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Item 7. Management’s Discussion and Analysis

2025-03-03 compared with 2024-02-26 · 290 added, 233 removed, 342 unchanged (60% of the section changed)

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We own, lease and sell aviation equipment.

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

Additionally, we own and lease offshore energy equipment.

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

We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation.

We believe that there is a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities.

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

We believe that there is a large number of acquisition opportunities in our markets and that our expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities.

As of December 31, 2024, we had total consolidated assets of $4.0 billion and total equity of $81.4 million.

Internalization of Management

On May 28, 2024, the Company entered into definitive agreements with the Former Manager and Master GP to internalize the Company’s management function.

As part of the termination of the Management Agreement, the Company (i) agreed to pay the Former Manager (for itself and on behalf of the Master GP, as applicable) the Cash Consideration, the compensation accrued and payable, but not yet paid, under the Management Agreement and the expenses that were reimbursable, but not yet reimbursed, under the Management Agreement;

(ii) issued to the Former Manager (for itself and on behalf of the Master GP, as applicable) the Share Consideration;

(iii) purchased from Master GP all of its partnership interests in FTAI Aviation Holdco Ltd., a subsidiary of the Company, in exchange for $30 thousand.

Following the Internalization, the Company no longer pays management fees or incentive distributions to the Former Manager and Master GP.

In connection with the termination of the Management Agreement, the Company also entered into a Transition Services Agreement with the Former Manager.

Under the Transition Services Agreement, the Former Manager was required to continue to provide the Company and its affiliates with all of the Services for a transition period until October 31, 2024, during which the Company procured replacements for the Services.

The Services were provided to the Company for a fee equal to the Former Manager’s cost of providing the Services, including the allocated cost of, among other things, overhead, employee wages and compensation, rent and related real estate expenses and actually incurred out-of-pocket expenses, plus a mark-up of ten percent (10%).

The Company was required to use commercially reasonable efforts to make available to the Former Manager certain employees of the Company who were previously employees of the Former Manager to provide the Reverse Services, subject to certain exceptions.

In addition, the Former Manager is required to continue to provide the services that are reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025.

The Company is required to continue to provide the Reverse Services until the later to occur of the dissolution or sale of the entities receiving Reverse Services.

The Transition Services Agreement may be terminated earlier (x) by mutual agreement of the parties, (y) by either the Former Manager or the Company in the event of a material breach by the non-terminating party that is not cured within thirty (30) days following written notification thereof, or (z) by the Former Manager if the Company fails to pay any undisputed sum overdue and payable for a period of at least thirty (30) days.

Impact of Russia’s Invasion of Ukraine

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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 Russia is approximately $210.7 million.

We intend to pursue all our claims under these policies.

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

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

Spin-Off of FTAI Infrastructure Inc.

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FTAI retained the aviation business and certain other assets, and FTAI’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.

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

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

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

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

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

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without any further action from the shareholders.

Strategic Capital Initiative

On December 30, 2024, the Company announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors.

The first partnership under the initiative (the “2025 Partnership”) will focus on acquiring 737NG and A320ceo aircraft.

The Strategic Capital Initiative, and its related partnerships, will allow the Company to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale.

The Company has agreed that the 2025 Partnership, and follow-on partnerships, will be the primary buyer of on-lease 737NG and A320ceo aircraft.

The Company will provide aircraft management services to the 2025 Partnership, and the Company will receive customary, market-based compensation for providing such services.

The Company has also committed to make a minority investment in the 2025 Partnership.

The Company expects to provide aircraft management services to, and make minority investments in, future partnerships.

Operating Segments

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

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

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

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

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

See Note 2 for additional information.

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

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

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

(“SoftBank”).

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

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

The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines.

Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, internalization fee and management fees and incentive compensation pursuant to the Management Agreement prior to the Internalization effective May 28, 2024.

Additionally, Corporate and Other also includes offshore energy related assets, which consist of equipment that support offshore oil and gas activities and production.

Results of Operations

Adjusted EBITDA (Non-GAAP)

The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure.

Besides net income (loss), the chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as a key performance measure.

Adjusted EBITDA is not a financial measure in accordance with U.S.

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

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.

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 preferred shares and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares and interest expense, internalization fee to affiliate, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA, if any.

The following table presents our consolidated results of operations:

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Management fees and incentive allocation to affiliate 8,449 18,037 3,562 (9,588) 14,475

Internalization fee to affiliate 300,000 — — 300,000 —

Depreciation and amortization 218,064 169,877 152,917 48,187 16,960

Asset impairment 962 2,121 137,219 (1,159) (135,098)

Interest expense 161,639 169,194 155,017 (7,555) 14,177

Gain on sale of assets, net (18,705) — (77,211) (18,705) 77,211

Total expenses 1,497,074 831,224 624,507 665,850 206,717

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Equity in losses of unconsolidated entities (2,200) (1,606) (369) (594) (1,237)

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

Interest expense (221,721) (161,639) (169,194) (60,082) 7,555

Loss on extinguishment of debt (17,101) — (19,859) (17,101) 19,859

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

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

Other income 17,364 7,590 207 9,774 7,383

Total other expense (223,658) (155,655) (189,215) (68,003) 33,560

Income (loss) from continuing operations before income taxes 14,169 184,017 (105,311) (169,848) 289,328

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

Provision for (benefit from) income taxes 5,487 (59,800) 5,300 65,287 (65,100)

Net income (loss) from continuing operations 8,682 243,817 (110,611) (235,135) 354,428

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

Continuing operations — — — — —

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

Dividends on preferred shares 32,763 31,795 27,164 968 4,631

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

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

Loss on redemption of preferred shares 7,998 — — 7,998 $ —

Net (loss) income attributable to shareholders $ (32,079) $ 212,022 $ (220,374) $ (244,101) $ 432,396

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

Year Ended December 31, Change

(in thousands) 2024 2023 2022 '24 vs '23 '23 vs '22

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

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

Net (loss) income attributable to shareholders from continuing operations $ (32,079) $ 212,022 $ (137,775) $ (244,101) $ 349,797

Provision for (benefit from) income taxes 5,487 (59,800) 5,300 65,287 (65,100)

Equity-based compensation expense 6,006 1,638 — 4,368 1,638

Acquisition and transaction expenses 32,296 15,194 13,207 17,102 1,987

Losses on the modification or extinguishment of debt and capital lease obligations — 19,859 3,254 (19,859) 16,605

Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations 25,099 — 19,859 25,099 (19,859)

Changes in fair value of non-hedge derivative instruments — — — — —

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Interest expense and dividends on preferred shares 254,484 193,434 196,358 61,050 (2,924)

Internalization fee to affiliate 300,000 — — 300,000 —

Pro-rata share of Adjusted EBITDA from unconsolidated entities (2)

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(i) net loss of $2,200, $1,606 and $369, (ii) depreciation and amortization expense of $308, $1,488 and $409 and (iii) acquisition and transaction expense of $0, $428 and $0, respectively.

Presentation of assets sales

Presentation of aircraft and engine 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 is accounted for in accordance with ASC 606.

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

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

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

The sale of CFM56-7B, CFM56-5B and V2500 engines are included in the Aerospace Products Segment and the sale of aircraft and other engines are included in the Aviation Leasing Segment.

The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statements 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 Statements 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 years ended December 31, 2024 and 2023

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

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

See above discussion regarding presentation of asset sales.

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

See above discussion regarding presentation of asset sales.

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

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

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

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

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

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

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

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

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

Operating expenses decreased $22.1 million primarily due to:

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

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

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

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

Total revenue s increased by $564.0 million, dr iven by the following:

• Aerospace products revenue increased by $624.9 million, primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B and V2500 engine and module sales, a $28.5 million increase in parts inventory sales, and other revenues of $47.7 million from the QuickTurn and LMCES acquisitions.

• Lease income increased by $47.4 million, primarily due to an increase in engine lease revenue of $37.3 million and an increase in aircraft lease revenue of $17.5 million, driven by an increased number of aircraft and engines on lease.

This was partially offset by a decrease of $7.3 million in the Offshore Energy business driven by one of our vessels having fewer days on-hire in 2024 compared to 2023, as well as the sale of the two vessels during 2024.

• Maintenance revenue increased by $9.5 million.

Engine maintenance revenue increased by $43.2 million, driven by an increased number of engines on lease in 2024 as compared to 2023.

This increase was partially offset by a decrease in aircraft maintenance revenue of $32.7 million, primarily due to $20.1 million of higher maintenance reserves taken into revenue in 2023, partially offset by an increased number of aircraft on lease in 2024.

• Asset sales revenue decreased by $111.0 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines.

Specifically, three aircraft and 14 engines were sold in 2024 as compared to 13 aircraft and 41 engines sold in 2023.

• Other revenue decreased by $6.7 million, primarily due to a decrease in assets with end-of-lease redelivery compensation.

During 2024, one aircraft and three engines had end-of-lease redelivery compensation, as compared to eight aircraft and four engines in 2023.

Total expenses increased $665.9 million, driven by the following:

• Cost of sales increased by $323.8 million, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period.

This was partially offset by a decrease of $69.9 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines, which is in line with an overall decrease in the corresponding asset sales revenue.

• Internalization fee to affiliate increased by $300.0 million relating to the Internalization effective May 28, 2024.

• Depreciation and amortization increased by $48.2 million, primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered.

• Acquisition and transaction expenses increased by $17.1 million, primarily due to higher professional fees incurred in evaluating and completing strategic transactions and fees associated with the Internalization and the acquisition of LMCES in Q3 2024.

• Operating expenses increased by $5.7 million, primarily due to the acquisition of LMCES in Q3 2024.

• Gain on sale of assets, net increased $18.7 million driven by the sale of two vessels within the Offshore Energy business during the fourth quarter of 2024.

• Management fees and incentive allocation to affiliate decreased by $9.6 million, due to a decrease in management and incentive fees to the Former Manager during 2024, with the Internalization effective May 28, 2024.

Other income (expense)

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

(Benefit from) provision for income taxes

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

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

Total other expense increased by $68.0 million due to the following:

• Interest expense increased by $60.1 million, reflecting an increase in the average debt outstanding of approximately $779.3 million, primarily due to increases in (i) the Senior Notes due 2030 of $414.1 million, issued in November 2023 (ii) Senior Notes due 2031 of $525.0 million, issued in April 2024 (iii) Senior Notes due 2032 of $466.7 million, issued in June 2024, (iv) Senior Notes due 2033 of $124.4 million, issued in October 2024, partially offset by decreases in the (v) Senior Notes due 2025 of $489.6 million, which were redeemed in April 2024, (vi) Senior Notes due 2027 of $189.8 million, which were fully redeemed in October 2024, and the (vii) Revolving Credit Facility of $70.4 million.

• Loss on extinguishment of debt increased by $17.1 million, primarily due to the redemption of the Senior Notes due 2025 and Senior Notes due 2027.

• Other income increased by $9.8 million, primarily driven by a $10.8 million insurance settlement received within our Aviation Leasing Segment.

Provision for (benefit from) income taxes

The Provision for income taxes increased $65.3 million, primarily due to the benefit from income taxes recorded in 2023 in connection with a tax law change in Bermuda as well as the increase in income from leasing and Aerospace Products activities in jurisdictions subject to taxes.

As the company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

This increase was partially offset by the tax benefit from the Internalization fee paid to the affiliate.

Net income (loss) from continuing operations

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

Net loss from discontinued operations

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

Net income from continuing operation s decreased by $235.1 million, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

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

Adjusted EBITD A increased by $264.8 million, primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

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

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

Total revenues increased by $462.5 million, driven by the following:

• Aerospace products revenue increased by $276.5 million, primarily due to a $213.0 million increase in CFM56-7B, CFM56-5B and V2500 engines and module sales, a $44.7 million increase in parts inventory sales, $16.7 million increase due to engine management contracts, and other sales revenue of $2.0 million from the QuickTurn acquisition.

See above discussion regarding presentation of asset sales.

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

• Asset sales revenue increased by $119.6 million, primarily due to an overall increase in the number of material sales transactions of commercial aircraft and engines.

Specifically, 13 aircraft and 41 engines were sold in 2023 as compared to eight aircraft and 71 engines sold in 2022.

See above discussion regarding presentation of asset sales.

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

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

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

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

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

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

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

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

• Maintenance revenue increased $42.5 million.

Engine maintenance revenue increased by $26.5 million, driven by an increased number of engines on lease in 2023 as compared to 2022.

Aircraft maintenance revenue increased $16.0 million primarily due to $20.1 million of maintenance reserves taken into revenue due to the early redelivery of five aircraft, partially offset by less aircraft on lease.

• Lease income increased by $28.6 million, primarily due to an increase in engine lease revenue of $19.7 million, driven by an increased number of engines on lease, partially offset by an increase in the number of engines redelivered.

An increase of $7.4 million in the Offshore Energy business due to one of our vessel being on-hire longer in 2023 compared to 2022, and with a charterer at higher rates.

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

During 2023, eight aircraft and four engines had end-of-lease redelivery compensation, as compared to 18 aircraft and one engine in 2022.

Total expense s increased by $206.7 million, driven by the following:

• Cost of sales increased by $253.7 million, primarily due to an increase of $170.8 million in our Aerospace Products segment, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period.

An increase of $82.9 million in the Aviation Leasing segment primarily due to an overall increase in the number of material sales transactions of commercial aircraft and engines, as well as the gross presentation of asset sales revenues and related costs of sales as described above.

• Gain on sale of assets, net decreased by $77.2 million, primarily due to the change in presentation of asset sales recorded during 2022.

See above discussion regarding presentation of asset sales and impact on Gain on sale of assets, net.

• Depreciation and amortization increased by $17.0 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.

• Management fees and incentive allocation to affiliate increased by $14.5 million, primarily due to a $13.6 million increase in incentive fee due to the Former Manager driven by an increase in net income.

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

See Note 6 to the consolidated financial statements for additional information.

Operating expenses increased $72.6 million primarily due to:

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

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

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

Interest expense increased $14.2 million, which reflects an increase in the average outstanding debt of approximately $354.7 million due to increases in (i) the Senior Notes due 2028 of $459.7 million, (ii) the 2021 Bridge Loans issued in December 2021 and February 2022 of $169.9 million and (iii) the Revolving Credit Facility of $49.7 million, partially offset by a decrease in (iv) the Bridge Loans of $108.3 million, (v) the Senior Notes due 2022 of $133.1 million, which was redeemed in full in May 2021, and (vi) the Senior Notes due 2025 of $83.2 million, which were partially redeemed in August 2022.

Depreciation and amortization increased $5.2 million primarily driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

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

Acquisition and transaction expenses decreased $4.7 million primarily due to a decrease in professional fees related to the Transtar acquisition in 2021.

• Operating expenses decreased by $22.1 million, primarily due to the following:

• a decrease of $43.4 million in the Aviation Leasing segment primarily as a result of a $41.4 million decrease in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, a $2.5 million decrease in shipping and storage fees and repairs and maintenance expenses, partially offset by a $1.2 million increase in insurance expense.

• an increase of $12.8 million in the Offshore Energy business which reflects increases in offshore crew expenses of $2.1 million, project costs of $3.9 million and other operating expenses of $1.3 million for one of our vessels driven by increased cost of operations based on the operating location of the vessel, as well as increased number of days on-hire.

Additionally, repairs and maintenance expense increased $0.6 million due to repairs on one of our vessels.

• an increase of $8.5 million in the Aerospace Products segment primarily due to a $7.2 million increase in commission expenses due to the increase in sales from the used material program as well as $1.2 million increase in shipping and storage fees as operations continued to ramp-up in 2023.

Other income (expense)

Total other income increased $13.3 million primarily due to (i) an increase of $28.2 million in Gain on sale of assets, net in the Aviation Leasing and Aerospace Products segments from more opportunistic asset sales transactions, partially offset by (ii) an increase of $16.6 million in loss on extinguishment of debt primarily related to the 2022 paydown of the 2021 Bridge Loan and the partial redemption of the Senior Notes due 20 25 in connection with the spin-off of FTAI Infrastructure.

See above discussion regarding presentation of asset sales and impact on Gain on sales of assets, net.

Provision for income taxes

The provision for income taxes increased $2.2 million primarily due to a higher provision in the Aerospace Products segment.

Net loss from continuing operations

Net loss from continuing operations increased $67.8 million primarily due to the changes noted above.

Total other expense decreased by $33.6 million, due to the following:

• Loss on extinguishment of debt of $19.9 million was recognized during 2022.

This loss was related to the pay-down of the 2021 Bridge Loan, issued in December 2021 and February 2022, and the partial redemption of Senior Notes due 2025.

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

• Other income increased $7.4 million primarily driven by a $5.3 million gain on consolidation of investment in connection with the QuickTurn acquisition within our Aerospace Products Segment and $1.0 million of interest income from the Company’s investments in money market funds.

Provision for (benefit from) income taxes

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

See Note 12 to the consolidated financial statements for additional information.

The benefit was offset by a $7.1 million increase from income taxes primarily attributable to an increase in income generated from operating activities in jurisdictions subject to taxes.

As the Company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

Net income (loss) from continuing operations

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

Net loss from discontinued operations

Net loss from discontinued operations increased $13.6 million primarily due to:

• An increase in net loss of $34.7 million in the Ports and Terminals business in 2022 of which $32.6 million relates to our equity pick-up in net losses for the Long Ridge investment.

• An increase in acquisition and transaction expense of $11.9 million during 2022 related to the spin-off of the infrastructure business;

• Offset by a decrease in net loss of $22.6 million in the Jefferson business in 2022 which is primarily driven by seven months of activity during 2022 compared to a full year of activity in 2021;

• An increase in net income of $8.4 million on the Transtar business, which was acquired on July 28, 2021.

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

Adjusted EBITDA (Non-GAAP)

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

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

Aviation Leasing Segment

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

As of December 31, 2024, in our Aviation Leasing segment, we own and manage 421 aviation assets, consisting of 109 commercial aircraft and 312 engines, including eight aircraft and seventeen engines that were still located in Russia.

As of December 31, 2024, 94 of our commercial aircraft and 181 of our engines were leased to operators or other third parties.

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Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 22 months.

The table below provides additional information on the assets in our Aviation Leasing segment:

The table below provides additional information on the assets in our Aviation Leasing segment, including transfers which involve aircraft breakdowns, engine transfers from leasing equipment to inventory for manufacturing and sales, and engine transfers from inventory to leasing equipment for rebuilding and sales:

Aviation Assets Widebody Narrowbody Total

22 unchanged sentences

Asset impairment 962 2,121 137,219 (1,159) (135,098)

Gain on sale of assets, net — — (59,048) — 59,048

Total expenses 399,671 427,353 444,488 (27,682) (17,135)

1 unchanged sentence

Equity in (losses) earnings of unconsolidated entities (207) (148) 740 (59) (888)

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

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

Other income 14,669 1,300 246 13,369 1,054

Total other income 14,462 1,152 986 13,310 166

Income before income taxes 243,228 255,410 59,446 (12,182) 195,964

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

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

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

Provision for (benefit from) income taxes 32,979 (36,193) 2,502 69,172 (38,695)

Net income attributable to shareholders $ 210,249 $ 291,603 $ 56,944 $ (81,354) $ 234,659

3 unchanged sentences

Net income attributable to shareholders $ 210,249 $ 291,603 $ 56,944 $ (81,354) $ 234,659

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

Provision for (benefit from) income taxes 32,979 (36,193) 2,502 69,172 (38,695)

Equity-based compensation expense 584 337 — 247 337

Acquisition and transaction expenses 9,740 7,150 1,923 2,590 5,227

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

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

Changes in fair value of non-hedge derivative instruments — — — — —

15 unchanged sentences

Comparison of the years ended December 31, 2024 and 2023

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

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

See above discussion regarding presentation of asset sales.

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

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

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

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

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

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

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

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

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

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

Total revenues decreased by $53.2 million, driven by the following:

• Asset sales revenue decreased by $111.0 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines.

Specifically, three aircraft and 14 engines were sold in 2024 as compared to 13 aircraft and 41 engines sold in 2023.

• Other revenue decreased by $6.4 million, primarily due to a decrease in end-of-lease redelivery compensation.

During 2024, one aircraft and three engines had end-of-lease redelivery compensation, as compared to eight aircraft and four engines in 2023.

• Lease income increased by $54.7 million, due to an increase in engine lease revenue of $37.3 million and an increase in aircraft lease revenue of $17.5 million, driven by an increased number of engines and aircraft on lease.

• Maintenance revenue increased by $9.5 million.

Engine maintenance revenue increased by $43.2 million, driven by an increased number of engines on lease in 2024 as compared to 2023.

Total expenses decreased by $27.7 million, driven by the following:

• Cost of sales decreased by $69.9 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines and is in line with an overall decrease in the corresponding asset sales revenue.

Specifically, three aircraft and 14 engines were sold in 2024 compared to 13 aircraft and 41 engines sold in 2023.

• Operating expenses decreased by $2.4 million, primarily driven by a decrease in bad debt expense of $5.9 million, partially offset by increases in legal fees of $2.7 million and repairs and maintenance expense of $1.0 million.

• Depreciation and amortization expense increased by $43.1 million, driven by an increase in the number of assets owned and on lease, partially offset by an increase in the number of aircraft redelivered and parted out into our engine leasing pool.

• Acquisition and transaction expen ses increased by $2.6 million, primarily due to higher legal fees incurred in evaluating and completing strategic transactions.

Other income (expense)

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

(Benefit from) provision for income taxes

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

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

Total other incom e increased by $13.3 million primarily driven by a $10.8 million insurance settlement as well as a $3.9 million increase in interest income earned on financing receivables during 2024.

Provision for (benefit from) income taxes

The Provisio n for income taxes increased by $69.2 million, primarily due to the benefit from income taxes recorded in 2023 in connection with a tax law change in Bermuda as well as the increase in income from leasing activities in jurisdictions subject to taxes.

As the company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

Net income decreased by $81.4 million, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

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

Adjusted EBITDA increased by $32.7 million, primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

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

• Asset sales revenue increas ed $183.5 million primarily due to an increase in the sale of commercial aircraft and engines during 2022.

Total revenues increased by $178.7 million, driven by the following:

• Asset sales revenue increas ed by $119.6 million, primarily d ue to an increase in the number of material sales transactions of commercial aircraft and engines.

Specifically, 13 aircraft and 41 engines were sold in 2023 as compared to eight aircraft and 71 engines sold in 2022.

See above discussion regarding presentation of asset sales.

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

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

• Lease income decreased $4.7 million primarily due to the early termination of aircraft and engine leases as a result of the sanctions imposed on Russian airlines during the first quarter of 2022.

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

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

Total expenses increased $319.7 million primarily driven by an increase in cost of sales, asset impairment, operating expenses and depreciation and amortization expense.

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

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

• Maintenance revenue increased by $42.5 million.

Engine maintenance revenue increased by $26.5 million, driven by an increased number of engines on lease in 2023 as compared to 2022.

Aircraft maintenance revenue increased $16.0 million, primarily due to $20.1 million of higher maintenance reserves taken into revenue due to the early redelivery of five aircraft, partially offset by less aircraft on lease.

• Lease income increased by $20.6 million, primarily due to an increase in engine lease revenue of $19.7 million, driven by an increased number of engines on lease, partially offset by an increase in the number of engines redelivered.

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

During 2023, eight aircraft and four engines had end-of-lease redelivery compensation, as compared to 18 aircraft and one engine in 2022.

Total expenses decreased by $17.1 million, driven by the following:

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

See Note 6 to the consolidated financial statements for additional information.

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

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

Other income (expense)

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

• Operating expenses decreased by $43.4 million, primarily driven by the $41.4 million decrease in provision for credit losses as a result of the sanctions imposed on Russian airlines in 2022, a $2.5 million decrease in shipping and storage fees and repairs and maintenance expenses, partially offset by a $1.2 million increase in insurance expense.

• Cost of sales increased by $82.9 million, primarily due to an overall increase in the number of material sales transactions of commercial aircraft and engines, as well as the gross presentation of asset sales revenues and related costs of sales as described above.

Specifically, 13 aircraft and 41 engines were sold in 2023 as compared to eight aircraft and 71 engines sold in 2022.

• Gain on sale of assets, net decreased by $59.0 million, due to the change in presentation of asset sales recorded during 2022.

See above discussion regarding presentation of asset sales and impact on Gain on sale of assets, net.

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

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

Provision for (benefit from) income taxes

See Note 12 to the consoli dated financial statements for additional information.

The benefit was offset by a $7.9 million increase from income taxes primarily attributable to an increase in income generated from leasing activities in jurisdictions subject to taxes.

As the Company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $58.7 million primarily due to the changes noted above.

Adjusted EBITDA increased by $87.2 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.

The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines .

Our engine, module and parts sales are facilitated through a dedicated commercial maintenance program, designed to focus on modular and parts repair and refurbishment of CFM56-7B, CFM56-5B and V2500 engines.

In September 2024, we acquired LMCES to further enhance this business and establish permanent engine and module manufacturing capabilities.

Refer to Note 4 “Acquisition of Lockheed Martin Commercial Engine Solutions”, for additional information.

In addition, other serviceable used modules and parts are sold through our ex clusive partnership, who is responsible for the teardown, repair, marketing and sales of parts from our CFM56 engine pool.

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.

9 unchanged sentences

Depreciation and amortization 6,630 661 258 5,969 403

Gain on sale of assets, net — — (18,163) — 18,163

Total expenses 709,261 303,122 103,786 406,139 199,336

1 unchanged sentence

Equity in losses of unconsolidated entities (1,993) (1,458) (1,109) (535) (349)

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

Other income — 5,347 — (5,347) 5,347

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

Total other (expense) income (1,993) 3,889 (1,109) (5,882) 4,998

Income before income taxes 368,567 155,737 73,620 212,830 82,117

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

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

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

Provision for (benefit from) income taxes 22,221 (24,440) 2,961 46,661 (27,401)

Net income attributable to shareholders $ 346,346 $ 180,177 $ 70,659 $ 166,169 $ 109,518

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Net income attributable to shareholders $ 346,346 $ 180,177 $ 70,659 $ 166,169 $ 109,518

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

Provision for (benefit from) income taxes 22,221 (24,440) 2,961 46,661 (27,401)

Equity-based compensation expense 309 225 — 84 225

Acquisition and transaction expenses 4,906 1,722 243 3,184 1,479

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

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

Changes in fair value of non-hedge derivative instruments — — — — —

12 unchanged sentences

Comparison of the years ended December 31, 2024 and 2023

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

See above discussion regarding presentation of asset sales.

Total expenses increased $181.2 million primarily due to an increase in costs of sales and operating expenses.

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

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

Other income (expense)

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

See above discussion regarding presentation of asset sales.

(Benefit from) provision for income taxes

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

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

Total Aerospace products revenue increased by $624.9 million, primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B and V2500 engine and module sales, a $28.5 million increase in parts inventory sales, and other revenues of $47.7 million from the QuickTurn and LMCES acquisitions.

Total expenses increased by $406.1 million, due to the following:

• Cost of sales increased by $393.6 million, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period.

• Depreciation and amortization increased by $6.0 million due to the acquisitions of LMCES in Q3 2024 and QuickTurn in Q4 2023.

• Operating expenses increased by $3.4 million, primarily due to the acquisition of LMCES in Q3 2024.

• Acquisition and transaction expenses increased by $3.2 million, primarily driven by higher professional fees incurred in evaluating and completing strategic transactions.

Provision for (benefit from) income taxes

The Provision for income taxes increased by $46.7 million, primarily due to the benefit from income taxes recorded in 2023 in connection with a tax law change in Bermuda as well as the increase in income from Aerospace Products activities in jurisdictions subject to taxes.

As the company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

Net income increased by $166.2 million, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $85.7 million primarily due to the changes noted above.

Adjusted EBITDA increased by $220.6 million, primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

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

Total Aerospace products revenue increased by $276.5 million, primarily due to a $213.0 million increase in CFM56-7B, CFM56-5B and V2500 engine and module sales, a $44.7 million increase in parts inventory sales, $16.7 million increase in revenue from engine management contracts, and other revenues of $2.0 million from the QuickTurn acquisition.

See above discussion regarding presentation of asset sales.

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

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

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

Total expenses increased by $199.3 million, primarily due to the following:

• Cost of sales increased by $170.8 million, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period and the gross presentation described above.

• Gain on sale of assets, net decreased by $18.2 million, primarily due to t he change in presentation of asset sales recorded during 2022.

See above discussion regarding presentation of asset sales and impact on Gain on sale of assets, net.

• Operating expenses increased by $8.5 million, primarily due to a $7.2 million increase in commission expenses due to the increase in sales from the used material program as well as a $1.2 million increase in shipping and storage fees as operations continued to ramp-up in 2023.

Other income (expense)

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

See above discussion regarding presentation of asset sales.

Total other income increased $5.0 million, which primarily reflects an increase of $5.3 million in gain on consolidation of investment in connection with the QuickTurn acquisition, offset by an increase of $0.3 million in our proportionate share of unconsolidated entities’ net loss.

Provision for (benefit from) income taxes

See Note 12 to the consolidated financial statements for additional information.

Net income increased by $109.5 million, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA increased $51.6 million primarily due to the changes noted above.

Adjusted EBITDA increased by $85.7 million, primarily due to the changes noted above.

Corporate and Other

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Management fees and incentive allocation to affiliate 8,449 18,037 3,562 (9,588) 14,475

Internalization fee to affiliate 300,000 — — 300,000 —

Depreciation and amortization 9,937 10,862 8,401 (925) 2,461

Interest expense 161,639 169,194 155,017 (7,555) 14,177

Gain on sale of assets, net (18,705) — — (18,705) —

Total expenses 388,142 100,749 76,233 287,393 24,516

1 unchanged sentence

Loss on extinguishment of debt (17,101) — (19,859) (17,101) 19,859

Interest expense (221,721) (161,639) (169,194) (60,082) 7,555

Other income (expense) 2,695 943 (39) 1,752 982

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

Total other expense (236,127) (160,696) (189,092) (75,431) 28,396

Loss before income taxes (597,626) (227,130) (238,377) (370,496) 11,247

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

(Benefit from) provision for income taxes (49,713) 833 (163) (50,546) 996

Net loss (547,913) (227,963) (238,214) (319,950) 10,251

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

Dividends on preferred shares 32,763 31,795 27,164 968 4,631

Loss on redemption of preferred shares 7,998 — — 7,998 —

Net loss attributable to shareholders from continuing operations $ (588,674) $ (259,758) $ (265,378) $ (327,948) $ 5,620

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Net loss attributable to shareholders from continuing operations $ (588,674) $ (259,758) $ (265,378) $ (328,916) $ 5,620

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

(Benefit from) provision for income taxes (49,713) 833 (163) (50,546) 996

Equity-based compensation expense 5,113 1,076 — 4,037 1,076

Acquisition and transaction expenses 17,650 6,322 11,041 11,328 (4,719)

Losses on the modification or extinguishment of debt and capital lease obligations — 19,859 3,254 (19,859) 16,605

Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations 25,099 — 19,859 25,099 (19,859)

Changes in fair value of non-hedge derivative instruments — — — — —

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Interest expense and dividends on preferred shares 254,484 193,434 196,358 61,050 (2,924)

Internalization fee to affiliate 300,000 — — 300,000 —

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

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Comparison of the years ended December 31, 2024 and 2023

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

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

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

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

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

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

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

Total revenues decreased by $7.7 million, primarily due to a $7.3 million decrease in the Lease income.

Lease income declined primarily due to one of our vessels in the Offshore Energy business having fewer days on-hire in 2024 compared to 2023, as well as the sale of the two vessels during 2024.

Total expenses increased by $287.4 million, due to the following:

• Internalization fee to affiliate increased by $300.0 million for the Internalization effective May 28, 2024.

• Acquisition and transaction expenses increased by $11.3 million, primarily due to higher legal and other professional fees incurred for the Internalization on May 28, 2024 and the acquisition of LMCES on September 9, 2024.

• Gain on sale of assets, net, increased $18.7 million due to the sale of the two vessels within the Offshore Energy business.

Other income (expense)

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

Total other expense increased by $75.4 million, due to the following:

• Loss on extinguishment of debt increased by $17.1 million, driven by the redemption of Senior Notes due 2025 and a redemption of Senior Notes due 2027.

• Other income increased by $1.8 million, driven by interest income generated from the Company’s investments in money market funds.

(Benefit from) provision for income taxes

The benefit from income taxes increased by $50.5 million.

This increase was primarily attributable to a substantial tax benefit arising from the Internalization fee paid to the affiliate.

The fee provided a favorable impact on the company's overall tax position.

Net loss increased by $320.0 million, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

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

Adjusted EBIT DA increased by $11.5 million, primarily due to the changes noted above.

Comparison of the years ended December 31, 2023 and 2022

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

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

• Interest expense increased $14.2 million , which reflects an increase in the average outstanding debt of approximately $354.7 million due to increases in (i) the Senior Notes due 2028 of $459.7 million, (ii) the 2021 Bridge Loans issued in December 2021 and February 2022 of $169.9 million and (iii) the Revolving Credit Facility of $49.7 million, partially offset by a decrease in (iv) the Bridge Loans of $108.3 million, (v) the Senior Notes due 2022 of $133.1 million, which was redeemed in full in May 2021, and (vi) the Senior Notes due 2025 of $83.2 million, which were partially redeemed in August 2022.

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

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

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

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

Total expenses increased by $24.5 million, due to the following:

• Operating expenses increased by $12.8 million, primarily due to increases in the Offshore Energy business, driven by increases in offshore crew expenses of $2.1 million, project costs of $3.9 million and other operating expenses of $1.3 million for one of our vessels.

The increase in the other operating expenses were driven by the operational location of the vessel, as well as the increased number of days on-hire.

Additionally, repairs and maintenance expense increased $0.6 million due to repairs on one of our vessels.

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

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

Other income (expense)

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

Total other expense decreased by $28.4 million, due to the following:

• Loss on extinguishment of debt decreased by $19.9 million driven by the 2022 pay-down of the 2021 Bridge Loans and the partial redemption of the Senior Notes due 2025.

Net loss decreased by $10.3 million, primarily due to the changes noted above.

Adjusted EBITDA (Non-GAAP)

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Transactions with Affiliates and Affiliated Entities

We are managed by the Manager, an affiliate of Fortress, pursuant to the Management Agreement which provides for us to bear obligations for management fees and expense reimbursements payable to the Manager.

Our Management Agreement requires our Manager to manage our business affairs in conformity with a broad asset acquisition strategy adopted and monitored by our board of directors.

From time to time, we may engage (subject to our strategy) in material transactions with our Manager or another entity managed by our Manager or one of its affiliates or other affiliates of Fortress, which may include, but are not limited to, certain financing arrangements, acquisition of assets, acquisition of debt obligations, debt, co-investments, and other assets that present an actual, potential or perceived conflict of interest.

Please see Note 12 to our consolidated financial statements included elsewhere in this filing for more information.

Prior to May 28, 2024, FTAI Aviation Ltd.

operated under the Management Agreement with the Former Manager, and the Master GP, each an affiliate of Fortress.

For their services, the Former Manager was entitled to management fees and the Master GP was entitled to certain incentive allocations, both defined in, and in accordance with the terms of, the Management Agreement.

On May 28, 2024, the Company entered into the Internalization Agreement, pursuant to which the Management Agreement was terminated effective May 28, 2024 (the “Effective Date”), except that certain indemnification and other obligations survive, and the Company internalized its management functions (such transactions, the “Internalization”).

As a result of the Internalization, the Company ceased to be externally managed and operates as an internally managed company.

In connection with the termination of the Management Agreement, the Company (i) agreed to pay the Former Manager (for itself and on behalf of the Master GP, as applicable) $150.0 million (the “Cash Consideration”), the compensation accrued and payable, but not yet paid, under the Management Agreement, and the expenses that were reimbursable, but not yet reimbursed, under the Management Agreement;

(ii) issued to the Former Manager (for itself and on behalf of the Master GP, as applicable) 1,866,949 ordinary shares of the Company (the “Share Consideration”);

and (iii) purchased from Master GP all of its partnership interests in FTAI Aviation Holdco Ltd., a subsidiary of the Company, in exchange for $30 thousand.

In addition, the Former Manager repaid to the Company certain annual bonus payments due to certain employees of the Former Manager or its affiliates who provide services to the Company with respect to the 2024 calendar year on a pro rata basis.

The Company financed the cash payments through one or more debt financings, along with cash on hand.

Potential conflicts of interest may arise with respect to our decisions regarding how to allocate investment opportunities between us and partnerships in our Strategic Capital Initiative.

Allocating investment opportunities appropriately frequently involves significant and subjective judgments.

Investors in our Strategic Capital Initiative and our shareholders may perceive conflicts of interest regarding such investment decisions, which could harm our reputation with such investors and our shareholders.

See “Risks Related to Our Business-Our Strategic Capital Initiative involves certain risks which could adversely affect our business, prospects, financial condition, results of operations and cash flows.”

Geographic Information

Please refer to Note 13 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers, for the years ended December 31, 2023, 2022 and 2021, as well as a report of our total property, plant and equipment as of December 31, 2023 and 2022.

Please refer to Note 14 of our consolidated financial statements included in Item 8 in this Annual Report on Form 10-K for a report, by geographic area for each segment, of revenues from our external customers and lessees, for the years ended December 31, 2024, 2023 and 2022, as well as a report of our total property, plant and equipment as of December 31, 2024 and 2023.

Liquidity and Capital Resources

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

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

On October 9, 2024, we issued $500.0 million aggregate principal amount of senior unsecured notes due 2033.

Using a portion of the net proceeds, the Company redeemed the remaining $130.5 million aggregate principal amount of Senior Notes due 2027, plus accrued and unpaid interest.

The Company used the remaining net proceeds to pay down in full the Company’s Revolving Credit Facility, with any excess proceeds intended for general corporate purposes, including funding acquisitions and investments.

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

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

On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors.

The Strategic Capital Initiative, and its related partnerships, will allow us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale.

We have agreed that the related partnerships will be the primary buyer of on-lease 737NG and A320ceo aircraft.

We expect to provide aircraft management services to the related partnerships for which the Company will receive customary, market-based compensation.

The Company also expects to make minority investment in the related partnerships.

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 $861.5 million, $831.5 million and $1.5 billion during the years ended December 31, 2023, 2022, and 2021, respectively.

In the future, instead of acquiring on-lease aircraft directly, as part of the Strategic Capital Initiative, we will invest in the related partnerships and such partnerships will acquire on-lease aircraft.

• Cash used for the purpose of making investments was $1,526.2 million, $861.5 million and $831.5 million during the years ended December 31, 2024, 2023, and 2022, respectively.

• Distributions to shareholders, including cash dividends, were $154.3 million, $151.6 million and $155.6 million during the years ended December 31, 2024, 2023 and 2022, respectively.

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• Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $(136.5) million, $163.0 million and $29.4 million during the years ended December 31, 2024, 2023, and 2022, respectively.

• During the year ended December 31, 2024, additional borrowings were obtained in connection with the (i) Senior Notes due 2033 of $500.0 million, (ii) Senior Notes due 2032 of $800.0 million, (iii) Senior Notes due 2031 of $700.0 million and (iv) Revolving Credit Facility of $745.0 million.

We made total principal repayments of (i) $650.0 million related to the Senior Notes due 2025, (ii) $745.0 million relating to the Revolving Credit Facility and (iii) $400.0 million related to the Senior Notes due 2027.

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

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We made total principal repayments of (i) $604.5 million relating to the Revolving Credit Facility, (ii) $340.0 million related to the 2021 Bridge Loans and (iii) $200.0 million related to the Senior Notes due 2025.

During the year ended December 31, 2021, additional borrowings were obtained in connection with the (i) Senior Notes due 2028 of $1.0 billion, (ii) Revolving Credit Facility of $690.0 million, (iii) Bridge Loan Agreement of $650.0 million, (iv) Series 2021 Bonds of $425.0 million, (v) 2021 Bridge Loans of $100.5 million and (vi) EB-5 Loan Agreement of $26.1 million.

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

• Proceeds from the sale of assets were $969.3 million, $477.9 million and $414.2 million during the years ended December 31, 2024, 2023, and 2022, respectively.

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

There were no issuances of ordinary shares in 2023 or 2022.

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

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

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

There were no issuances of preferred shares during the years ended December 31, 2024 and 2022.

In October 2024, the Company redeemed in full the outstanding Series A preferred shares at a redemption price equal to $25.00 per share in cash, plus $1.6 million of accumulated and unpaid distributions thereon to, but not including, the redemption date of October 29, 2024.

On May 28, 2024, we entered into definitive agreements with the Former Manager and Master GP to internalize our management function.

As part of the termination of the Management Agreement, we agreed to pay $150.0 million to the Former Manager.

Following the internalization of management on May 28, 2024, we no longer pay a management fee or incentive distribution to the Former Manager or Master GP.

Consequently, we have assumed general and administrative, and compensation and benefit expenses directly.

We anticipate a savings in operation costs as a result of the Internalization.

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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Comparison of the years ended December 31, 2024 and 2023

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

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

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

Net cash used in operating activities increased $316.9 million, which primarily reflects (i) a decrease in our Net income of $235.1 million and increases in (ii) Changes in working capital of $178.5 million and (iii) Gain on sale of assets of $217.2 million, partially offset by certain adjustments to reconcile net income to cash used in operating activities including increases in (iv) Non-cash termination fee to affiliate (issuance of ordinary shares) of $150.0 million, (v) Deferred income taxes of $61.7 million, (vi) Depreciation and amortization of $48.2 million, a decrease in (vii) Security deposits and maintenance claims included in earnings of $23.8 million, an increase in (viii) Loss on extinguishment of debt of $17.1 million and a decrease in (ix) Other of $6.4 million

Net cash used in investing activities increased $96.1 million primarily due to increases in (i) Acquisition of leasing equipment of $397.6 million, (ii) Deposits for leasing equipment of $134.4 million, (iii) Acquisition of business, net of cash acquired of $118.0 million and (iv) Investments in financing receivables of $66.9 million, partially offset by higher (v) Proceeds from sale of assets of $491.4 million and (vi) Proceeds (refunds) from deposits on sale of leasing equipment of $78.4 million, and decreases in (vii) Acquisition of lease intangibles of $24.1 million, (viii) Investment in unconsolidated entities of $19.5 million and (ix) Investment in promissory notes of $11.5 million.

Net cash provided by financing activities increased $399.6 million primarily due to increases in (i) Proceeds from debt of $1,630.2 million and (ii) Receipt of maintenance deposits under operating lease agreements of $19.0 million, partially offset by increases in (iii) Repayment of debt of $1,067.3 million and (iv) Redemption of preferred shares of $105.4 million, a decrease in (v) Proceeds from issuance of preferred shares, net of underwriter's discount and issuance costs of $61.7 million, and increases in (vi) Release of maintenance deposits under operating lease agreements of $6.9 million and (vii) Payment of deferred financing costs of $5.2 million.

Cash Flows of Discontinued Operations

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

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

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

Cash used in operating activities from discontinued operations were $63.9 million for the year ended December 31, 2022.

Cash used in investing activities from discontinued operations were $136.3 million for the year ended December 31, 2022.

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

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

Debt Obligations — As of December 31, 2023, we had outstanding principal and interest payment obligations of $2.6 billion and $728.6 million through the maturity date of the debt, respectively, of which only interest payments of $177.4 million are due in the next twelve months.

Debt Obligations — As of December 31, 2024, we had outstanding principal and interest payment obligations of $3.5 billion and $1.4 billion through the maturity date of the debt, respectively, of which only interest payments of $229.8 million are due in the next twelve months.

See Note 9 to the consolidated financial statements for additional information about our debt obligations.

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Revenue is not recognized when collection is not reasonably assured.

When collectability is not reasonably assured, the customer is placed on non-accrual status and revenue is recognized when cash payments are received.

When collectability is not reasonably assured, the lessee is placed on non-accrual status and revenue is recognized when cash payments are received.

Generally, under our aircraft lease and engine agreements, the lessee is required to make periodic maintenance payments calculated based on the lessee’s utilization of the leased asset or at the end of the lease.

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See Note 14 for additional information.

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

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

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

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

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

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

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

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In the event we are required to make payments at the end of the lease for redelivery conditions, amounts are accrued as additional maintenance liability and expensed when we are obligated and can reasonably estimate such payments.

Property, Plant and Equipment, Leasing Equipment and Depreciation —Property, plant and equipment and leasing equipment are stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over estimated useful lives, to estimated residual values which are summarized as follows:

Leasing Equipment and Depreciation —Leasing equipment is stated at cost (inclusive of capitalized acquisition costs, where applicable) and depreciated using the straight-line method, over estimated useful lives, to estimated residual values which are summarized as follows:

Asset Range of Estimated Useful Lives Residual Value Estimates

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Sum of engine core salvage value plus the estimated fair value of life limited parts

Aviation tooling and equipment 3 - 6 years from date of purchase

Scrap value at end of useful life

Offshore energy vessels 25 years from date of manufacture

10% of new build cost

Buildings and improvements 40 to 50 years

Scrap value at end of useful life

Machinery and equipment 6 - 23 years

Scrap value at end of useful life

Furniture and fixtures 3 - 6 years from date of purchase

Computer hardware and software 2 - 5 years from date of purchase

Construction in progress N/A N/A

Other 5 - 7 years

Impairment of Long-Lived Assets —We perform a recoverability assessment of each of our long-lived assets whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable.

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a significant change in market conditions;

or the introduction of newer technology aircraft, vessels or engines.

or the introduction of newer technology and the length of time an asset is off lease related to leasing equipment or engines.

When performing a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceeds its net book value.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis