FTAI AVIATION(FTAIM) - 2025 Q4 - Annual Report

Financial Performance - Total revenues for the year ended December 31, 2025, increased to $2.51 billion, up 44.6% from $1.73 billion in 2024[183] - Net income attributable to shareholders for 2025 was $477.49 million, a substantial increase from a loss of $32.08 million in 2024[183] - Adjusted EBITDA increased by $328.9 million to $1,190.9 million in 2025, reflecting improved performance across segments[188] - Total revenues increased by $772.5 million in 2025, driven by a $520.6 million increase in Aerospace products revenue and a $335.8 million increase in MRE Contract revenue[185] - Net income attributable to shareholders rose to $548.3 million, reflecting an increase of $202.0 million from 2024[201] - Adjusted EBITDA for 2025 increased by $108.9 million to $608.9 million compared to $500.1 million in 2024[216] Revenue Breakdown - Aerospace products revenue reached $1.60 billion in 2025, a significant increase of 48.5% compared to $1.08 billion in 2024[183] - MRE Contract revenue was $335.79 million in 2025, with no prior year comparison available[183] - Lease income decreased to $235.21 million in 2025 from $255.34 million in 2024, a decline of 7.9%[183] - Aerospace products revenue increased by $624.9 million in 2024, primarily due to a $546.0 million increase in engine and module sales[190] - Aerospace products revenue increased by $520.6 million, primarily driven by a $499.7 million increase in engine and module sales[204] Expenses and Costs - Total expenses for 2025 were $1.77 billion, an increase of 17.9% from $1.50 billion in 2024[183] - Total expenses increased by $269.0 million in 2025, with cost of sales rising by $523.8 million due to increased engine and module sales[185] - Total expenses for 2025 were $1,293.8 million, an increase of $584.6 million from the previous year[200] - Total expenses decreased by $38.1 million in 2025, driven by a reduction in sales transactions of commercial aircraft and engines[213] - Total expenses decreased by $277.4 million in 2025, largely due to the internalization fee to affiliate of $300.0 million in 2024[224] Taxation - The provision for income taxes increased by $100.1 million in 2025, driven by higher income in the Aerospace Products and Aviation Leasing segments[186] - The provision for income taxes increased by $80.2 million, primarily due to higher income from Aerospace Products activities[200] - Provision for income taxes increased by $29.3 million in 2025, reflecting changes in income from leasing activities[214] Strategic Initiatives - The Strategic Capital Initiative launched in December 2024 raised $2.0 billion in equity commitments for acquiring on-lease aircraft[177] - The company launched FTAI Power in December 2025, focusing on converting CFM56 engines to power turbines[195] - The company acquired Lockheed Martin Commercial Engine Solutions (LMCES) in 2024 to establish permanent engine and module manufacturing capabilities[196] Assets and Liabilities - Total consolidated assets as of December 31, 2025, were $4.4 billion, with total equity of $334.2 million[171] - As of December 31, 2025, the company had outstanding principal and interest payment obligations of $3.5 billion and $1.2 billion, respectively[248] Cash Flow - Cash used for investments was $1,130.3 million during the year ended December 31, 2025[246] - Net cash used in operating activities increased by $122.8 million, reflecting adjustments related to net income[248] - Cash dividends declared during the year ended December 31, 2025, were $128.2 million on ordinary shares and $17.2 million on preferred shares[250] Impairment and Recoverability - The company recognized an impairment charge of $120 million in 2022 due to the impact of sanctions related to Russia's invasion of Ukraine[174] - The company performs a recoverability assessment of long-lived assets whenever indicators suggest that the carrying amount may not be recoverable[262] - Goodwill is tested for impairment at least annually during the fourth quarter, or more frequently if circumstances indicate potential impairment[264] - The company assesses the recoverability of goodwill using qualitative evaluations or quantitative tests based on industry and economic factors[265] Interest Rate Risk - The company is exposed to interest rate risk due to certain borrowing agreements requiring payments based on a variable interest rate index, such as SOFR[268] - A hypothetical 100-basis point increase/decrease in the variable interest rate on borrowings would not have increased or decreased interest expense over the next 12 months as of December 31, 2025[271] Maintenance and Lease Accounting - The company recognizes maintenance payments as current and non-current Maintenance Deposits in the Consolidated Balance Sheets, with excess payments recorded as Maintenance revenue[258] - Maintenance payments are typically required to be made monthly in arrears, based on hours or cycles of utilization[257] - The company recognizes lease discounts or premiums as lease intangibles, amortized into lease income over the remaining term of the lease[261] - The estimated useful life of aircraft is 25 years from the date of manufacture, with residual value estimates generally not exceeding 15% of the manufacturer's list price when new[260] - The company allocates consideration in purchase and leaseback transactions based on the relative fair value of the aircraft and lease[256]