UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number 001-37386 FTAI AVIATION LTD. (Exact name of registrant as specified in its charter) | Cayman Islands | | 98-1420784 | | | --- | - ...

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) This section presents the cover page details for the Quarterly Report on Form 10-Q [Filing Information](index=1&type=section&id=Filing%20Information) This section details the company's filing status, reporting period, and outstanding ordinary shares as of July 29, 2025 - FTAI Aviation Ltd. is a **large accelerated filer** and not a shell company[2](index=2&type=chunk)[3](index=3&type=chunk)[4](index=4&type=chunk) Filing Information | Metric | Value | | :----- | :---- | | Quarterly Period Ended | June 30, 2025 | | Commission File Number | 001-37386 | | Ordinary Shares Outstanding (July 29, 2025) | 102,570,598 | [Forward-Looking Statements and Risk Factors Summary](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors%20Summary) This section outlines forward-looking statements and summarizes key risk factors affecting the company's operations and financial performance [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section clarifies that the report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements based on current beliefs and assumptions, which are subject to risks and uncertainties[6](index=6&type=chunk)[7](index=7&type=chunk) [Risk Factors Summary](index=2&type=section&id=Risk%20Factors%20Summary) This section summarizes principal risk factors, including economic conditions, operational challenges, and regulatory changes - Key risks include economic conditions, cash flow reductions, acquisition and financing challenges, customer defaults, competition, asset obsolescence, and regulatory changes[7](index=7&type=chunk) - Risks related to the Internalization Agreement with FIG LLC and volatility in share price are also highlighted[10](index=10&type=chunk) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Unaudited Consolidated Financial Statements of FTAI Aviation Ltd.](index=5&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements%20of%20FTAI%20Aviation%20Ltd.) This section provides the unaudited consolidated financial statements and comprehensive notes for FTAI Aviation Ltd [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show increased total assets and shareholders' equity, with key changes in cash, inventory, and leasing equipment Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $301,911 | $115,116 | +$186,795 | | Inventory, net | $752,866 | $551,156 | +$201,710 | | Leasing equipment, net | $1,849,116 | $2,373,730 | -$524,614 | | Investments | $125,713 | $19,048 | +$106,665 | | Total assets | $4,101,075 | $4,037,952 | +$63,123 | | Total liabilities | $3,936,131 | $3,956,584 | -$20,453 | | Shareholders' equity | $164,944 | $81,368 | +$83,576 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues and net income significantly increased for the six months ended June 30, 2025, driven by aerospace products and MRE contract revenue Consolidated Statements of Operations (in thousands, except EPS) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $676,237 | $443,594 | $1,178,317 | $770,288 | | Net income (loss) | $165,398 | $(219,870) | $267,784 | $(180,248) | | Diluted EPS | $1.57 | $(2.26) | $2.44 | $(1.96) | - Aerospace products revenue increased by **$175.5 million** for the three months and **$250.9 million** for the six months ended June 30, 2025, compared to the prior year[16](index=16&type=chunk) - MRE Contract revenue, which was zero in 2024, reached **$69.6 million** for the three months and **$170.2 million** for the six months ended June 30, 2025[16](index=16&type=chunk) [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity significantly increased due to net income, partially offset by dividends and preferred share redemption losses Consolidated Statements of Changes in Equity (in thousands) | Metric | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Total Equity | $81,368 | $164,944 | | Net income (six months) | N/A | $267,784 | | Dividends declared - ordinary shares (six months) | N/A | $(61,534) | | Dividends declared - preferred shares (six months) | N/A | $(9,824) | | Loss on redemption of preferred shares (six months) | N/A | $(6,327) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash outflow decreased, investing cash inflow significantly increased, and financing cash shifted to outflow due to asset sales and debt repayments Cash Flow Activity (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(136,284) | $(187,636) | | Net cash provided by (used in) investing activities | $496,148 | $(219,383) | | Net cash (used in) provided by financing activities | $(173,069) | $485,748 | | Net increase in cash and cash equivalents | $186,795 | $78,729 | - Proceeds from sale of assets to the 2025 Partnership contributed **$397.1 million** to investing activities in 2025, compared to zero in 2024[22](index=22&type=chunk) - Redemption of preferred shares amounted to **$124.2 million** in 2025, impacting financing activities[24](index=24&type=chunk) [Note 1: Organization](index=11&type=section&id=Note%201%3A%20Organization) FTAI Aviation Ltd. provides full-service aircraft engine solutions through two segments and internalized management in May 2024 - FTAI Aviation Ltd. specializes in CFM56-5B, CFM56-7B, and V2500 aircraft engines, serving small and medium-sized airlines globally[27](index=27&type=chunk)[29](index=29&type=chunk) - The company operates two reportable segments: Aviation Leasing and Aerospace Products[29](index=29&type=chunk) - Effective May 28, 2024, FTAI Aviation Ltd. internalized its management functions, terminating the Management Agreement with FIG LLC and Fortress Worldwide Transportation and Infrastructure Master GP LLC[31](index=31&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=11&type=section&id=Note%202%3A%20Summary%20of%20Significant%20Accounting%20Policies) This note details significant accounting policies, including revenue recognition, inventory, credit risk, and assets held for sale - Revenues are recognized under ASC 842 (Leases) and ASC 606 (Revenue from contracts with customers)[40](index=40&type=chunk) - The company launched a Strategic Capital Initiative in partnership with third-party institutional investors, forming the 2025 Partnership to acquire 737NG and A320ceo aircraft[47](index=47&type=chunk)[48](index=48&type=chunk) - Sales to this partnership are non-recurring and accounted for under ASC 610-20[47](index=47&type=chunk)[48](index=48&type=chunk) Other Current Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Notes receivable | $182,720 | $165,338 | | Financing receivable from failed sale-leaseback | $39,606 | $32,486 | | Prepaid expenses | $30,605 | $87,323 | | Purchase deposits | $22,120 | $83,229 | | Maintenance right assets | $20,844 | — | | Tax assets | $19,776 | $31,622 | | Contract asset from the 2025 Partnership | $15,184 | — | | Other | $12,370 | $8,925 | | **Total Other Current Assets** | **$343,225** | **$408,923** | Assets and Liabilities Held for Sale (in thousands) | Category | June 30, 2025 | | :-------------------------- | :------------ | | **Assets held for sale:** | | | Leasing equipment, net | $120,773 | | Intangible assets, net | $158 | | Other non-current assets | $917 | | **Total Assets held for sale** | **$121,848** | | **Liabilities held for sale:** | | | Current maintenance deposits | $19,322 | | Non-current maintenance deposits | $3,456 | | Non-current security deposits | $2,738 | | Other non-current liabilities | $5,367 | | **Total Liabilities held for sale** | **$30,883** | [Note 3: Acquisition of Lockheed Martin Commercial Engine Solutions](index=16&type=section&id=Note%203%3A%20Acquisition%20of%20Lockheed%20Martin%20Commercial%20Engine%20Solutions) FTAI Aviation acquired LMCES for $170.0 million to enhance MRE business and manufacturing, resulting in $71.04 million goodwill - FTAI Aviation acquired Lockheed Martin Commercial Engine Solutions (LMCES) on September 9, 2024, for **$170.0 million**[66](index=66&type=chunk) - The acquisition enhances the MRE business and establishes permanent engine and module manufacturing capabilities in Canada[66](index=66&type=chunk) Allocation of Net Assets Acquired (September 9, 2024, in thousands) | Category | Fair Value | | :-------------------------- | :--------- | | Total assets acquired | $131,510 | | Total liabilities assumed | $28,838 | | Goodwill | $71,040 | | **Net assets acquired** | **$173,712** | [Note 4: Leasing Equipment, net](index=17&type=section&id=Note%204%3A%20Leasing%20Equipment%2C%20net) Net leasing equipment decreased to $1.85 billion, with depreciation expense totaling $107.1 million for the six months ended June 30, 2025 Leasing Equipment, net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Leasing equipment | $2,342,123 | $2,963,452 | | Less: Accumulated depreciation | $(493,007) | $(589,722) | | **Leasing equipment, net** | **$1,849,116** | **$2,373,730** | Depreciation Expense for Leasing Equipment (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30, | $51,249 | $55,658 | | Six Months Ended June 30, | $107,135 | $104,560 | [Note 5: Investments](index=18&type=section&id=Note%205%3A%20Investments) Investments significantly increased to $125.7 million, driven by new partnerships, resulting in $12.6 million equity in losses Ownership Interests and Carrying Values of Investments (in thousands) | Investment | Ownership Percentage | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------------- | :------------ | :---------------- | | Advanced Engine Repair JV | 25% | $19,956 | $19,048 | | 2025 Partnership | 20% | $95,306 | — | | QuickTurn Europe | 50% | $10,451 | — | | **Total** | | **$125,713** | **$19,048** | Proportionate Share of Equity in (Losses) Earnings (in thousands) | Investment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Advanced Engine Repair JV | $795 | $(633) | $908 | $(1,154) | | 2025 Partnership | $(5,717) | — | $(13,444) | — | | QuickTurn Europe | $(81) | — | $(81) | — | | **Total** | **$(5,003)** | **$(694)** | **$(12,617)** | **$(1,361)** | - The 2025 Partnership investment of **$108.8 million** focuses on acquiring 737NG and A320ceo aircraft, with FTAI Aviation as the Servicer and a **20% limited partner owner**[79](index=79&type=chunk) - A **$10.5 million** investment was made in QuickTurn Europe for a **50% interest** to expand global engine maintenance capabilities[80](index=80&type=chunk) [Note 6: Intangible Assets and Liabilities, net](index=19&type=section&id=Note%206%3A%20Intangible%20Assets%20and%20Liabilities%2C%20net) Net intangible assets decreased to $14.4 million due to amortization, with total amortization expense of $5.6 million Intangible Assets and Liabilities, net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Acquired favorable lease intangibles, net | $13,174 | $40,711 | | Acquired customer relationships, net | $1,275 | $1,494 | | **Total intangible assets, net** | **$14,449** | **$42,205** | | Acquired unfavorable lease intangibles, net | $8,438 | $12,508 | Amortization of Intangible Assets and Liabilities (in thousands) | Classification | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Lease intangibles | $2,153 | $3,786 | $5,359 | $7,762 | | Customer relationships | $124 | $95 | $219 | $212 | | **Total** | **$2,277** | **$3,881** | **$5,578** | **$7,974** | [Note 7: Debt, net](index=20&type=section&id=Note%207%3A%20Debt%2C%20net) Total debt remained stable at $3.44 billion, primarily Senior Notes, with the company in compliance with all debt covenants Debt, net (in thousands) | Category | June 30, 2025 (Outstanding Borrowings) | December 31, 2024 (Outstanding Borrowings) | | :-------------------- | :------------------------------------- | :----------------------------------------- | | Revolving Credit Facility | $0 | $0 | | Senior Notes due 2028 | $1,001,191 | $1,001,382 | | Senior Notes due 2030 | $497,266 | $497,071 | | Senior Notes due 2031 | $700,000 | $700,000 | | Senior Notes due 2032 | $800,000 | $800,000 | | Senior Notes due 2033 | $497,665 | $497,551 | | **Total debt, net** | **$3,444,612** | **$3,440,478** | - The company was in compliance with all debt covenants as of June 30, 2025[85](index=85&type=chunk) [Note 8: Fair Value Measurements](index=20&type=section&id=Note%208%3A%20Fair%20Value%20Measurements) Fair value measurements categorize assets and liabilities, with contingent obligations valued at $11.0 million - Fair value measurements use a hierarchy of Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[87](index=87&type=chunk) Fair Values of Bonds Payable (in thousands) | Bond Type | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Senior Notes due 2028 | $995,240 | $980,140 | | Senior Notes due 2030 | $530,645 | $526,380 | | Senior Notes due 2031 | $725,613 | $713,923 | | Senior Notes due 2032 | $826,984 | $816,904 | | Senior Notes due 2033 | $493,790 | $483,100 | - Contingent obligations under ASC 460, Guarantees, are valued at **$11.0 million** as of June 30, 2025, with a maximum potential undiscounted future payment of **$43.0 million**[89](index=89&type=chunk)[90](index=90&type=chunk) [Note 9: Equity-Based Compensation](index=21&type=section&id=Note%209%3A%20Equity-Based%20Compensation) Equity-based compensation expense significantly increased to $10.4 million due to new performance and restricted share awards Equity-Based Compensation Expense (in thousands) | Award Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock Options | $127 | $42 | $254 | $42 | | Performance shares | $3,501 | — | $6,763 | — | | Restricted Shares | $1,887 | $596 | $3,387 | $1,106 | | **Total** | **$5,515** | **$638** | **$10,404** | **$1,148** | - During the six months ended June 30, 2025, performance shares with a grant date fair value of **$4.4 million** and restricted shares with a grant date fair value of **$5.5 million** were issued to select officers and employees[96](index=96&type=chunk)[97](index=97&type=chunk) [Note 10: Income Taxes](index=23&type=section&id=Note%2010%3A%20Income%20Taxes) Income tax provision significantly increased to $60.7 million due to higher income in taxable jurisdictions Provision for (Benefit from) Income Taxes (in thousands) | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total current provision | $10,762 | $1,238 | $12,938 | $2,262 | | Total deferred provision (benefit) | $27,116 | $(14,271) | $47,799 | $(9,723) | | **Total provision for (benefit from) income taxes** | **$37,878** | **$(13,033)** | **$60,737** | **$(7,461)** | - The effective tax rate differs from the Cayman Islands statutory rate of **0%** due to income being subject to tax in other jurisdictions where the company operates[104](index=104&type=chunk) [Note 11: Affiliate Transactions and Former Management Agreement](index=23&type=section&id=Note%2011%3A%20Affiliate%20Transactions%20and%20Former%20Management%20Agreement) The Strategic Capital Initiative generated $170.2 million in MRE Contract revenue, and the Management Agreement was terminated in May 2024 - The 2025 Partnership, part of the Strategic Capital Initiative, committed to acquire **45 on-lease narrowbody aircraft**[106](index=106&type=chunk) - MRE Contract revenue from sales to the 2025 Partnership was **$69.6 million** for the three months and **$170.2 million** for the six months ended June 30, 2025[109](index=109&type=chunk) - The Management Agreement with the Former Manager was terminated on May 28, 2024, and the company internalized its management functions[110](index=110&type=chunk) Management Fees and Income Incentive Allocation (in thousands) | Category | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :----------------------------- | | Management fees | $405 | $992 | | Income incentive allocation | $3,148 | $7,456 | | **Total** | **$3,553** | **$8,448** | [Note 12: Segment Information](index=25&type=section&id=Note%2012%3A%20Segment%20Information) The company operates Aviation Leasing and Aerospace Products segments, with Aerospace Products generating higher revenue and net income - The two reportable segments are Aviation Leasing and Aerospace Products, with Corporate and Other including unallocated expenses and offshore energy business results[121](index=121&type=chunk)[122](index=122&type=chunk) Segment Revenues and Net Income Attributable to Shareholders (Six Months Ended June 30, 2025, in thousands) | Segment | Total Revenues | Net Income Attributable to Shareholders | | :----------------- | :------------- | :-------------------------------------- | | Aviation Leasing | $322,979 | $183,457 | | Aerospace Products | $855,334 | $240,225 | | Corporate and Other | $4 | $(160,164) | | **Total** | **$1,178,317** | **$251,633** | Geographic Sources of Revenue (Six Months Ended June 30, 2025, in thousands) | Region | Aviation Leasing | Aerospace Products | Corporate and Other | Total Revenues | | :------------- | :--------------- | :----------------- | :------------------ | :------------- | | Africa | $10,794 | $26,482 | $0 | $37,276 | | Asia | $86,352 | $82,286 | $4 | $168,642 | | Europe | $157,301 | $223,316 | $0 | $380,617 | | North America | $49,865 | $505,471 | $0 | $555,336 | | South America | $18,667 | $17,779 | $0 | $36,446 | | **Total** | **$322,979** | **$855,334** | **$4** | **$1,178,317** | - The United States (North America) and Ireland (Europe) represent **33%** and **16%** of total revenues, respectively, for the six months ended June 30, 2025[130](index=130&type=chunk) [Note 13: Earnings per Share and Equity](index=33&type=section&id=Note%2013%3A%20Earnings%20per%20Share%20and%20Equity) Basic and diluted EPS significantly improved to $2.45 and $2.44 respectively, driven by $251.6 million net income Earnings (Loss) per Share (in thousands, except share and per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to shareholders | $161,689 | $(228,205) | $251,633 | $(196,918) | | Weighted Average Ordinary Shares Outstanding - Basic | 102,558,777 | 100,958,524 | 102,555,644 | 100,602,214 | | Weighted Average Ordinary Shares Outstanding - Diluted | 103,147,860 | 100,958,524 | 103,144,727 | 100,602,214 | | **Basic EPS** | **$1.58** | **$(2.26)** | **$2.45** | **$(1.96)** | | **Diluted EPS** | **$1.57** | **$(2.26)** | **$2.44** | **$(1.96)** | [Note 14: Commitments and Contingencies](index=33&type=section&id=Note%2014%3A%20Commitments%20and%20Contingencies) The company faces ordinary legal proceedings, with no material adverse effect expected, but a $0.0-$3.3 million potential loss noted - The company is involved in ordinary course legal proceedings, but management does not expect a material adverse effect[138](index=138&type=chunk) - A potential loss of **$0.0 million to $3.3 million** is associated with an unfulfilled charter obligation in the offshore energy business[138](index=138&type=chunk) [Note 15: Restructuring Charges](index=34&type=section&id=Note%2015%3A%20Restructuring%20Charges) A $300.0 million restructuring charge was incurred in 2024 for internalization, with no charges in 2025 - A **$300.0 million** restructuring charge was incurred in 2024 for the internalization and termination of the Management Agreement[140](index=140&type=chunk) - The charge was paid with **$150.0 million** in ordinary shares and the remaining balance in cash[140](index=140&type=chunk) - No restructuring charges were recorded for the three and six months ended June 30, 2025[140](index=140&type=chunk) [Note 16: Subsequent Events](index=34&type=section&id=Note%2016%3A%20Subsequent%20Events) Cash dividends of $0.30 per ordinary share and $0.52/$0.59 per preferred share were declared on July 29, 2025 - On July 29, 2025, a cash dividend of **$0.30 per ordinary share** was declared[141](index=141&type=chunk) - Cash dividends of **$0.52 per Series C Preferred Share** and **$0.59 per Series D Preferred Share** were also declared[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition, operations, strategic initiatives, and segment performance [Overview](index=35&type=section&id=Overview) FTAI Aviation specializes in aircraft engine services, reporting $4.1 billion in assets and $164.9 million in equity - FTAI Aviation specializes in CFM56-5B, CFM56-7B, and V2500 aircraft engines, focusing on proprietary Module Factory repair processes[145](index=145&type=chunk)[146](index=146&type=chunk) Overview | Metric | Value (in billions) | | :------------- | :------------------ | | Total Assets | $4.1 | | Total Equity | $0.1649 | [Internalization of Management](index=35&type=section&id=Internalization%20of%20Management) The company internalized management on May 28, 2024, involving cash, share issuance, and a transition services agreement - The company internalized its management functions on May 28, 2024, ending the Management Agreement[148](index=148&type=chunk) - Compensation included a cash payment, **1,866,949 ordinary shares**, and purchase of partnership interests[148](index=148&type=chunk) - A Transition Services Agreement ensured continued services from the Former Manager until May 31, 2025[149](index=149&type=chunk) [Impact of Russia's Invasion of Ukraine](index=35&type=section&id=Impact%20of%20Russia%27s%20Invasion%20of%20Ukraine) Sanctions led to a $120.0 million impairment charge, with $210.7 million in assets remaining in Russia and uncertain recovery - Lease agreements with Russian airlines were terminated due to sanctions, leading to a **$120.0 million impairment charge** in 2022[150](index=150&type=chunk) - As of June 30, 2025, **eight aircraft and seventeen engines** are still located in Russia[150](index=150&type=chunk) - The insured value of assets remaining in Russia is **$210.7 million**, but recovery is uncertain[151](index=151&type=chunk) [Strategic Capital Initiative](index=35&type=section&id=Strategic%20Capital%20Initiative) The Strategic Capital Initiative, launched in December 2024, aims for an asset-light model through partnerships to acquire aircraft - The Strategic Capital Initiative, launched on December 30, 2024, focuses on acquiring 737NG and A320ceo aircraft through partnerships with third-party institutional investors[153](index=153&type=chunk) - This initiative allows the company to maintain an **asset-light business model** and serve as the primary buyer of on-lease narrowbody aircraft for the partnerships[153](index=153&type=chunk) - FTAI Aviation manages the aircraft for the 2025 Partnership as the Servicer, receiving customary, market-based compensation, and also makes minority investments[153](index=153&type=chunk)[154](index=154&type=chunk) [Operating Segments](index=36&type=section&id=Operating%20Segments) The company operates Aviation Leasing and Aerospace Products segments, with a Corporate and Other category for unallocated items - Aviation Leasing segment owns and manages aircraft and engines, leasing and selling them to lessees[155](index=155&type=chunk) - Aerospace Products segment develops, manufactures, repairs, and sells aircraft engines and aftermarket components, primarily for CFM56-5B, CFM56-7B, and V2500 engines[155](index=155&type=chunk) - Corporate and Other includes debt, unallocated corporate expenses, and results from the offshore energy business (which sold its vessels in Q4 2024)[156](index=156&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Total revenues, net income, and Adjusted EBITDA significantly increased due to revenue growth and the absence of internalization fees Consolidated Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $676,237 | $443,594 | $1,178,317 | $770,288 | | Total expenses | $465,753 | $606,189 | $816,875 | $839,949 | | Net income (loss) attributable to shareholders | $161,689 | $(228,205) | $251,633 | $(196,918) | | Adjusted EBITDA (non-GAAP) | $347,805 | $213,904 | $616,363 | $378,005 | - Total revenues increased by **$232.6 million** for the three months and **$408.0 million** for the six months ended June 30, 2025, compared to the prior year[160](index=160&type=chunk) - Net income (loss) attributable to shareholders improved by **$389.9 million** for the three months and **$448.6 million** for the six months ended June 30, 2025, compared to the prior year[160](index=160&type=chunk) [Revenues](index=38&type=section&id=Revenues) Total revenues increased significantly, driven by aerospace products and new MRE Contract revenue, partially offset by lower asset sales Revenue Changes (in thousands) | Revenue Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (6M) | | :----------------------- | :--------------------------- | :--------------------------- | :---------- | :--------------------------- | :--------------------------- | :---------- | | Aerospace products revenue | $420,686 | $245,200 | +$175,486 | $685,111 | $434,257 | +$250,854 | | MRE Contract revenue | $69,585 | — | +$69,585 | $170,223 | — | +$170,223 | | Lease income | $62,439 | $70,754 | -$8,315 | $130,879 | $123,915 | +$6,964 | | Maintenance revenue | $73,104 | $51,187 | +$21,917 | $122,711 | $96,977 | +$25,734 | | Asset sales revenue | $47,915 | $72,433 | -$24,518 | $66,854 | $111,040 | -$44,186 | | Other revenue | $2,508 | $4,020 | -$1,512 | $2,539 | $4,099 | -$1,560 | | **Total revenues** | **$676,237** | **$443,594** | **+$232,643** | **$1,178,317** | **$770,288** | **+$408,029** | - Aerospace products revenue increased due to higher CFM56-5B, CFM56-7B, and V2500 engine and module sales[164](index=164&type=chunk)[166](index=166&type=chunk) - MRE Contract revenue is a new revenue stream in 2025, primarily from sales to the 2025 Partnership[164](index=164&type=chunk)[166](index=166&type=chunk) [Expenses](index=39&type=section&id=Expenses) Total expenses decreased due to the absence of the internalization fee, despite increased cost of sales and operating expenses Expense Changes (in thousands) | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (6M) | | :--------------------------------------- | :--------------------------- | :--------------------------- | :---------- | :--------------------------- | :--------------------------- | :---------- | | Cost of sales | $369,258 | $205,857 | +$163,401 | $617,972 | $348,661 | +$269,311 | | Operating expenses | $34,328 | $29,099 | +$5,229 | $66,766 | $54,416 | +$12,350 | | Management fees and incentive allocation to affiliate | — | $3,554 | -$3,554 | — | $8,449 | -$8,449 | | Internalization fee to affiliate | — | $300,000 | -$300,000 | — | $300,000 | -$300,000 | | Depreciation and amortization | $55,236 | $56,691 | -$1,455 | $114,798 | $106,611 | +$8,187 | | **Total expenses** | **$465,753** | **$606,189** | **-$140,436** | **$816,875** | **$839,949** | **-$23,074** | - The **$300.0 million** decrease in internalization fee to affiliate is a primary driver of the overall expense reduction, as this was a one-time charge in 2024[166](index=166&type=chunk) - Cost of sales increased significantly, corresponding to the rise in Aerospace products revenue[166](index=166&type=chunk) [Other (expense) income](index=40&type=section&id=Other%20(expense)%20income) Other expense decreased due to gains on asset sales and insurance settlements, partially offset by increased interest expense Other (Expense) Income Changes (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (6M) | | :-------------------------------- | :--------------------------- | :--------------------------- | :---------- | :--------------------------- | :--------------------------- | :---------- | | Interest expense | $(63,965) | $(55,196) | -$8,769 | $(126,005) | $(102,903) | -$23,102 | | Equity in losses of unconsolidated entities | $(5,003) | $(694) | -$4,309 | $(12,617) | $(1,361) | -$11,256 | | Loss on extinguishment of debt | — | $(13,920) | +$13,920 | — | $(13,920) | +$13,920 | | Gain on sale to the 2025 Partnership | $34,604 | — | +$34,604 | $45,474 | — | +$45,474 | | Other income (expense) | $27,156 | $(498) | +$27,654 | $60,227 | $136 | +$60,091 | | **Total other expense** | **$(7,208)** | **$(70,308)** | **+$63,100** | **$(32,921)** | **$(118,048)** | **+$85,127** | - Other income increased significantly due to a **$24.2 million** (three months) and **$54.3 million** (six months) insurance settlement[170](index=170&type=chunk) - Interest expense increased due to higher average debt outstanding, primarily from new Senior Notes issued in 2024[170](index=170&type=chunk) [Provision for (benefit from) income taxes](index=40&type=section&id=Provision%20for%20(benefit%20from)%20income%20taxes) Income tax provision increased significantly due to higher taxable income in both Aircraft Leasing and Aerospace Products segments - Income tax provision increased by **$50.9 million** (three months) and **$68.2 million** (six months) due to higher taxable income[167](index=167&type=chunk) [Net income (loss)](index=40&type=section&id=Net%20income%20(loss)) Net income significantly increased due to higher revenues, reduced internalization fees, and increased other income - Net income increased by **$385.3 million** (three months) and **$448.0 million** (six months) year-over-year[168](index=168&type=chunk) [Adjusted EBITDA (Non-GAAP)](index=40&type=section&id=Adjusted%20EBITDA%20(Non-GAAP)) Adjusted EBITDA increased significantly, reflecting improved operational performance and the absence of the internalization fee - Adjusted EBITDA increased by **$133.9 million** (three months) and **$238.4 million** (six months) year-over-year[169](index=169&type=chunk) [Aviation Leasing Segment](index=41&type=section&id=Aviation%20Leasing%20Segment) Aviation Leasing managed 375 assets with 70% utilization, reporting increased revenues and net income driven by maintenance and other income - As of June 30, 2025, the Aviation Leasing segment owned and managed **375 aviation assets** (**63 commercial aircraft and 312 engines**)[171](index=171&type=chunk) - Aviation equipment utilization was approximately **70%** for the three months ended June 30, 2025[172](index=172&type=chunk) Aviation Leasing Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | $185,966 | $184,437 | $322,979 | $319,747 | | Net income attributable to shareholders | $106,431 | $52,780 | $183,457 | $95,377 | | Adjusted EBITDA (non-GAAP) | $199,303 | $124,981 | $361,292 | $229,788 | [Revenues (Aviation Leasing)](index=42&type=section&id=Revenues%20(Aviation%20Leasing)) Aviation Leasing revenues increased due to higher maintenance and servicing fees, despite a decrease in asset sales revenue - Maintenance revenue increased by **$21.9 million** (three months) and **$25.7 million** (six months) due to increased aircraft utilization and higher maintenance reserves[174](index=174&type=chunk) - Other revenue increased by **$2.5 million** (three months) and **$2.4 million** (six months) from servicing fees for the 2025 Partnership[174](index=174&type=chunk) - Asset sales revenue decreased by **$24.5 million** (three months) and **$44.2 million** (six months) due to fewer commercial aircraft and engine sales[174](index=174&type=chunk) [Expenses (Aviation Leasing)](index=43&type=section&id=Expenses%20(Aviation%20Leasing)) Aviation Leasing expenses decreased due to lower cost of sales, aligning with reduced asset sales, and decreased depreciation - Cost of sales decreased by **$7.2 million** (three months) and **$19.1 million** (six months), consistent with lower asset sales revenue[179](index=179&type=chunk) - Depreciation and amortization expense decreased by **$2.2 million** (three months) due to assets held-for-sale and sales to the 2025 Partnership[179](index=179&type=chunk) [Other income (expense) (Aviation Leasing)](index=43&type=section&id=Other%20income%20(expense)%20(Aviation%20Leasing)) Aviation Leasing other income significantly increased due to insurance settlements and gains from sales to the 2025 Partnership - Other income increased due to a **$24.2 million** (three months) and **$54.3 million** (six months) insurance settlement[175](index=175&type=chunk) - Gains on sale to the 2025 Partnership contributed **$34.6 million** (three months) and **$45.5 million** (six months)[175](index=175&type=chunk) [Provision for income taxes (Aviation Leasing)](index=43&type=section&id=Provision%20for%20income%20taxes%20(Aviation%20Leasing)) Aviation Leasing income tax provision increased due to higher taxable income from leasing activities - Income tax provision increased by **$18.2 million** (three months) and **$32.5 million** (six months) due to higher taxable income from leasing activities[176](index=176&type=chunk) [Net income (Aviation Leasing)](index=43&type=section&id=Net%20income%20(Aviation%20Leasing)) Aviation Leasing net income increased significantly, driven by positive revenue and other income trends - Net income increased by **$53.7 million** (three months) and **$88.1 million** (six months) year-over-year[177](index=177&type=chunk) [Adjusted EBITDA (Non-GAAP) (Aviation Leasing)](index=43&type=section&id=Adjusted%20EBITDA%20(Non-GAAP)%20(Aviation%20Leasing)) Aviation Leasing Adjusted EBITDA increased significantly, reflecting strong operational performance - Adjusted EBITDA increased by **$74.3 million** (three months) and **$131.5 million** (six months) year-over-year[178](index=178&type=chunk) [Aerospace Products Segment](index=44&type=section&id=Aerospace%20Products%20Segment) Aerospace Products revenues and net income significantly increased due to strong engine sales, MRE Contract revenue, and acquisitions - The Aerospace Products segment focuses on CFM56-5B, CFM56-7B, and V2500 commercial aircraft engines and aftermarket components[180](index=180&type=chunk) - The segment acquired Lockheed Martin Commercial Engine Solutions (LMCES) and a **50% equity interest** in QuickTurn Europe to expand MRE capabilities[181](index=181&type=chunk)[183](index=183&type=chunk) Aerospace Products Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | $490,271 | $245,200 | $855,334 | $434,257 | | Net income attributable to shareholders | $133,582 | $84,875 | $240,225 | $151,308 | | Adjusted EBITDA (non-GAAP) | $164,864 | $91,240 | $295,809 | $161,517 | [Revenues (Aerospace Products)](index=45&type=section&id=Revenues%20(Aerospace%20Products)) Aerospace Products revenues increased significantly, driven by higher engine sales and new MRE Contract revenue from partnerships - Aerospace Products revenue increased by **$175.5 million** (three months) and **$250.9 million** (six months) due to higher engine and module sales[185](index=185&type=chunk) - MRE Contract revenue from the 2025 Partnership contributed **$69.6 million** (three months) and **$170.2 million** (six months)[185](index=185&type=chunk) [Expenses (Aerospace Products)](index=45&type=section&id=Expenses%20(Aerospace%20Products)) Aerospace Products expenses increased due to higher cost of sales, aligning with increased product sales, and higher operating expenses - Cost of sales increased by **$170.6 million** (three months) and **$288.4 million** (six months), aligning with increased aerospace product sales[185](index=185&type=chunk)[190](index=190&type=chunk) - Operating expenses increased due to higher compensation and benefits, partly from the LMCES acquisition[185](index=185&type=chunk)[190](index=190&type=chunk) [Provision for income taxes (Aerospace Products)](index=46&type=section&id=Provision%20for%20income%20taxes%20(Aerospace%20Products)) Aerospace Products income tax provision increased due to higher taxable income from product activities - Income tax provision increased by **$20.9 million** (three months) and **$37.7 million** (six months) due to higher taxable income[186](index=186&type=chunk) [Net income (Aerospace Products)](index=46&type=section&id=Net%20income%20(Aerospace%20Products)) Aerospace Products net income increased significantly, driven by strong revenue growth - Net income increased by **$48.7 million** (three months) and **$88.9 million** (six months) year-over-year[187](index=187&type=chunk) [Adjusted EBITDA (Non-GAAP) (Aerospace Products)](index=46&type=section&id=Adjusted%20EBITDA%20(Non-GAAP)%20(Aerospace%20Products)) Aerospace Products Adjusted EBITDA increased significantly, reflecting strong operational performance - Adjusted EBITDA increased by **$73.6 million** (three months) and **$134.3 million** (six months) year-over-year[188](index=188&type=chunk) [Corporate and Other](index=46&type=section&id=Corporate%20and%20Other) Corporate and Other revenues decreased due to asset sales, while expenses and net loss significantly decreased due to the absence of internalization fees Corporate and Other Segment Results (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total revenues | — | $13,957 | $4 | $16,284 | | Total expenses | $20,299 | $329,023 | $46,912 | $353,316 | | Net loss attributable to shareholders | $(73,389) | $(365,860) | $(160,164) | $(443,603) | | Adjusted EBITDA (non-GAAP) | $(11,427) | $(2,317) | $(28,853) | $(13,300) | [Revenues (Corporate and Other)](index=47&type=section&id=Revenues%20(Corporate%20and%20Other)) Corporate and Other revenues decreased due to the sale of offshore energy vessels in Q4 2024 - Total revenues decreased due to the sale of offshore energy vessels in Q4 2024[192](index=192&type=chunk) [Expenses (Corporate and Other)](index=47&type=section&id=Expenses%20(Corporate%20and%20Other)) Corporate and Other expenses significantly decreased due to the absence of the internalization fee and reduced management fees - Internalization fee to affiliate decreased by **$300.0 million** (three months and six months) as it was a 2024 charge[193](index=193&type=chunk) - Management fees and incentive allocation to affiliate decreased by **$3.6 million** (three months) and **$8.4 million** (six months) due to internalization[193](index=193&type=chunk) - Depreciation and amortization decreased by **$2.0 million** (three months) and **$4.0 million** (six months) due to the sale of offshore energy vessels[193](index=193&type=chunk) [Other income (expense) (Corporate and Other)](index=48&type=section&id=Other%20income%20(expense)%20(Corporate%20and%20Other)) Corporate and Other's other expense decreased for three months but increased for six months, influenced by debt extinguishment and interest expense - Loss on extinguishment of debt decreased by **$13.9 million** (three and six months) due to 2024 redemptions[199](index=199&type=chunk) - Interest expense increased by **$8.8 million** (three months) and **$23.1 million** (six months) due to higher average debt outstanding from new Senior Notes[199](index=199&type=chunk) [Benefit from income taxes (Corporate and Other)](index=48&type=section&id=Benefit%20from%20income%20taxes%20(Corporate%20and%20Other)) Corporate and Other's tax benefit decreased for three months due to prior year's internalization fee, but increased for six months - Three-month tax benefit decreased by **$11.8 million** due to prior year's tax benefit from internalization fee[194](index=194&type=chunk) - Six-month tax benefit increased by **$2.0 million** due to higher deductible corporate overhead expenses[194](index=194&type=chunk) [Net loss (Corporate and Other)](index=48&type=section&id=Net%20loss%20(Corporate%20and%20Other)) Corporate and Other net loss significantly decreased due to the substantial reduction in internalization fees - Net loss decreased by **$287.8 million** (three months) and **$282.9 million** (six months) year-over-year[195](index=195&type=chunk) [Adjusted EBITDA (Non-GAAP) (Corporate and Other)](index=48&type=section&id=Adjusted%20EBITDA%20(Non-GAAP)%20(Corporate%20and%20Other)) Corporate and Other Adjusted EBITDA decreased due to reduced revenues and increased interest expense - Adjusted EBITDA decreased by **$9.1 million** (three months) and **$15.6 million** (six months) year-over-year[196](index=196&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity, utilizing the Strategic Capital Initiative for asset-light growth and managing capital for operations and debt - The company believes it has sufficient liquidity and is evaluating potential transactions and financings[197](index=197&type=chunk)[202](index=202&type=chunk) - The Strategic Capital Initiative and its partnerships are key to maintaining an **asset-light business model** and acquiring on-lease narrowbody aircraft[197](index=197&type=chunk) - Principal uses of liquidity include acquisitions, dividends, operating expenses, and debt service; principal sources are revenues, borrowings, and asset sales[198](index=198&type=chunk)[201](index=201&type=chunk) [Historical Cash Flow](index=49&type=section&id=Historical%20Cash%20Flow) Operating cash outflow decreased, investing cash inflow significantly increased, and financing cash outflow increased due to asset sales and debt changes Historical Cash Flow (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(136,284) | $(187,636) | +$51,352 | | Net cash provided by (used in) investing activities | $496,148 | $(219,383) | +$715,531 | | Net cash (used in) provided by financing activities | $(173,069) | $485,748 | -$658,817 | - Net cash provided by investing activities increased significantly due to proceeds from asset sales to the 2025 Partnership (**$397.1 million**) and other asset sales (**$255.7 million**)[204](index=204&type=chunk) - Net cash used in financing activities increased due to a **$1.4 billion** decrease in proceeds from debt and a **$124.2 million** increase in preferred share redemptions[205](index=205&type=chunk) [Contractual Obligations](index=49&type=section&id=Contractual%20Obligations) The company has $3.5 billion in debt and $1.3 billion in interest obligations, plus $37.0 million in lease obligations - Outstanding principal debt obligations were **$3.5 billion**, with **$1.3 billion** in interest payments[206](index=206&type=chunk) - Interest payments of **$228.8 million** are due in the next twelve months[206](index=206&type=chunk) - Operating and finance lease obligations totaled **$37.0 million**, with **$3.6 million** due in the next twelve months[207](index=207&type=chunk) [Other Cash Requirements](index=50&type=section&id=Other%20Cash%20Requirements) The company pays quarterly dividends and plans to meet short-term liquidity needs through cash, borrowing, and operations - Declared cash dividends of **$123.0 million** on ordinary shares and **$25.9 million** on preferred shares in the last twelve months[209](index=209&type=chunk) - Future short-term liquidity will be met through cash on hand, unused borrowing capacity, and net cash from operations[210](index=210&type=chunk) [Critical Accounting Estimates and Policies](index=50&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) No material changes occurred in critical accounting estimates since the December 31, 2024, Annual Report on Form 10-K - No material changes to critical accounting estimates since the Annual Report on Form 10-K for December 31, 2024[211](index=211&type=chunk) [Recent Accounting Pronouncements](index=50&type=section&id=Recent%20Accounting%20Pronouncements) The company is evaluating ASU2023-05 and monitoring other recent accounting pronouncements for future adoption - Evaluating ASU2023-05 (Joint Venture Formations), effective January 1, 2025, for its impact[64](index=64&type=chunk) - Monitoring ASU2023-09 (Income Taxes) and ASU2024-03 (Segment Expense Disclosures) for future adoption[65](index=65&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk, but a 100-basis point change would not impact interest expense over 12 months - Primary market risk exposure is to interest rate fluctuations, particularly on the Revolving Credit Facility[214](index=214&type=chunk) - A hypothetical **100-basis point change** in variable interest rates would not have increased or decreased interest expense over the next 12 months, assuming no hedging[217](index=217&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control - Disclosure controls and procedures were effective as of June 30, 2025[218](index=218&type=chunk) - No material changes to internal control over financial reporting occurred during the fiscal quarter[219](index=219&type=chunk) [PART II - OTHER INFORMATION](index=51&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part includes legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, other information, and exhibits [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary legal proceedings, with no material adverse effect expected by management - The company is involved in ordinary course legal proceedings, including regulatory investigations[221](index=221&type=chunk) - Management does not expect current or threatened legal proceedings to have a material adverse effect[221](index=221&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section details various business, taxation, and share-related risks, including macroeconomic, operational, and regulatory factors [Risks Related to Our Business](index=51&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks encompass macroeconomic conditions, industry oversupply, regulatory compliance, operational disruptions, and Strategic Capital Initiative uncertainties - Uncertain macroeconomic conditions, including the Russia-Ukraine conflict, may reduce demand, cause non-performance of contracts, and limit capital access[223](index=223&type=chunk)[225](index=225&type=chunk) - Oversupply in the aviation industry can depress lease rates and asset values, while heavy regulation (e.g., FAA, Transport Canada) requires strict compliance, with potential for new, more stringent rules[226](index=226&type=chunk)[228](index=228&type=chunk)[230](index=230&type=chunk) - The Strategic Capital Initiative, including the 2025 Partnership, involves risks such as market, liquidity, valuation, key personnel, litigation, allocation, leverage, and regulatory uncertainties[248](index=248&type=chunk)[251](index=251&type=chunk) [Risks Related to Taxation](index=62&type=section&id=Risks%20Related%20to%20Taxation) Taxation risks include potential PFIC/CFC status, loss of Section 883 exemption, and increased liabilities from evolving international tax standards - The company may be treated as a PFIC or CFC for U.S. federal income tax purposes, potentially leading to adverse tax consequences for U.S. shareholders, including 'phantom income' if a QEF election is not made[296](index=296&type=chunk)[297](index=297&type=chunk) - Loss of the Section 883 exemption for rental income from aircraft in 'international traffic' could subject the company to U.S. federal income taxation on a gross or net income basis, including branch profits tax[301](index=301&type=chunk) - Increased and unanticipated tax liabilities may arise from evolving international tax standards (e.g., OECD's BEPS 2.0, Bermuda's **15% corporate tax regime** effective January 1, 2025)[302](index=302&type=chunk)[303](index=303&type=chunk) [Risks Related to Our Shares](index=64&type=section&id=Risks%20Related%20to%20Our%20Shares) Share-related risks include market price volatility, short selling, interest rate effects, dilution, and changes in dividend policy - The market price and trading volume of ordinary and preferred shares may be **highly volatile**, leading to rapid and substantial losses[305](index=305&type=chunk) - Short selling activities, including reports published in January 2025, can cause increased volatility and potential governmental/regulatory scrutiny[307](index=307&type=chunk) - An increase in market interest rates may adversely affect the market price of shares by making the distribution rate less attractive and increasing interest expense on debt[308](index=308&type=chunk)[310](index=310&type=chunk) - Future equity awards (e.g., under the 2025 Omnibus Incentive Plan) and debt/equity issuances could dilute existing ordinary shareholders and negatively affect share price[312](index=312&type=chunk)[313](index=313&type=chunk)[315](index=315&type=chunk) - The company's dividend policy may change at any time, and there is no assurance of continued dividend payments[318](index=318&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities and no use of proceeds to report[321](index=321&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to report - No defaults upon senior securities to report[321](index=321&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[321](index=321&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) No other information to report - No other information to report[321](index=321&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including various agreements and documents - The exhibits include various agreements, organizational documents, and financial instruments[323](index=323&type=chunk)[324](index=324&type=chunk) [SIGNATURES](index=69&type=section&id=SIGNATURES) This section contains the signatures of the Chairman, CEO, CFO, and CAO, certifying the report's submission [Signatures](index=69&type=section&id=Signatures) The report was signed by the Chairman, CEO, CFO, and CAO on July 31, 2025, certifying its submission - The report was signed by Joseph P. Adams, Jr. (Chairman and CEO) and Eun (Angela) Nam (CFO and CAO) on July 31, 2025[327](index=327&type=chunk)

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) [Q2 2025 Financial Overview](index=1&type=section&id=Q2%202025%20Financial%20Overview) FTAI Aviation Ltd. reported strong financial results for the second quarter of 2025, with significant net income and adjusted EBITDA, indicating robust performance Selected Financial Results (Q2'25) (in thousands) | Selected Financial Results (Q2'25) | Amount (in thousands) | | :-------------------------------- | :-------------------- | | Net Income Attributable to Shareholders | $161,689 | | Basic Earnings per Ordinary Share | $1.58 | | Diluted Earnings per Ordinary Share | $1.57 | | Adjusted EBITDA | $347,805 | [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Company's Board of Directors declared cash dividends for ordinary and preferred shares for the quarter ended June 30, 2025 - Cash dividend of **$0.30 per ordinary share** declared for Q2 2025, payable on August 19, 2025, to holders of record on August 12, 2025[3](index=3&type=chunk) - Cash dividends declared for **Series C Preferred Shares ($0.51563 per share)** and **Series D Preferred Shares ($0.59375 per share)**, payable on August 15, 2025, to holders of record on August 8, 2025[4](index=4&type=chunk) [Business Highlights](index=1&type=section&id=Business%20Highlights) FTAI delivered an excellent quarter with strong financial position and significant operational achievements, including growth in Aerospace Products and strategic acquisitions - Net Income Attributable to Shareholders of **$161.7 million ($1.58 EPS)**, an **80% increase** versus Q1 2025[5](index=5&type=chunk) - Aerospace Products Adjusted EBITDA increased **26% from Q1** to **$164.9 million**, and **81% year-over-year** in Q2 2025[5](index=5&type=chunk)[6](index=6&type=chunk) - Significant ramp in production to **184 CFM56 Modules** in Q2 2025, a **33% increase** versus prior quarter[5](index=5&type=chunk) - Acquired **100% equity of Pacific Aerodynamic**, expanding CFM56 compressor blade and vane repair capabilities[5](index=5&type=chunk) - Aerospace Products market share increased to approximately **9%** on an annualized basis, up from **5% last year**, with a long-term goal of **25%**[6](index=6&type=chunk) - SCI Partnership is on-track to deploy **$4 billion of capital in 2025**, with **145 aircraft** now owned or under LOI compared to a target of **250**[6](index=6&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) [About FTAI Aviation Ltd.](index=2&type=section&id=About%20FTAI%20Aviation%20Ltd.) FTAI Aviation Ltd. specializes in owning and maintaining commercial jet engines, focusing on CFM56 and V2500 models, and invests in aviation assets for cash flow and appreciation - FTAI owns and maintains commercial jet engines, with a primary focus on **CFM56 and V2500 engines**[11](index=11&type=chunk) - The company utilizes proprietary products, including the **Module Factory** and a joint venture for engine PMA, to provide cost savings and flexibility to its airline, lessor, and MRO customer base[11](index=11&type=chunk) - FTAI invests in aviation assets and aerospace products designed to generate strong and stable cash flows, with potential for earnings growth and asset appreciation[11](index=11&type=chunk) [Additional Information & Conference Call](index=2&type=section&id=Additional%20Information%20%26%20Conference%20Call) Further investor information is available on the company's website and SEC filings, and details for the Q2 2025 earnings conference call are provided - Additional information for investors is available on the Investor Center section of the Company's website (https://www.ftaiaviation.com/) and in its Annual Report on Form 10-K and Quarterly Report on Form 10-Q[7](index=7&type=chunk) - A conference call was scheduled for **Wednesday, July 30, 2025, at 8:00 A.M. Eastern Time**, with registration and webcast details provided[8](index=8&type=chunk)[9](index=9&type=chunk) [Cautionary Statements & Contacts](index=3&type=section&id=Cautionary%20Statements%20%26%20Contacts) The press release includes a cautionary note regarding forward-looking statements and provides contact information for investor relations and media inquiries - The press release contains forward-looking statements, including goals for annual maintenance market share (**25%**) and SCI Partnership capital deployment (**$4 billion in 2025**), which are subject to risks and uncertainties[12](index=12&type=chunk) - Investors are advised to refer to the 'Risk Factors' and 'Management's Discussion and Analysis of Financial Condition and Results of Operations' sections in the Company's 10-K and 10-Q reports for a discussion of potential risks[12](index=12&type=chunk) - Contact information for Investor Relations (**Alan Andreini**) and Media (**Joele Frank, Wilkinson Brimmer Katcher**) is provided[13](index=13&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) FTAI Aviation Ltd. demonstrated significant revenue growth and a return to profitability in Q2 2025 and for the six months ended June 30, 2025, primarily driven by aerospace products and new MRE contracts Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------------------- | :---------- | :---------- | :------------- | :------------- | | Aerospace products revenue | $420,686 | $245,200 | $175,486 | 71.57% | | MRE Contract revenue | $69,585 | $— | $69,585 | N/A | | Lease income | $62,439 | $70,754 | $(8,315) | -11.75% | | Maintenance revenue | $73,104 | $51,187 | $21,917 | 42.83% | | Asset sales revenue | $47,915 | $72,433 | $(24,518) | -33.85% | | **Total revenues** | **$676,237**| **$443,594**| **$232,643** | **52.46%** | | Total expenses | $465,753 | $606,189 | $(140,436) | -23.17% | | Net income (loss) attributable to shareholders | $161,689 | $(228,205) | $389,894 | N/A | | Basic Earnings per Ordinary Share | $1.58 | $(2.26) | $3.84 | N/A | | Diluted Earnings per Ordinary Share | $1.57 | $(2.26) | $3.83 | N/A | Consolidated Statements of Operations Highlights (Six Months Ended June 30, in thousands) | Metric | 6M 2025 | 6M 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------------------- | :------------ | :------------ | :------------- | :------------- | | Aerospace products revenue | $685,111 | $434,257 | $250,854 | 57.76% | | MRE Contract revenue | $170,223 | $— | $170,223 | N/A | | Lease income | $130,879 | $123,915 | $6,964 | 5.62% | | Maintenance revenue | $122,711 | $96,977 | $25,734 | 26.54% | | Asset sales revenue | $66,854 | $111,040 | $(44,186) | -39.80% | | **Total revenues** | **$1,178,317**| **$770,288** | **$408,029** | **53.00%** | | Total expenses | $816,875 | $839,949 | $(23,074) | -2.75% | | Net income (loss) attributable to shareholders | $251,633 | $(196,918) | $448,551 | N/A | | Basic Earnings per Ordinary Share | $2.45 | $(1.96) | $4.41 | N/A | | Diluted Earnings per Ordinary Share | $2.44 | $(1.96) | $4.40 | N/A | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, FTAI Aviation Ltd. significantly improved its liquidity and strengthened its equity position compared to December 31, 2024, while managing liabilities effectively Consolidated Balance Sheets Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :----------- | :--------- | :--------- | | Cash and cash equivalents | $301,911 | $115,116 | $186,795 | 162.26% | | Total current assets | $1,759,385 | $1,226,018 | $533,367 | 43.50% | | Total assets | $4,101,075 | $4,037,952 | $63,123 | 1.56% | | Total current liabilities | $350,940 | $347,246 | $3,694 | 1.06% | | Long-term debt, net | $3,444,612 | $3,440,478 | $4,134 | 0.12% | | Total liabilities | $3,936,131 | $3,956,584 | $(20,453) | -0.52% | | Shareholders' equity | $164,944 | $81,368 | $83,576 | 102.71% | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted EBITDA Reconciliation (Consolidated)](index=6&type=section&id=Adjusted%20EBITDA%20Reconciliation%20(Consolidated)) Consolidated Adjusted EBITDA saw substantial year-over-year growth in Q2 2025 and for the six-month period, reflecting strong operational performance after various adjustments - Adjusted EBITDA is a key performance measure used by the Chief Operating Decision Maker to assess operational performance and make resource allocation decisions[20](index=20&type=chunk)[21](index=21&type=chunk) Consolidated Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------------------- | :---------- | :---------- | :------------- | :------------- | | Net income (loss) attributable to shareholders | $161,689 | $(228,205) | $389,894 | N/A | | Adjusted EBITDA | $347,805 | $213,904 | $133,901 | 62.60% | | Metric | 6M 2025 | 6M 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------------------- | :------------ | :------------ | :------------- | :------------- | | Net income (loss) attributable to shareholders | $251,633 | $(196,918) | $448,551 | N/A | | Adjusted EBITDA | $616,363 | $378,005 | $238,358 | 63.06% | [Adjusted EBITDA Reconciliation (Aerospace Products)](index=8&type=section&id=Adjusted%20EBITDA%20Reconciliation%20(Aerospace%20Products)) The Aerospace Products segment demonstrated exceptional growth in Adjusted EBITDA, significantly contributing to the company's overall performance for both the quarter and year-to-date Aerospace Products Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------------------- | :---------- | :---------- | :------------- | :------------- | | Net income attributable to shareholders | $133,582 | $84,875 | $48,707 | 57.39% | | Adjusted EBITDA | $164,864 | $91,240 | $73,624 | 80.69% | | Metric | 6M 2025 | 6M 2024 | YoY Change ($) | YoY Change (%) | | :-------------------------------------- | :------------ | :------------ | :------------- | :------------- | | Net income attributable to shareholders | $240,225 | $151,308 | $88,917 | 58.76% | | Adjusted EBITDA | $295,809 | $161,517 | $134,292 | 83.14% | [Adjusted Free Cash Flow](index=8&type=section&id=Adjusted%20Free%20Cash%20Flow) Adjusted Free Cash Flow for Q2 2025 was positive, primarily driven by investing activities, offsetting cash used in operations - Adjusted Free Cash Flow for the three months ended June 30, 2025, was positive, exceeding **$400 million**[5](index=5&type=chunk) - Components of Adjusted Free Cash Flow for Q2 2025 included net cash used in operating activities of **$(110.3) million**, net cash provided by investing activities of **$523.8 million**, and an adjustment for FTAI's 50% joint venture investment in QuickTurn Europe of **$10.0 million**[27](index=27&type=chunk)

Financial Performance - For the three months ended March 31, 2025, total revenues increased to $502.1 million, up 53.7% from $326.7 million in the same period of 2024 [150]. - Net income attributable to shareholders for the three months ended March 31, 2025, was $89.9 million, compared to $31.3 million in 2024, representing a growth of 185.5% [150]. - Adjusted EBITDA for the three months ended March 31, 2025, was $268.6 million, an increase of 63.7% from $164.1 million in 2024 [152]. - Total revenues increased by $175.4 million, driven by a $176.0 million increase in Aerospace products revenue and a $15.2 million increase in lease income [153]. - Net income increased by $62.8 million, primarily due to the revenue growth and changes in expenses [155]. - Adjusted EBITDA increased by $104.5 million, reflecting improved operational performance [156]. - Lease income for the three months ended March 31, 2025, was $68.5 million, an increase of 28.6% from $53.2 million in 2024 [150]. - Maintenance revenue increased by $3.8 million, driven by more aircraft and engines on lease [164]. - Net income attributable to shareholders increased by $40.2 million, reaching $106.6 million for the three months ended March 31, 2025, compared to $66.4 million in 2024 [170]. - Adjusted EBITDA (non-GAAP) increased by $60.7 million, totaling $130.9 million for the three months ended March 31, 2025, compared to $70.3 million in 2024 [174]. Revenue Breakdown - Aerospace products revenue for the same period was $365.1 million, a significant increase of 93.1% compared to $189.1 million in 2024 [150]. - Aerospace products revenue increased by $176.0 million to $365.1 million for the three months ended March 31, 2025, compared to $189.1 million in the same period of 2024 [169]. - Total expenses increased by $117.4 million, with cost of sales rising by $105.9 million [153]. - Total expenses rose by $119.6 million, with cost of sales increasing by $117.8 million, primarily due to higher sales of CFM56-5B, CFM56-7B, and V2500 engines [175]. Impairments and Charges - The company recognized an impairment charge of $120.0 million for leasing equipment assets related to the impact of Russia's invasion of Ukraine [140]. - The provision for income taxes increased by $17.3 million, driven by higher income from Aircraft Leasing and Aerospace Products segments [154]. - The provision for income taxes increased by $16.8 million, primarily due to higher income from Aerospace Products activities [172]. Strategic Initiatives - The company launched a Strategic Capital Initiative on December 30, 2024, focusing on acquiring 737NG and A320ceo aircraft, allowing for an asset-light business model [144]. - The company announced a Strategic Capital Initiative to acquire 737NG and A320ceo aircraft, aiming to maintain an asset-light business model [182]. - The company internalized its management function on May 28, 2024, eliminating management fees and incentive distributions to the former manager [138]. Cash Flow and Investments - Cash used for investments was $339.4 million for the three months ended March 31, 2025, compared to $303.0 million in 2024 [185]. - Net cash used in operating activities increased by $25.6 million to $(25,966) thousand in Q1 2025, compared to $(345) thousand in Q1 2024 [188]. - Net cash used in investing activities decreased by $141.6 million to $(27,627) thousand in Q1 2025, primarily due to proceeds from asset sales of $104.6 million [189]. - Net cash provided by financing activities decreased by $93.4 million to $50,610 thousand in Q1 2025, mainly due to the redemption of preferred shares of $124.2 million [190]. - Proceeds from the sale of assets were $263.1 million in Q1 2025, up from $128.4 million in Q1 2024 [194]. Debt and Obligations - As of March 31, 2025, the company had outstanding principal and interest payment obligations of $3.7 billion and $1.4 billion, respectively [191]. - Interest expense increased by $14.3 million, reflecting a rise in average debt outstanding to approximately $955.7 million [158]. - A hypothetical 100-basis point increase in variable interest rates would result in an increase of approximately $2.0 million in interest expense over the next 12 months [202]. Corporate Segment Performance - Total revenues in the Corporate and Other segment decreased by $2.3 million, primarily due to the sale of two vessels in the Offshore Energy business [177]. - Net loss attributable to shareholders in the Corporate and Other segment increased by $9.0 million, totaling $(86.8) million for the three months ended March 31, 2025 [176].

Financial Performance - Net income attributable to shareholders for Q1 2025 was $89.9 million, compared to $31.3 million in Q1 2024, representing a significant increase[6] - Basic earnings per ordinary share for Q1 2025 were $0.88, up from $0.31 in Q1 2024, reflecting a growth of 184%[14] - Total revenues for Q1 2025 reached $502.1 million, a 53.7% increase from $326.7 million in Q1 2024[15] - Adjusted EBITDA for Q1 2025 was $268.6 million, with an adjusted EBITDA margin of 36% for Aerospace Products[6] - Adjusted EBITDA for Q1 2025 reached $268,558,000, reflecting a 63.7% increase compared to $164,101,000 in Q1 2024[23] - In the Aerospace Products segment, net income attributable to shareholders increased to $106,643,000 in Q1 2025, up 60.5% from $66,433,000 in Q1 2024[26] - Adjusted EBITDA for Aerospace Products in Q1 2025 was $130,945,000, representing an increase of 86.3% from $70,277,000 in Q1 2024[26] Revenue Growth - The company generated $365.1 million in Aerospace products revenue, compared to $189.1 million in the same quarter last year, marking a 93% increase[15] - Total assets increased to $4.27 billion as of March 31, 2025, up from $4.04 billion at the end of 2024[18] Debt and Expenses - Long-term debt increased to $3.64 billion as of March 31, 2025, compared to $3.44 billion at the end of 2024[18] - Provision for income taxes in Q1 2025 was $22,859,000, compared to $5,572,000 in Q1 2024, indicating a rise of 311%[23] - Depreciation and amortization expense for Q1 2025 was $68,387,000, an increase of 15.7% from $59,122,000 in Q1 2024[23] - Equity-based compensation expense rose to $4,889,000 in Q1 2025, compared to $510,000 in Q1 2024, marking a substantial increase of 855%[23] - Interest expense and dividends on preferred shares increased to $68,155,000 in Q1 2025, up from $56,042,000 in Q1 2024, a rise of 21.6%[23] - Acquisition and transaction expenses for Q1 2025 were $7,292,000, compared to $6,179,000 in Q1 2024, reflecting an increase of 18.0%[23] Market Demand and Initiatives - FTAI's Module Factory has over 100 customers worldwide, indicating strong market demand[6] - As of March 31, 2025, FTAI owned or had letters of intent for 98 aircraft under its Strategic Capital Initiative 2025 partnership[6] Dividends - The company declared a cash dividend of $0.30 per ordinary share for Q1 2025, payable on May 23, 2025[3] Other Financial Metrics - The pro-rata share of Adjusted EBITDA from unconsolidated entities improved to $41,000 in Q1 2025, compared to a loss of $548,000 in Q1 2024, a positive change of $589,000[23]

Group 1 - The article discusses the performance of FTAI Aviation Preferred Series C (NASDAQ: FTAIN), which has seen a decline of 1.8% since a previous buy rating was issued in December, while the S&P 500 has declined by 11.7% during the same period [1] - The investing group, The Aerospace Forum, aims to identify investment opportunities within the aerospace, defense, and airline sectors, leveraging data-informed analysis to provide insights into industry developments [1] - The analyst behind the article has a background in aerospace engineering, which enhances the analysis of the complex industry with significant growth prospects [1] Group 2 - The investing group offers direct access to data analytics monitors, which supports their investment research and analysis [1] - The article emphasizes that past performance is not indicative of future results, and no specific investment recommendations are made [2] - The analysts contributing to the platform include both professional and individual investors, who may not be licensed or certified [2]

Financial Performance - Total revenues increased by $564.0 million to $1,734.9 million in 2024, driven by a $624.9 million increase in aerospace products revenue[195]. - Net income from continuing operations decreased by $235.1 million, resulting in a net income of $8.7 million in 2024[198]. - Adjusted EBITDA increased by $264.8 million to $862.1 million, reflecting improved operational performance[199]. - Net income attributable to shareholders decreased by $81.4 million to $210.2 million in 2024 from $291.6 million in 2023[215]. - Net income attributable to shareholders rose to $346.3 million in 2024, up from $180.2 million in 2023, reflecting a $166.2 million increase[227]. - Adjusted EBITDA increased by $220.6 million to $380.6 million in 2024, compared to $160.0 million in 2023[228]. - Adjusted EBITDA for the corporate segment was $(18.6) million in 2024, an improvement from $(30.1) million in 2023[237]. Revenue Breakdown - Aerospace products revenue growth was primarily due to a $546.0 million increase in CFM56-7B, CFM56-5B, and V2500 engine and module sales[195]. - Aerospace products revenue surged to $1,079.8 million in 2024, up from $455.0 million in 2023, marking a significant increase of $624.9 million[222]. - Total revenues decreased by $53.2 million, with asset sales revenue dropping by $111.0 million due to fewer sales transactions of commercial aircraft and engines[212]. - Lease income increased by $54.7 million, driven by a $37.3 million rise in engine lease revenue and a $17.5 million increase in aircraft lease revenue[212]. - Maintenance revenue increased by $9.5 million, with engine maintenance revenue rising by $43.2 million, partially offset by a $32.7 million decrease in aircraft maintenance revenue[212]. Expenses and Costs - Total expenses increased by $665.9 million to $1,497.1 million, with significant contributions from cost of sales and acquisition expenses[197]. - Total expenses increased by $206.7 million, with cost of sales rising by $253.7 million, primarily in the Aerospace Products segment[201]. - Total expenses increased by $406.1 million in 2024, with a significant rise in cost of sales by $393.6 million[226]. - Interest expense increased by $60.1 million, reflecting an increase in average debt outstanding of approximately $779.3 million[200]. - The provision for income taxes increased by $65.3 million, reflecting higher tax obligations due to increased income from leasing and aerospace activities[197]. Asset Management - As of December 31, 2024, the company had total consolidated assets of $4.0 billion and total equity of $81.4 million[175]. - The Aviation Leasing segment owns and manages aviation assets, while the Aerospace Products segment develops and manufactures aircraft engines and components[186]. - As of December 31, 2024, the Aviation Leasing segment managed 421 aviation assets, with 94 commercial aircraft and 181 engines leased to operators[207]. - The insured value of aircraft and engines remaining in Russia is $210.7 million, with uncertain timing and amount of recoveries under insurance policies[179]. - Proceeds from the sale of assets were $969.3 million in 2024, significantly higher than previous years[260]. Strategic Initiatives - The company launched a Strategic Capital Initiative on December 30, 2024, focusing on acquiring 737NG and A320ceo aircraft[185]. - The company expects to provide aircraft management services and make minority investments in future partnerships under the Strategic Capital Initiative[185]. - The company launched a Strategic Capital Initiative in December 2024 to maintain an asset-light business model while acquiring on-lease aircraft[251]. Management and Internalization - The company internalized its management function on May 28, 2024, eliminating management fees to the Former Manager[176]. - The company entered into a Transition Services Agreement with the Former Manager to provide services until October 31, 2024[177]. - The company anticipates operational cost savings following the internalization of management functions effective May 28, 2024[256]. Financing and Liquidity - The company issued $500.0 million in senior unsecured notes due 2033, using proceeds to redeem $130.5 million of Senior Notes due 2027 and pay down the Revolving Credit Facility[250]. - Net cash provided by financing activities increased by $399.6 million, primarily due to proceeds from debt of $1,630.2 million and maintenance deposits of $19.0 million[261]. - The company expects to meet future short-term liquidity requirements through cash on hand, unused borrowing capacity, and net cash from current operations[267]. - Outstanding principal and interest payment obligations as of December 31, 2024, total $3.5 billion and $1.4 billion, respectively, with $229.8 million due in the next twelve months[264]. Taxation - The provision for income taxes increased by $69.2 million, reflecting higher tax obligations from increased income in taxable jurisdictions[214]. - The benefit from income taxes increased by $65.1 million, primarily due to the establishment of a deferred tax asset of $72.2 million[203]. - The provision for income taxes increased by $46.7 million in 2024, correlating with the growth in income from Aerospace Products activities[226]. Impairments and Losses - The company recognized an impairment charge of $120.0 million for leasing equipment assets due to the impact of Russia's invasion of Ukraine[178]. - Net loss attributable to shareholders from continuing operations was $588.7 million in 2024, compared to a loss of $259.8 million in 2023[236]. - Net loss increased by $320.0 million, primarily due to increased expenses and interest costs[241]. Interest Rate Risk - Interest rate risk is present due to variable interest rate agreements, with potential increases in interest rates impacting net income[281]. - A hypothetical 100-basis point increase/decrease in variable interest rates would not have affected interest expense over the next 12 months[284].

Financial Performance - FTAI reported a net income attributable to shareholders of $86,692,000 for Q4 2024, a decrease from $110,025,000 in Q4 2023, representing a decline of approximately 21.2%[22] - The company achieved total revenues of $498,819,000 in Q4 2024, up 59.5% from $312,737,000 in Q4 2023[22] - Adjusted EBITDA for Q4 2024 was $252,015,000, reflecting strong operational performance[2] - FTAI's Aerospace Products segment saw a net income of $346 million for fiscal year 2024, a significant increase of 92% year over year, with Adjusted EBITDA up 138% year over year[7] - Adjusted EBITDA for the year ended December 31, 2024, was $862,050, representing a 44% increase from $597,282 in 2023[27] - Adjusted EBITDA for Aerospace Products was $380,636 for the year ended December 31, 2024, compared to $160,009 in 2023[31] Dividends and Future Guidance - The company declared a cash dividend of $0.30 per ordinary share for Q4 2024, payable on March 24, 2025[3] - FTAI expects 2025 Adjusted EBITDA to be approximately $1.1 to $1.15 billion, with $500 million from Aviation Leasing and $600 to $650 million from Aerospace Products[11] - FTAI is increasing its 2026 Adjusted EBITDA guidance from $1.25 billion to approximately $1.4 billion, reflecting expected growth from the Strategic Capital Initiative[12] Assets and Liabilities - Total assets increased to $4,037,952, up 36% from $2,964,685 in 2023[24] - Current assets rose to $1,226,018, a 83% increase from $671,434 in 2023[24] - Long-term debt increased to $3,440,478, up 37% from $2,517,343 in 2023[24] - Total current liabilities increased to $347,246, a 91% increase from $181,843 in 2023[24] - Shareholders' equity decreased to $81,368, down 54% from $175,349 in 2023[24] - Cash and cash equivalents increased to $115,116, up 27% from $90,756 in 2023[24] - Inventory increased significantly to $551,156, a 74% increase from $316,637 in 2023[24] Strategic Initiatives - The joint venture with IAG Engine Center is expected to add maintenance capacity for 450 modules (150 engines) per year, increasing FTAI's total maintenance capacity to 1,800 CFM56 modules (600 engines)[8] - The company plans to produce an average of 100 modules per quarter at its Montreal facility in fiscal year 2025[11] - The acquisition of a 50% stake in IAG Engine Center is expected to close in the first half of 2025, subject to certain conditions[9]

Financial Performance - Total revenues for the three months ended September 30, 2024, increased by $174.7 million to $465.8 million compared to $291.1 million in the same period of 2023, representing a growth of approximately 60%[158] - Lease income for the three months ended September 30, 2024, was $65.5 million, up from $45.6 million in 2023, an increase of 43.5%[158] - Aerospace products revenue surged to $303.5 million for the three months ended September 30, 2024, compared to $118.7 million in 2023, reflecting a growth of 255.5%[158] - The company reported a net income of $86.5 million for the three months ended September 30, 2024, compared to a net income of $41.3 million in the same period of 2023, an increase of 109.4%[158] - Total revenues increased by $174.7 million for the three months ended September 30, 2024, driven by a $184.8 million increase in aerospace products revenue and a $19.8 million increase in lease income[160] - Net income attributable to shareholders increased by $52.5 million (127.0%) for the three months ended September 30, 2024, compared to the same period in 2023[183] - Adjusted EBITDA increased by $58.5 million (135.2%) for the three months ended September 30, 2024, compared to the same period in 2023[184] Expenses and Costs - The company incurred total expenses of $316.5 million for the three months ended September 30, 2024, compared to $206.4 million in 2023, an increase of 53.5%[158] - Total expenses increased by $110.1 million for the three months ended September 30, 2024, primarily due to a $102.8 million increase in cost of sales[161] - Total expenses increased by $128.5 million (168.3%) for the three months ended September 30, 2024, compared to the same period in 2023[181] - Total expenses increased by $286.3 million (148.5%) for the nine months ended September 30, 2024, compared to the same period in 2023[181] - The provision for income taxes increased by $3.6 million for the three months ended September 30, 2024, due to higher income generated from leasing and aerospace activities[162] - Depreciation and amortization expense increased by $11.3 million in Q3 2024, driven by an increase in the number of assets owned and on lease[175] Management and Internalization - The internalization of management was completed on May 28, 2024, eliminating management fees and incentive distributions to the former manager[149] - The company anticipates savings in operational costs as a result of the management internalization effective May 28, 2024[198] - The internalization fee to the affiliate amounted to $300.0 million, significantly impacting the company's financials[190] Assets and Liquidity - Total consolidated assets as of September 30, 2024, were $3.7 billion, with total equity of $118.5 million[148] - The company owns and manages 393 aviation assets as of September 30, 2024, including 96 commercial aircraft and 297 engines[167] - As of September 30, 2024, the company had 86 commercial aircraft and 184 engines leased, with an aviation equipment utilization rate of approximately 79%[168] - The principal sources of liquidity include revenues from aviation assets, proceeds from borrowings, and asset sales[197] - The company expects to meet future short-term liquidity requirements through cash on hand and unused borrowing capacity[5] Debt and Interest - Interest expense increased by $17.8 million, reflecting an increase in average debt outstanding of approximately $913.0 million, primarily due to new Senior Notes issued in 2024[166] - Additional borrowings included $800 million in Senior Notes due 2031 and $700 million in Senior Notes due 2030[1] - A hypothetical 100-basis point increase in variable interest rates would result in an increase of approximately $1.5 million in interest expense over the next 12 months[6] Acquisitions - The company acquired LMCES in September 2024 and QuickTurn in December 2023 to enhance its aerospace products segment and establish permanent manufacturing capabilities[176] Cash Flow - Cash used for investments was $1.0 billion in the nine months ended September 30, 2024, compared to $562.8 million in the same period of 2023[1] - Cash flows used in operating activities were $(146.2) million for the nine months ended September 30, 2024, compared to $116.8 million in 2023, reflecting a $262.9 million increase in cash used[1] - Net cash used in investing activities increased by $251.6 million, primarily due to business acquisitions and deposits for aircraft and engines[2] - Net cash provided by financing activities increased by $535.9 million, driven by $1.6 billion in proceeds from debt[3] Impairments and Losses - The company recognized an impairment charge of $120 million related to leasing equipment assets due to the impact of sanctions on Russian airlines[151] - The net loss attributable to shareholders increased by $11.4 million in Q3 2024 and $333.8 million for the nine months ended September 30, 2024[193]

Financial Performance - FTAI Aviation Ltd. reported a net income attributable to shareholders of $78,147,000 for Q3 2024, compared to $32,973,000 in Q3 2023, representing a 137% increase year-over-year[2][14]. - Total revenues for Q3 2024 were $465,794,000, a 60% increase from $291,096,000 in Q3 2023[14]. - Aerospace products revenue surged to $303,469,000 in Q3 2024, compared to $118,675,000 in Q3 2023, reflecting a 155% growth[14]. - For the nine months ended September 30, 2024, net income was $(118,771), a decrease of 216% compared to $101,997 in the same period of 2023[19]. - Nine-month Adjusted EBITDA increased to $610,035, reflecting a growth of 40.2% from $434,951 in the prior year[19]. - The company reported a loss of $(438) for Q3 2024, compared to a net income of $46 in Q3 2023[20]. Adjusted EBITDA - The company achieved an Adjusted EBITDA of $232,030,000 in Q3 2024, with over $100 million generated from Aerospace Products[2][6]. - Adjusted EBITDA for Q3 2024 reached $232,030, up 50.5% from $154,218 in Q3 2023[19]. Assets and Liabilities - FTAI's total assets increased to $3,738,910,000 as of September 30, 2024, up from $2,964,685,000 at the end of 2023[16]. - The company's total liabilities rose to $3,620,378,000 as of September 30, 2024, compared to $2,788,802,000 at the end of 2023[16]. - FTAI's cash and cash equivalents increased to $111,888,000 as of September 30, 2024, from $90,756,000 at the end of 2023[16]. Expenses - Equity-based compensation expense for Q3 2024 was $1,430, up from $510 in Q3 2023, indicating a rise of 180%[19]. - Acquisition and transaction expenses for Q3 2024 totaled $9,341, an increase of 119% from $4,261 in Q3 2023[19]. - Interest expense and dividends on preferred shares for Q3 2024 were $66,272, compared to $48,519 in Q3 2023, marking a 36.5% increase[19]. - Depreciation and amortization expense for Q3 2024 was $69,453, up from $59,380 in Q3 2023, reflecting a rise of 17.5%[19]. - Internalization fee to affiliate for Q3 2024 was $300,000, a new expense not present in Q3 2023[19]. Dividends and Future Outlook - The company declared a cash dividend of $0.30 per ordinary share for the quarter ended September 30, 2024[3]. - The company plans to host a conference call on October 31, 2024, to discuss these results and future outlook[7]. Lease Income - Lease income rose to $65,450,000 in Q3 2024, up from $45,622,000 in Q3 2023, marking a 43% increase[14].