FTAI Aviation(FTAI) - 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 $477.5 million, compared to a loss of $32.1 million in 2024[183] - Total expenses for 2025 were $1.77 billion, an increase of 17.9% from $1.50 billion in 2024[183] - Adjusted EBITDA increased by $328.9 million to $1,190.9 million in 2025, reflecting improved performance across segments[188] - Net income attributable to shareholders rose to $477.5 million in 2025, a $509.6 million increase compared to a net loss of $32.1 million in 2024[184] - Total revenues for 2025 reached $1,936.2 million, an increase of $856.4 million compared to 2024[200] - Net income attributable to shareholders for 2025 was $548.3 million, up by $202.0 million from 2024[201] - Adjusted EBITDA for 2025 increased to $671.3 million, a rise of $290.6 million compared to 2024[202] Revenue Breakdown - Aerospace products revenue reached $1.60 billion, a 48.3% increase from $1.08 billion in 2024[183] - 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] - 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] - MRE Contract revenue rose to $335.8 million, reflecting increased engine and module sales to the 2025 Partnership[204] Expenses and Charges - The company recognized an impairment charge of $120.0 million for leasing equipment assets due to the impact of sanctions related to Russia's invasion of Ukraine[174] - 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] - Total expenses decreased by $38.1 million in 2025, reflecting a reduction in sales transactions of commercial aircraft and engines[213] - Total expenses increased by $287.4 million, driven by a $300.0 million internalization fee to an affiliate[229] Strategic Initiatives - The Strategic Capital Initiative raised $2.0 billion in equity commitments for the 2025 Partnership, focusing on acquiring 737NG and A320ceo aircraft[177] - The company launched FTAI Power in December 2025, focusing on converting CFM56 engines to power turbines[195] - The company launched a Strategic Capital Initiative with $2.0 billion in equity commitments for acquiring aircraft[239] Asset Management - 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 Aviation Leasing segment managed 290 aviation assets, including 47 commercial aircraft and 243 engines[208] - The utilization rate of aviation equipment was approximately 77% during the last quarter of 2025[209] Cash Flow and Liquidity - Cash used for investments was $1,130.3 million in 2025, compared to $1,526.2 million in 2024[246] - Net cash used in operating activities increased by $122.8 million, reflecting adjustments related to net income[248] - The company expects to meet future liquidity requirements through cash on hand and unused borrowing capacity[251] Interest Rate and Risk Management - The company is exposed to interest rate risk, particularly related to its Revolving Credit Facility, which may affect net income due to variable interest rates[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] - Changes in interest rates could cause fluctuations in the company's results of operations and cash flows, highlighting the importance of managing interest rate exposure[267] Maintenance and Asset Valuation - 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, and are crucial for funding major maintenance events[257] - 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 performs recoverability assessments of long-lived assets whenever indicators suggest that the carrying amount may not be recoverable, which could lead to impairment charges[262] - Goodwill is tested for impairment at least annually, with management making assumptions about industry and economic factors[265]