during the 12 months immediately preceding the date of the termination.

In addition, an Incentive Allocation Fair Value Amount will be distributable to Master GP if Master GP is removed due to the termination of the Management Agreement in certain specified circumstances.

The Incentive Allocation Fair Value Amount is an amount equal to the Income Incentive Allocation and the Capital Gains Incentive Allocation that would be paid to Master GP if our assets were sold for cash at their then current fair market value (as determined by an appraisal, taking into account, among other things, the expected future value of the underlying investments).

Upon the successful completion of an offering of our ordinary shares or other equity securities (including securities issued as consideration in an acquisition), we grant the Manager options to purchase ordinary shares in an amount equal to 10% of the number of ordinary shares being sold in the offering (or if the issuance relates to equity securities other than our ordinary shares, options to purchase a number of ordinary shares equal to 10% of the gross capital raised in the equity issuance divided by the fair market value of an ordinary share as of the date of issuance), with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser or attributed to such securities in connection with an acquisition (or the fair market value of an ordinary share as of the date of the equity issuance if it relates to equity securities other than our ordinary shares).

Upon the successful completion of an offering of our ordinary shares or other equity securities (including securities issued as consideration in an acquisition), we grant the Manager options to purchase ordinary shares in an amount equal to 10 % of the number of ordinary shares being sold in the offering (or if the issuance relates to equity securities other than our ordinary shares, options to purchase a number of ordinary shares equal to 10 % of the gross capital raised in the equity issuance divided by the fair market value of a ordinary share as of the date of issuance), with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser or attributed to such securities in connection with an acquisition (or the fair market value of a ordinary share as of the date of the equity issuance if it relates to equity securities other than our ordinary shares).

Any ultimate purchaser of ordinary shares for which such options are granted may be an affiliate of the Manager.

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Accrued management fees $ 811 $ 224

Other payables 5,895 6,200

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

As of March 31, 2024 and December 31, 2023, there were no receivables from the Manager.

SEGMENT INFORMATION

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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, and repairs and sells, through exclusivity arrangements, aftermarket components for aircraft engines.

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

During the fourth quarter of 2023, the Company changed the composition of its operating segments to include V2500 engines within the Aerospace Products segment.

Prior periods have been restated to reflect the change in accordance with the requirements 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.

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

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.

We believe that net income (loss) attributable to shareholders from continuing operations, as defined by U.S.

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

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended September 30, 2023

Three Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

Lease income $ 35,981 $ — $ 9,641 $ 45,622

Maintenance revenue 63,925 — — 63,925

Asset sales revenue 72,990 — — 72,990

Aerospace products revenue — 107,085 — 107,085

Other revenue 82 — 1,392 1,474

Total revenues 172,978 107,085 11,033 291,096

Cost of sales 55,398 61,309 — 116,707

Operating expenses 13,944 5,947 13,996 33,887

General and administrative — — 3,015 3,015

Acquisition and transaction expenses 2,329 110 1,822 4,261

Management fees and incentive allocation to affiliate — — 4,577 4,577

Depreciation and amortization 41,141 115 2,703 43,959

Interest expense — — 40,185 40,185

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

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

Other income 444 — 17 461

Total other income 336 154 17 507

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

Provision for income taxes 2,332 1,131 242 3,705

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

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

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

Net income (loss) attributable to shareholders from continuing operations $ 58,170 $ 38,627 $ ( 63,824 ) $ 32,973

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

Adjusted EBITDA $ 119,561 $ 40,586 $ ( 5,929 ) $ 154,218

Non-controlling share of Adjusted EBITDA —

Equity in earnings of unconsolidated entities 46

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

Interest expense and dividends on preferred shares ( 48,519 )

Depreciation and amortization expense ( 59,380 )

Incentive allocations ( 4,274 )

Asset impairment charges —

Changes in fair value of non-hedge derivative instruments —

Losses on the modification or extinguishment of debt and capital lease obligations —

Acquisition and transaction expenses ( 4,261 )

Equity-based compensation expense ( 510 )

Provision for income taxes ( 3,705 )

Net income attributable to shareholders from continuing operations $ 32,973

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

Three Months Ended September 30, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 154 $ — $ — $ 154

Asia 48,267 952 11,033 60,252

Europe 56,679 34,961 — 91,640

North America 55,959 65,623 — 121,582

South America 11,919 5,549 — 17,468

Total $ 172,978 $ 107,085 $ 11,033 $ 291,096

Adjusted EBITDA is defined as net income (loss) attributable to shareholders, 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,

FTAI AVIATION LTD.

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(Dollars in tables in thousands, unless otherwise noted)

For the Nine Months Ended September 30, 2023

Nine Months Ended September 30, 2023

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.

We believe that net income (loss) attributable to shareholders, as defined by U.S.

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

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:

For the Three Months Ended March 31, 2024

Three Months Ended March 31, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

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Net income (loss) 42,597 66,433 ( 69,408 ) 39,622

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

Dividends on preferred shares — — 8,335 8,335

Net income (loss) attributable to shareholders from continuing operations $ 193,279 $ 92,223 $ ( 183,505 ) $ 101,997

Net income (loss) attributable to shareholders $ 42,597 $ 66,433 $ ( 77,743 ) $ 31,287

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

Nine Months Ended September 30, 2023

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

Three Months Ended March 31, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

12 unchanged sentences

Provision for income taxes ( 5,572 )

Net loss attributable to shareholders from continuing operations $ 101,997

Net income attributable to shareholders $ 31,287

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

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

4 unchanged sentences

South America 17,432 5,783 — 23,215

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 September 30, 2023:

Total revenues $ 135,310 $ 189,057 $ 2,327 $ 326,694

Presented below are the contracted minimum future annual revenues to be received under existing operating leases as of March 31, 2024:

Operating Leases

5 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended September 30, 2022

Three Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Three Months Ended March 31, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

14 unchanged sentences

Total expenses 140,144 57,932 61,892 259,968

Other expense

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

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

Other income (expense)

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 income taxes 926 2,586 677 4,189

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

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

Dividends on preferred shares — — 6,791 6,791

Net income (loss) attributable to shareholders from continuing operations $ 51,061 $ 15,826 $ ( 77,825 ) $ ( 10,938 )

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

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

Three Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Adjusted EBITDA $ 95,994 $ 18,560 $ ( 5,691 ) $ 108,863

Non-controlling share of Adjusted EBITDA —

Equity in losses of unconsolidated entities ( 99 ) ( 1,236 ) — ( 1,335 )

Pro-rata share of Adjusted EBITDA from unconsolidated entities 241

Interest expense and dividends on preferred shares ( 46,962 )

Depreciation and amortization expense ( 41,329 )

Incentive allocations —

Asset impairment charges ( 4,495 )

Changes in fair value of non-hedge derivative instruments —

Losses on the modification or extinguishment of debt and capital lease obligations ( 19,861 )

Acquisition and transaction expenses ( 2,848 )

Equity-based compensation expense —

Provision for income taxes ( 4,189 )

Net loss attributable to shareholders from continuing operations $ ( 10,938 )

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

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

Europe 41,869 15,511 — 57,380

North America 90,183 36,690 — 126,873

South America 9,050 — — 9,050

Total $ 164,848 $ 53,401 $ 12,116 $ 230,365

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Nine Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Aviation Leasing Aerospace Products Corporate and Other Total

Lease income $ 111,648 $ — $ 17,515 $ 129,163

Maintenance revenue 112,171 — — 112,171

Asset sales revenue 85,488 — — 85,488

Aerospace products revenue — 94,211 — 94,211

Other revenue 8,687 — 4,400 13,087

Total revenues 317,994 94,211 21,915 434,120

Cost of sales 64,855 55,284 — 120,139

Operating expenses 72,135 8,094 27,968 108,197

General and administrative — — 11,821 11,821

Acquisition and transaction expenses 624 15 7,701 8,340

Management fees and incentive allocation to affiliate — — 4 4

Depreciation and amortization 109,147 178 6,136 115,461

Asset impairment 128,171 — — 128,171

Interest expense — — 132,197 132,197

Total expenses 374,932 63,571 185,827 624,330

Other income (expense)

Equity in income (losses) of unconsolidated entities 753 ( 878 ) — ( 125 )

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

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

Other income 8 — — 8

Total other expense ( 91 ) ( 1,236 ) — ( 1,327 )

Income (loss) before income taxes 58,805 25,945 ( 53,327 ) 31,423

1 unchanged sentence

Net income (loss) 57,810 25,029 ( 53,442 ) 29,397

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

Dividends on preferred shares — — 6,791 6,791

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

Net income (loss) attributable to shareholders $ 57,810 $ 25,029 $ ( 60,233 ) $ 22,606

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

Nine Months Ended September 30, 2022

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

Three Months Ended March 31, 2023

Aviation Leasing Aerospace Products Corporate and Other Total

12 unchanged sentences

Provision for income taxes ( 2,026 )

Net loss attributable to shareholders from continuing operations $ ( 157,785 )

Net income attributable to shareholders $ 22,606

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

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

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:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Property, plant and equipment and leasing equipment, net

4 unchanged sentences

South America 214,342 229,460

Total $ 1,937,652 $ 1,923,567

Total property, plant and equipment and leasing equipment, net $ 2,231,830 $ 2,077,588

EARNINGS PER SHARE AND EQUITY

Basic earnings per ordinary share (“EPS”) is calculated by dividing net income (loss) attributable to shareholders by the weighted average number of ordinary shares outstanding, plus any participating securities.

Basic earnings per ordinary share (“EPS”) is calculated by dividing net income attributable to shareholders by the weighted average number of ordinary shares outstanding, plus any participating securities.

Diluted EPS is calculated by dividing net income attributable to shareholders by the weighted average number of ordinary shares outstanding, plus any participating securities and potentially dilutive securities.

Potentially dilutive securities are calculated using the treasury stock method.

The calculation of basic and diluted EPS is presented below:

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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

The calculation of basic and diluted EPS is presented below:

Three Months Ended March 31,

(in thousands, except share and per share data) 2024 2023

Net income (loss) from continuing operations $ 41,307 $ ( 4,147 ) $ 125,457 $ ( 137,412 )

Net loss from discontinued operations, net of income taxes — ( 14,782 ) — ( 101,416 )

Net income (loss) $ 41,307 $ ( 18,929 ) 125,457 ( 238,828 )

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

Continuing operations — — — —

Discontinued operations — ( 2,871 ) — ( 18,817 )

Net income $ 39,622 $ 29,397

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

Dividends on preferred shares 8,335 6,791

Net income (loss) attributable to shareholders $ 32,973 $ ( 22,849 ) $ 101,997 $ ( 240,384 )

Weighted Average Common Shares Outstanding - Basic (1)

99,927,594 99,378,771 99,796,736 99,372,016

Weighted Average Common Shares Outstanding - Diluted (1)

100,482,309 99,378,771 100,269,203 99,372,016

Earnings (loss) per share:

Continuing operations $ 0.33 $ ( 0.11 ) $ 1.02 $ ( 1.59 )

Discontinued operations $ — $ ( 0.12 ) $ — $ ( 0.83 )

Continuing operations $ 0.33 $ ( 0.11 ) $ 1.02 $ ( 1.59 )

Discontinued operations $ — $ ( 0.12 ) $ — $ ( 0.83 )

________________________________________________________

(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.

Net income attributable to shareholders $ 31,287 $ 22,606

Weighted Average Ordinary Shares Outstanding - Basic 100,245,905 99,728,245

Weighted Average Ordinary Shares Outstanding - Diluted 100,960,065 100,974,100

Earnings per share:

Basic $ 0.31 $ 0.23

Diluted $ 0.31 $ 0.22

For the three months ended March 31, 2024 and 2023, 0 and 57,175 shares, respectively, have been excluded from the calculation of Diluted EPS because the impact would be anti-dilutive.

During the three months ended March 31, 2024 and 2023, we issued 0 and 12,165 ordinary shares to certain directors as compensation.

Preferred Shares

In March 2023, in a public offering, we issued 2,600,000 shares of 9.50 % Fixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares (“Series D Preferred Shares”), par value $ 0.01 per share, with a liquidation preference of $ 25.00 per share for net proceeds before expenses of approximate ly $ 63.0 million .

COMMITMENTS AND CONTINGENCIES

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.

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.

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 $ 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.

The guarantees are valued at $ 7.1 million and $ 6.8 million as of March 31, 2024 and December 31, 2023, respectively, and are reflected as a component of Other liabilities.

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 March 31, 2024 was $ 34.7 million, which is not reasonably expected.

SUBSEQUENT EVENTS

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.

Senior Notes due 2031

On April 11, 2024, we issued $ 700 million aggregate principal amount of senior unsecured notes due 2031 (the “Senior Notes due 2031”).

The Senior Notes due 2031 bear interest at a rate of 7.00 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year, commencing on November 1, 2024.

Using a portion of the net proceeds, the Company completed a cash tender offer for $ 324.6 million aggregate principal amount of 2025 Notes validly tendered on April 11, 2024.

Holders whose notes were accepted for purchase received equal consideration per $1,000 principal amount of 2025 Notes, plus accrued and unpaid interest to, but not including, April 11, 2024.

The Company used the remaining net proceeds to redeem the remaining $ 325.4 million aggregate principal amount of 2025 Notes, plus accrued and unpaid interest, and for general corporate purposes.

On April 25, 2024, 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 March 31, 2024, payable on May 21, 2024 to the holders of record on May 10, 2024.

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

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.

Additionally, on April 25, 2024, 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, pa yable on June 14, 2024 to the holders of record on June 3, 2024 .

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