What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-04-26 compared with 2023-10-26 · 137 added, 239 removed, 206 unchanged (65% of the section changed)

4 unchanged sentences

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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We are externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), which has a dedicated team of experienced professionals focused on the acquisition of transportation assets since 2002.

As of September 30, 2023, we had total consolidated assets o f $2.6 billion and total equity of $95.1 million.

As of March 31, 2024, we had total consolidated assets of $3.2 billion and total equity of $177.6 million .

Impact of Russia’s Invasion of Ukraine

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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, during the six months ended June 30, 2022, 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.

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 March 31, 2024, 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 $243.0 million.

We intend to pursue 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 of our claims under these policies.

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

The extent of the impact of Russia’s invasion of Ukraine and the related sanctions on our operational and financial performance, including the ability for us to recover our leasing equipment in the region, will depend on future developments, including the duration of the conflict, sanctions and restrictions imposed by Russian and international governments, all of which remain uncertain.

Spin-Off of FTAI Infrastructure Inc.

(“FTAI Infrastructure”)

On August 1, 2022, we effected a spin-off of our infrastructure business held by FTAI Infrastructure (a wholly-owned subsidiary of the Company) 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.

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 entities.

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.

Fortress Transportation and Infrastructure Investors LLC (“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.

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

and certain other parties, with FTAI LLC becoming a subsidiary of the company.

As a result of the merger, FTAI Aviation Ltd.

became a Cayman Islands exempted company.

Upon merger completion, FTAI LLC

public common shareholders’ shares of the Company were exchanged automatically for shares of FTAI Aviation Ltd.

without any further action from the shareholders.

Operating Segments

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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, aircraft engines and 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, aircraft engines and aftermarket components for aircraft engines.

During the fourth quarter of 2023, the Company changed the composition 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 .

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

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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.

Comparison of the three and nine months ended September 30, 2023 and 2022

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, 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.

Comparison of the three months ended March 31, 2024 and 2023

The following table presents our consolidated results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

14 unchanged sentences

Total expenses 281,467 259,968 21,499

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 46 (358) 404 (1,669) (125) (1,544)

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

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

Other income (expense) 461 (1,038) 1,499 877 208 669

Total other income (expense) 507 (21,257) 21,764 (792) 60,155 (60,947)

Income (loss) before income taxes 45,012 42 44,970 133,043 (130,055) 263,098

Other (expense) income

Equity in losses of unconsolidated entities (667) (1,335) 668

Other income 634 8 626

Total other expense (33) (1,327) 1,294

Income from before income taxes 45,194 31,423 13,771

Provision for income taxes 5,572 2,026 3,546

Net income (loss) from continued operations 41,307 (4,147) 45,454 125,457 (137,412) 262,869

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

Net income (loss) 41,307 (18,929) 60,236 125,457 (238,828) 364,285

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

Continued operations — — — — — —

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

Net income 39,622 29,397 10,225

Dividends on preferred shares 8,335 6,791 1,544

Net income (loss) attributable to shareholders from continuing operations $ 32,973 $ (22,849) $ 55,822 $ 101,997 $ (240,384) $ 342,381

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net income attributable to shareholders $ 31,287 $ 22,606 $ 8,681

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net income (loss) attributable to shareholders from continuing operations $ 32,973 $ (10,938) $ 43,911 $ 101,997 $ (157,785) $ 259,782

Net income attributable to shareholders $ 31,287 $ 22,606 $ 8,681

Provision for income taxes 5,572 2,026 3,546

10 unchanged sentences

(548) (696) 148

Equity in (earnings) losses of unconsolidated entities (46) 358 (404) 1,669 125 1,544

Equity in losses of unconsolidated entities 667 1,335 (668)

Non-controlling share of Adjusted EBITDA — — —

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________________________________________________________

( 1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) depreciation and amortization expense of $43,959 and $34,853, (ii) lease intangible amortization of $3,726 and $3,291 and (iii) amortization for lease incentives of $11,695 and $3,185, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) depreciation and amortization expense of $49,920 and $40,926 , (ii) lease intangible amortization of $3,976 and $3,983 and (iii) amortization for lease incentives of $5,226 and $3,861 , respectively.

(2) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) net income (loss) of $46 and $(358), (ii) depreciation and amortization expense of $367 and $117 and (iii) acquisition and transaction expense of $229 and $0, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) net loss of $1,669 and $125, (ii) depreciation and amortization expense of $1,202 and $290 and (iii) acquisition and transaction expense of $563 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 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 (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 included in Leasing equipment, net, on the Consolidated Balance Sheets.

Comparison of the three months ended September 30, 2023 and 2022

Total revenues increased $60.7 million primarily due to an increase in Aerospace products revenue and Maintenance revenue, partially offset by a decrease in Asset sales revenue.

Aerospace products revenue increased $53.7 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 2023.

Maintenance revenue increased $28.4 million primarily due to the recognition of maintenance deposits due to the early redelivery of four 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.

Asset sales revenue decreased $12.5 million primarily due to a decrease in the sale of commercial aircraft and engines.

Comparison of the nine months ended September 30, 2023 and 2022

Total revenues increased $424.0 million primarily due to an increase in Asset sales revenue, Aerospace products revenue, Lease income and Maintenance revenue

Asset sales reven ue increased $197.7 million primarily due to an increase in the sale of commercial aircraft and engines.

See above discussion regarding presentation of asset sales.

Aerospace products revenue increased $166.1 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 2023.

Lease income increased $32.0 million primarily due to an increase in the number of aircraft and engines placed on lease and an increase in the Offshore Energy business driven by increased number of days on-hire for one of our vessels.

Maintenance revenue increased $29.0 million primarily due to the recognition of maintenance deposits due to the early redelivery of four 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.

Comparison of the three months ended September 30, 2023 and 2022

Total expenses increased $37.5 million, primarily due to higher (i) Cost of sales, (ii) Operating expenses and (iii) Depreciation and amortization.

Cost of sales increased $20.8 million primarily as a result of an increase in Aerospace product sales, partially offset by a decrease in the sale of commercial aircraft and engines.

Operating expenses increased $6.5 million, driven by an increase in commission expenses due to the increase in sales from the used material program and an increase in provision for credit losses, partially offset by a decrease in insurance expense, shipping and storage fees and other operating expenses.

Depreciation and amortization increased $9.1 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.

Comparison of the nine months ended September 30, 2023 and 2022

Total expenses increased $100.0 million, primarily due to higher (i) Cost of sales and (ii) Management fees and incentive allocation to affiliate, partially offset by lower (iii) Asset impairment, and (iv) Operating expenses.

Cost of sales increased $246.8 million primarily as a result of an increase in asset sales and Aerospace Products sales and the gross presentation of Asset sales revenue and Aerospace products revenue as described above.

Management fees and incentive allocation to affiliate increased $13.1 million primarily due to an increase in incentive fee due to the Manager.

Asset impairment decreased $127.0 million primarily due to the write down in 2022 of aircraft and engines located in Ukraine and Russia that may not be recoverable.

See Note 4 to the consolidated financial statements for additional information.

Operating expenses decreased $27.0 million which primarily reflects:

• a decrease of $43.5 million in the Aviation Leasing segment primarily as a result of decreases in provision for credit losses and other expenses as a result of the sanctions imposed on Russian airlines in 2022.

• an increase of $11.8 million in the Offshore Energy business 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.

• an increase of $4.7 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.

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net loss of $667 and $1,335 , (ii) depreciation and amortization expense of $119 and $400 , and (iii) acquisition and transaction expenses of $0 and $239, respectively.

Comparison of the three months ended March 31, 2024 and 2023

Total revenues increased $34.0 million primarily due to an increase in Aerospace products revenue and Maintenance revenue, partially offset by decreases in Asset sales revenue, Lease income, and Other revenue.

Aerospace products revenue increased $103.9 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 2024.

Maintenance reve nue increased $10.6 million p rimarily due to an increase in the number of aircraft and engines placed on lease and higher aircraft and engine utilizat ion.

Asset sales reven ue decreased $70.1 million primarily due to a decrease in the sale of commercial aircraft and engines in our Aviation Leasing segment.

Other revenue decreased $7.7 million primarily due to a decrease in end-of-lease redelivery compensation.

Lease income decreased $2.8 million primarily due to a decrease in leasing income of the Offshore Energy business as one of our vessels was off-hire in 2024 compared to on-hire in 2023.

Comparison of the three months ended March 31, 2024 and 2023

Total expenses increased $21.5 million, primarily due to higher (i) Depreciation and amortization expense, (ii) Interest expense, (iii) Acquisition and transaction expenses, (iv) Operating expenses and (v) M anagement fees and incentive allocation to affiliate, partially offset by lower (vi) Cost of sales.

Depreciation and amortization increased $9.0 million primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

Interest expense increased $8.4 million, which reflects an increase in the average debt outstanding of approximately $417.1 million primarily due to an increase in the (i) Senior Notes due 2030 of $496.8 million, which were issued in November 2023, partially offset by a decrease in the (ii) Revolving Credit Facility of $78.3 million.

Acquisition and transaction expenses increased $2.9 million primarily due to higher professional fees related to strategic transactions.

Operating expenses increased $2.8 million primarily due to an increase in repairs and maintenance expense, professional fees and shipping an d storage fees, as well as increase in commission expenses due to the increase in sales from the used material program, partially offset by decreases in the Offshore Energy business in crew expenses, project costs and other operating expenses as one of our vessels was off-hire in 2024.

Management fees and incentive allocation to affiliate increased $1.9 million primarily due to an increase in incentive fee due to the Manager driven by an increase in net income.

Cost of sales decreased $2.9 million primarily as a result of a decrease in asset sales, partially offset by an increase in Aerospace Product sales.

Other income (expense)

Total other expense decreased $21.8 million during the three months ended September 30, 2023 which primarily reflects a Loss on extinguishment of debt of $19.9 million recognized during the three months ended September 30, 2022 related to the pay-down of the 2021 Bridge Loan issued in December 2021 and February 2022 and the partial redemption of the Senior Notes due 2025.

Total other income decreased $60.9 million during nine months ended September 30, 2023 which primarily reflects (i) a decrease of $79.9 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 as described above and (ii) Loss on extinguishment of debt of $19.9 million recognized during the three months ended September 30, 2022 related to the pay-down of the 2021 Bridge Loan issued in December 2021 and February 2022 and the partial redemption of the Senior Notes due 2025.

Net income from continuing operations

Net income from continuing operations increased $45.5 million and $262.9 million for the three and nine months ended September 30, 2023, respectively, as compared to prior years primarily due to the changes noted above.

Net loss from discontinued operations

Net loss from discontinued operations decreased $14.8 million and $101.4 million for the three and nine months ended September 30, 2023, respectively, compared to the prior year as these businesses have spun off and there is no corresponding activity in the current period.

Total other expense decreased $1.3 million primarily due to a decrease of $0.7 million in the proportionate share of unconsolidated entities’ net loss.

Net income (loss)

Net income increased $10.2 million primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $45.4 million and $130.4 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBIT DA increased $36.4 million primarily due to the changes noted above.

Aviation Leasing Segment

As of September 30, 2023, in our Aviation Leasing segment, we own and manage 351 aviation assets, consisting of 92 commercial aircraft and 259 engines, including four aircraft that were still located in Ukraine and eight aircraft and seventeen engines that were still located in Russia.

As of September 30, 2023, 73 of our commercial aircraft and 163 of our engines were leased to operators or other third parties.

As of March 31, 2024, in our Aviation Leasing segment, we own and manage 380 aviation assets, consisting of 103 commercial aircraft and 277 engines, including eight ai rcraft and seventeen engines that were still located in Russia.

As of March 31, 2024, 82 of our commercial aircraft and 184 of our engines were leased to operators or other third parties.

Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease.

Our aviation equipment was approximately 77% utilized during the three months ended September 30, 2023, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.

Our aviation equipment was approximately 78% utilized during the three months ended March 31, 2024, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes.

Our aircraft currently have a weighted average remaining lease term of 44 months, and our engines currently on-lease have an average remaining lease term of 19 months.

3 unchanged sentences

Purchases — 17 17

Sales (2) (9) (11)

Transfers — (10) (10)

Assets at September 30, 2023 5 87 92

Assets at March 31, 2024 5 98 103

Assets at January 1, 2024 32 235 267

2 unchanged sentences

Transfers — (11) (11)

Assets at September 30, 2023 36 223 259

Assets at March 31, 2024 30 247 277

The following table presents our results of operations for our Aviation Leasing segment:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

11 unchanged sentences

Other income (expense)

Equity in (losses) earnings of unconsolidated entities (108) (45) (63) (242) 753 (995)

Gain on sale of assets, net — — — — 61,371 (61,371)

Equity in losses of unconsolidated entities (146) (99) (47)

Other income 369 8 361

2 unchanged sentences

Provision for income taxes 3,033 995 2,038

Net income 58,170 51,061 7,109 193,279 3,315 189,964

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

Net income attributable to shareholders from continuing operations $ 58,170 $ 51,061 $ 7,109 $ 193,279 $ 3,315 $ 189,964

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net income attributable to shareholders $ 42,597 $ 57,810 $ (15,213)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net income attributable to shareholders from continuing operations $ 58,170 $ 51,061 $ 7,109 $ 193,279 $ 3,315 $ 189,964

Provision for income taxes 2,332 926 1,406 4,414 2,116 2,298

Net income attributable to shareholders $ 42,597 $ 57,810 $ (15,213)

Provision for (benefit from) income taxes 3,033 995 2,038

Equity-based compensation expense 105 22 83

9 unchanged sentences

(83) (36) (47)

Equity in losses (earnings) of unconsolidated entities 108 45 63 242 (753) 995

Equity in losses of unconsolidated entities 146 99 47

Non-controlling share of Adjusted EBITDA — — —

1 unchanged sentence

________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) depreciation expense of $41,141 and $32,728, (ii) lease intangible amortization of $3,726 and $3,291 and (iii) amortization for lease incentives of $11,695 and $3,185, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(1) Includes the follo wing items for the three months ended March 31, 2024 and 2023:

(i) depreciation expense of $46,084 and $38,140, (ii) lease intangible amortization of $3,976 and $3,983 and (iii) amortization for lease incentives of $5,226 and $3,861, respectively.

(2) Includes the following items for the three months ended September 30, 2023 and 2022:

(2) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net loss of $146 and $99 and (ii) depreciation and amortization of $63 and $63, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) net (loss) income of $(242) and $753 and (ii) depreciation and amortization of $189 and $122, respectively.

Comparison of the three months ended September 30, 2023 and 2022

Total revenue increased $8.1 million driven by an increase in Maintenance revenue, partially offset by a decrease in Asset sales revenue, Lease income and Other revenue.

• Maintenance revenue increased $28.4 million primarily due to the recognition of maintenance deposits due to the early redelivery of four 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.

Comparison of the three months ended March 31, 2024 and 2023

Total reven ue decreased $63.7 million driven by a decrease in asset sales revenue and other revenue, partially offset by an increase in maintenance revenue and lease income.

• Asset sales revenue decreased $70.1 million primarily due to a decrease in the sale of commercial aircraft and engines.

• Lease income decreased $4.4 million primarily due to an increase in the number of aircraft and engines redelivered, partially offset by additional aircraft and engines placed on lease.

• Other revenue decreased $3.4 million primarily due to lower end-of-lease redelivery compensation.

Comparison of the nine months ended September 30, 2023 and 2022

Total revenue increased $246.1 million driven by an increase in Asset sales revenue, Maintenance revenue and Lease income, partially offset by Other revenue.

• Asset sales revenue increased $197.7 million primarily due to an increase in the sale of commercial aircraft and e ngines.

See above discussion regarding presentation of asset sales.

• Lease income increased $21.3 million primarily due to an increase in the number of aircraft and engines placed on lease.

• Maintenance revenue increased $29.0 million primarily due to the recognition of maintenance deposits due to the early redelivery of four 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 $1.9 million primarily due to a decrease in end-of-lease redelivery compensation.

Comparison of the three months ended September 30, 2023 and 2022

Total expenses decrea sed $0.1 million primarily driven by a decrease in Cost of sales and Asset impairment, partially offset by an increase in Depreciation and amortization, Operating expenses and Acquisition and transaction expenses.

• Cost of sales decreased $9.5 million primarily as a result of a decrease in the sale of commercial aircraft and engines.

• Asset impairment decreased $4.5 million primarily due to the adjustment of the carrying value of leasing equipment to fair value in 2022.

• Depreciation and amortization expense increased $8.4 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.

• Operating expenses increased $3.4 million driven by an increase in provision for credit losses, partially offset by a decrease in insurance expense, shipping and storage fees and other operating expenses.

• Acquisition and transaction expenses increased $2.1 million driven by higher compensation and related costs associated with the acquisition of aviation leasing equipment.

Comparison of the nine months ended September 30, 2023 and 2022

Total expenses decreased $8.0 million primarily driven by a decrease in Asset impairment and Operating expenses, partially offset by an increase in Cost of sales.

• Asset impairment decreased $127.0 million primarily due to the write down in 2022 of aircraft and engines located in Ukraine and Russia that may not be recoverable.

See Note 4 to the consolidated financial statements for additional information.

• Operating expenses decreased $43.5 million primarily as a result of decreases in provision for credit losses and other expenses as a result of the sanctions imposed on Russian airlines in 2022.

• Cost of sales increased $152.3 million as a result of an increase in assets sales and the gross presentation of Asset sales revenues and related costs of sales as described above.

• Depreciation and amortization expense increased $5.8 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 $4.3 million driven by higher compensation and related costs associated with the acquisition of aviation leasing equipment.

• Other revenu e decreased $6.3 million primarily due to a decrease in end-of-lease redelivery compensation.

• Maintenance revenue increased $10.6 million primarily due to an increase in the number of aircraft and engines placed on lease and higher aircraft and engine utilization.

• Leas e income increased $2.0 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.

Total exp enses decreased $50.2 million primarily driven by a decrease in cost of sales, partially offset by an increase in depreciation and amortization, acquisition and transaction expenses, and operating expenses.

• Cost of sales decreased $60.3 million primarily as a result of a decrease in asset sales.

• Depreciation and amor tization expense increased $7.9 million driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Acquisition and transaction expense s increased $1.3 million driven by higher compensation and related costs associated with the acquisition of aviation leasing equipment.

• Operating exp enses increased $1.1 million driven by an increase in professional fees and repairs and maintenance expenses, partially offset by a decrease in shipping and storage fees and insurance expense.

Other income (expense)

Total other income increased $0.3 million during the three months ended September 30, 2023 primarily due to an increase of $0.4 million in interest income.

Total other income decreased $61.8 million during the nine months ended September 30, 2023 primarily due to a decrease of $61.4 million in Gain on sale of assets, net in 2022 due to the change in presentation of asset sales.

Total other income increased $0.3 million primarily due to an increase in interest income, partially offset by an increase in Aviation Leasing’s proportionate share of unconsolidated entities’ net loss.

Net income decreased $15.2 million primarily due to the changes noted above.

Provision for income taxes

The provision for income taxes increased $2.0 million primarily due to the Company reducing a portion of the deferred tax asset of $46.6 million in connection with a tax law change in Bermuda, which was recorded at December 31, 2023.

See Note 10 to the consolidated financial statements for additional information.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $23.6 million and $79.2 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITD A decreased $2.7 million primarily due to the changes noted above.

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.

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

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 3 “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.

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

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Total expenses 119,564 57,932 61,632

Other income (expense)

Equity in earnings (losses) of unconsolidated entities 154 (313) 467 (1,427) (878) (549)

Gain on sale of assets, net — — — — 18,562 (18,562)

Total other income (expense) 154 (313) 467 (1,427) 17,684 (19,111)

Other expense

Equity in losses of unconsolidated entities (521) (1,236) 715

Total other expense (521) (1,236) 715

Income before income taxes 68,972 25,945 43,027

Provision for income taxes 2,539 916 1,623

Net income 38,627 15,826 22,801 92,223 43,269 48,954

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

Net income attributable to shareholders from continuing operations $ 38,627 $ 15,826 $ 22,801 $ 92,223 $ 43,269 $ 48,954

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net income attributable to shareholders $ 66,433 $ 25,029 $ 41,404

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net income attributable to shareholders from continuing operations $ 38,627 $ 15,826 $ 22,801 $ 92,223 $ 43,269 $ 48,954

Net income attributable to shareholders $ 66,433 $ 25,029 $ 41,404

Provision for income taxes 2,539 916 1,623

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(465) (660) 195

Equity in (earnings) losses of unconsolidated entities (154) 313 (467) 1,427 878 549

Equity in losses of unconsolidated entities 521 1,236 (715)

Non-controlling share of Adjusted EBITDA — — —

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________________________________________________________

(1) Includes the following items for the three months ended September 30, 2023 and 2022:

(i) net income (loss) of $154 and $(313), (ii) depreciation and amortization expense of $304 and $56 and (iii) acquisition and transaction expense of $229 and $0, respectively.

Includes the following items for the nine months ended September 30, 2023 and 2022:

(i) net losses of $1,427 and $878, (ii) depreciation and amortization expense of $1,013 and $168 and (iii) acquisition and transaction expense of $563 and $0, respectively.

Total Aerospace products revenue increased $53.7 million and $166.1 million during the three and nine months ended September 30, 2023 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 2023.

Total expenses increased $32.8 million primarily due to an increase in Cost of sales and Operating expenses during the three months ended September 30, 2023.

• Cost of sales increased $30.2 million as a result of an increase in Aerospace product sales.

• Operating expenses increased $2.5 million primarily due to an increase in commission expenses due to the increase in sales from the used material program.

Total expenses increased $100.4 million primarily due to an increase in Cost of sales and Operating expenses during the nine months ended September 30, 2023.

• Cost of sales increased $94.4 million primarily as a result of an increase in Aerospace products sales and the gross presentation described above.

• Operating expenses increased $4.7 million primarily due to an increase in commission expenses due to the increase in sales from the used material program.

Other income (expense)

Total other income increased $0.5 million primarily due to an increase of in our proportionate share on unconsolidated entities’ net income during the three months ended September 30, 2023.

Total other income decreased $19.1 million primarily due to a decrease of $18.6 million in Gain on sale of assets, net and an increase of $0.5 million in our proportionate share of unconsolidated entities’ net loss during the nine months ended September 30, 2023.

See above discussion regarding presentation of asset sales.

(1) Includes the following items for the three months ended March 31, 2024 and 2023:

(i) net loss of $521 and $1,236, (ii) depreciation and amortization expense of $56 and $337, and (iii) acquisition and transaction expenses o f $0 and $239, respectively.

Comparison of the three months ended March 31, 2024 and 2023

Tot al Aerospace Products revenue increased $103.9 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 2024.

Tota l expenses increased $61.6 million primarily due to an increase in costs of sales, operating expenses and depreciation and amortization.

• Cost of sale s increased $57.5 million primarily as a result of an increase in Aerospace Product sales.

• Op erating expenses increased $3.8 million primarily driven by an increase in commission expenses due to the increase in sales from the used material program as well as increases in shipping and storage fees, professional fees and other operating expenses.

Other expense

Total other expense decreased $0.7 million due to a decrease in our proportionate share of unconsolidated entities’ net loss.

Net income increased $41.4 million primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $22.0 million and $49.3 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

Adjusted EBITD A increased $42.9 million primarily due to the changes noted above.

Corporate and Other

The following table presents our results of operations:

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended March 31, Change

(in thousands) 2024 2023

9 unchanged sentences

Total expenses 72,000 61,892 10,108

Other income (expense)

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

Other income (expense) 17 (1,080) 1,097 17 (37) 54

Total other income (expense) 17 (20,941) 20,958 17 (19,898) 19,915

Other income 265 — 265

Total other income 265 — 265

Loss before income taxes (69,408) (53,327) (16,081)

1 unchanged sentence

Net loss (69,408) (53,442) (15,966)

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

Dividends on preferred shares 8,335 6,791 1,544

Net loss attributable to shareholders from continuing operations $ (63,824) $ (77,825) $ 14,001 $ (183,505) $ (204,369) $ 20,864

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

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Net loss attributable to shareholders $ (77,743) $ (60,233) $ (17,510)

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

Three Months Ended March 31, Change

(in thousands) 2024 2023

Net loss attributable to shareholders from continuing operations $ (63,824) $ (77,825) $ 14,001 $ (183,505) $ (204,369) $ 20,864

Net loss attributable to shareholders $ (77,743) $ (60,233) $ (17,510)

Provision for income taxes — 115 (115)

8 unchanged sentences

Pro-rata share of Adjusted EBITDA from unconsolidated entities — — —

Equity in (earnings) losses of unconsolidated entities — — — — — —

Equity in losses (earnings) of unconsolidated entities — — —

Non-controlling share of Adjusted EBITDA — — —

Adjusted EBITDA (non-GAAP) $ (10,983) $ (7,277) $ (3,706)

Total revenues decreased $1.1 million during the three months ended September 30, 2023 primarily due to a crane repair on one of our vessels.

Total revenues increased $11.9 million during the nine months ended September 30, 2023 primarily due to an increase in the Offshore Energy business driven by increased number of days on-hire for one of our vessels.

Comparison of the three months ended September 30, 2023 and 2022

Total expenses increased $4.8 million primarily due to highe r Management fees and incentive allocation to affiliate.

• Management fees and incentive allocation to affiliate increased $4.6 million primarily due to an increase in incentive fee due to the Manager.

Comparison of the nine months ended September 30, 2023 and 2022

Total expenses increased $7.5 million primarily due to higher Management fees and incentive allocation to affiliate, partially offset by lower Interest expense and Acquisition and transaction expenses.

• Management fees and incentive allocation to affiliate increased $13.1 million primarily due to an increase in incentive fee due to the Manager.

• Operating expenses increased $11.8 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.

• Interest expense decreased $14.2 million, which reflects a decrease in the average outstanding debt of approximately $349.5 million due to decreases in (i) the 2021 Bridge Loans of $237.7 million and (ii) the Senior Notes due 2025 of $155.2 million, which were partially redeemed in August 2022, partially offset by an increase in (iii) the Revolving Credit Facility of $43.8 million.

• Acquisition and transaction expense decreased $3.6 million primarily due to lower professional fees related to strategic transactions.

Other income (expense)

Total other expense decreased $21.0 million and $19.9 million during the three and nine months ended September 30, 2023 which primarily reflects a 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 the Senior Notes due 2025.

Comparison of the three months ended March 31, 2024 and 2023

Total revenues decreased $6.2 million primarily due to a decrease in the Offshore Energy business as one of our vessels was off-hire in 2024 compared to on-hire in 2023.

Total expenses increa sed $10.1 million primarily due to higher (i) Interest expense, (ii) Acquisition and transaction expenses, (iii) Management fees and incentive allocation to affiliate, partially offset by lower (iv) Operating expenses.

• Interest expense i ncreased $8.4 million, which reflects an increase in the average debt outstanding of approximately $417.1 million primarily due to an increase in the (i) Senior Notes due 2030 of $496.8 million, which were issued in November 2023, partially offset by a decrease in the (ii) Revolving Credit Facility of $78.3 million.

• Acquisition and transaction expense increased $2.1 million primarily due to higher professional fees related to strategic transactions.

• Management fees and incentive allocation to affiliate increased $1.9 million primarily due to an increase in incentive fee due to the Manager driven by an increase in net income.

• Operating expenses decreased $2.2 million primarily due to decreases in the Offshore Energy business in crew expenses, project costs and other operating expenses as one of our vessels was off-hire in 2024.

Total other income increased $0.3 million which primarily reflects an increase in bank fees and expenses.

Net loss increased $16.0 million primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA decreased $0.2 million and increased $1.9 million during the three and nine months ended September 30, 2023, respectively, primarily due to the changes noted above.

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

Liquidity and Capital Resources

We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during these uncertain times.

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

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 $562.8 million and $545.7 million during the nine months ended September 30, 2023 and 2022, respectively.

• Dividends to shareholders and holders of eligible participating securities were $113.2 million and $119.0 million during the nine months ended September 30, 2023 and 2022, respectively.

• Cash used for the purpose of making investments was $303.0 million and $167.0 million during the three months ended March 31, 2024 and 2023, respectively.

• Distributions to shareholders, including cash dividends, were $38.4 million and $36.7 million during the three months ended March 31, 2024 and 2023, respectively.

• Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities.

Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities.

Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our aviation assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales.

• Cash flows provided by operating activities, plus the principal collections on finance leases and maintenance reserve collectio ns were $143.1 million and $18.5 million during the nine months ended September 30, 2023 and 2022, respectively.

• During the nine months ended September 30, 2023, additional borrowings and total principal repayments in connection with the Revolving Credit Facility were $430.0 million and $330.0 million, respectively.

During the nine months ended September 30, 2022, additional borrowings were obtained in connection with the (i) 2021 Bridge Loans of $239.5 million (ii) Revolving Credit Facility of $255.0 million and (iii) EB-5 Loan Agreement of $9.5 million.

We made total principal repayments of (i) $444.5 million relating to the Revolving Credit Facility, (ii) $340.0 million related to the 2021 Bridge Loans and (iii) $200.0 million related to the Senior Notes due 2025.

• Proceeds from the sale of assets were $366.1 million and $267.4 million d uring the nine months ended September 30, 2023 and 2022, respectively.

• Proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs were $61.7 million and $0.0 million during the nine months ended September 30, 2023 and 2022, respectively.

Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our aviation assets (including maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales.

• Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $9.4 million and $48.8 million during the three months ended March 31, 2024 and 2023, respectively.

• During the three months ended March 31, 2024, additional borrowings and total principal repayments in connection with the Revolving Credit Facility were $210.0 million and $35.0 million, respectively.

During the three months ended March 31, 2023, additional borrowings and total principal repayments in connection with the Revolving Credit Facility were $145.0 million and $220.0 million, respectively.

• Proceeds from the sale of assets were $128.4 million and $153.7 million during the three months ended March 31, 2024 and 2023, respectively.

• Proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs, were $61.7 million during the three months ended March 31, 2023.

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.

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Historical Cash Flow

Comparison of the nine months ended September 30, 2023 and 2022

The following table compares the historical cash flow from continuing and discontinued operations for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

Comparison of the three months ended March 31, 2024 and 2023

The following table compares the historical cash flow for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

(in thousands) 2024 2023

Cash Flow Data:

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

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

Net cash used in investing activities (169,213) (12,323)

Net cash provided by (used in) financing activities 144,026 (38,445)

Net cash provided by operating activities increased $138.1 million, which primarily reflects (i) an increase in Net income of $364.3 million and (ii) Changes in working capital of $63.9 million, partially offset by certain adjustments to reconcile net income to Cash provided by operating activities including, (iii) Asset impairment of $127.0 million, (iv) Provision for credit losses of $40.6 million, (v) Equity in losses of unconsolidated entities of $45.1 million, (vi) Depreciation and amortization of $32.4 million, (vii) Loss on extinguishment of debt of $19.9 million, and (viii) amortization of deferred financing costs of $10.7 million.

Net cash used in investing activities decreased $77.3 million, primarily due to (i) a decrease in Acquisitions of property, plant and equipment of $134.8 million, (ii) higher Proceeds from the sale of leasing equipment of $104.0 million and partially offset by (iii) an increase in Acquisitions of leasing equipment of $146.3 million and (iv) an increase in Investment in unconsolidated entities of $12.2 million.

Net cash provided by financing activities increased $151.8 million, primarily due to (i) an decrease in Repayments of debt of $654.5 million partially offset by (ii) a decrease in Dividend from spin-off of FTAI Infrastructure, net of cash transferred of $500.6 million.

We also have current availability for borrowing of up to $50.0 million.

Cash Flow 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.

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.

The discontinued operations historically generated negative operating and investing cash flows.

Net cash provided by operating activities decreased $39.0 million, which primarily reflects certain adjustments to reconcile net income to cash provided by operating activities including (i) Changes in net working capital of $44.7 million and an increase in (ii) Gain on sale of assets, net of $26.4 million, partially offset by an increase in (iii) Depreciation and amortization of $9.0 million, a decrease in (iv) Security deposits and maintenance claims included in earnings of $7.4 million, and increases in (v) net income of $10.2 million, (vi) Change in deferred income taxes of $2.9 million, and (vii) Change in fair value of guarantees of $1.5 million.

Net cash used in investing activities increased $156.9 million, primarily due to (i) an increase in Acquisitions of leasing equipment of $149.5 million, (ii) lower Proceeds from the sale of leasing equipment of $25.3 million, (iii) higher Purchase deposits for acquisitions of $15.6 million, partially offset by (iv) a decrease in Investment in unconsolidated entities of $19.5 million and (v) a decrease in Acquisitions of lease intangibles of $9.5 million.

Net cash provided by financing activities increased $182.5 million, primarily due to (i) a decrease in Repayment of debt of $185.0 million and (ii) an increase in Proceeds from debt of $65.0 million, partially offset by (iii) a decrease in proceeds from the issuance of preferred shares, net of underwriter’s discount and issuance costs of $61.7 million and (iv) and increase in Release of maintenance deposits of $3.1 million.

Contractual Obligations

Our material cash requirements include the following contractual and other obligations:

Debt Obligations — As of September 30, 2023, we had outstanding principal and interest payment obligations of $2.3 billion and $0.5 billion, respectively, of which only interest payments of $164.2 million are due in the next twelve months.

Debt Obligations — As of March 31, 2024, we had outstanding principal and interest payment obligations of $2.7 billion and $0.7 billion, respectively, of which only interest payments of $191.6 million are due in the next twelve months.

See Note 7 to the consolidated financial statements for additional information about our debt obligations.

Lease Obligations —As of September 30, 2023, we had outstanding operating and finance lease obligations of $2.3 million, of which $0.9 million is due in the next twelve months.

Lease Obligations —As of March 31, 2024, we had outstanding operating and finance lease obligations of $2.2 million, of which $0.9 million is due in the next twelve months.

Other Cash Requirements —In addition to our contractual obligations, we pay quarterly cash dividends on our ordinary shares and preferred shares, which are subject to change at the discretion of our Board of Directors.

9 unchanged sentences

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 2. Management’s Discussion and Analysis