FTAI Aviation Ltd

Previous wording

We own, lease and sell aviation equipment. We also develop and manufacture through a joint venture, and repair and sell, through our maintenance facility and exclusivity arrangements, aftermarket components for aircraft engines. Additionally, we own and lease offshore energy equipment. We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation. We believe that there is a large number of acquisition opportunities in our markets and that our Manager’s expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities. We are externally managed by FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), which has a dedicated team of experienced professionals focused on the acquisition of transportation assets since 2002. As of December 31, 2023, we had total consolidated assets of $3.0 billion and total equity of $175.9 million.

Current wording

We own, lease and sell aviation equipment. We also develop and manufacture through a joint venture, and repair and sell, through our maintenance facilities and exclusivity arrangements, aftermarket components for aircraft engines. We target assets that, on a combined basis, generate strong cash flows with potential for earnings growth and asset appreciation. We believe that there is a large number of acquisition opportunities in our markets and that our expertise and business and financing relationships, together with our access to capital, will allow us to take advantage of these opportunities. As of December 31, 2024, we had total consolidated assets of $4.0 billion and total equity of $81.4 million.

Previous wording

Our lessees are required to provide insurance coverage with respect to leased aircraft and engines, and we are named as insureds under those policies in the event of a total loss of an aircraft or engine. We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us. The insured value of the aircraft and engines that remain in Russia is approximately $210.7 million. We intend to pursue all our claims under these policies. However, the timing and amount of any recoveries under these policies are uncertain.

Current wording

Our lessees are required to provide insurance coverage with respect to leased aircraft and engines, and we are named as insureds under those policies in the event of a total loss of an aircraft or engine. We also purchase insurance which provides us with coverage when our aircraft or engines are not subject to a lease or where a lessee’s policy fails to indemnify us. The insured value of the aircraft and engines that remain in Russia is $210.7 million. We intend to pursue all of our claims under these policies. However, the timing and amount of any recoveries under these policies are uncertain.

Previous wording

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

Current wording

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

Previous wording

In connection with the spin-off, the Company and the Manager assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Manager executed an amended and restated agreement. The Company and certain of its subsidiaries executed a new management agreement with the Manager. The new management agreement has an initial term of six years. The Manager is entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Manager, which were assigned to FTAI Infrastructure. Prior to the Merger described below, our Manager remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off. Following the Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and

Current wording

In connection with the spin-off, the Company and the Former Manager assigned the Company’s then-existing management agreement to FTAI Infrastructure, and FTAI Infrastructure and the Former Manager executed an amended and restated agreement. The Company and certain of its subsidiaries executed a new management agreement with the Former Manager. The new management agreement has an initial term of six years. The Former Manager was entitled to a management fee and reimbursement of certain expenses on substantially similar terms as the previous arrangements with the Former Manager, which were assigned to FTAI Infrastructure. Prior to the Merger described below, our Former Manager remained entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation) on the same terms as they existed prior to spin-off. Following the Former Merger, the Company entered into a Services and Profit Sharing Agreement (the “Services and Profit Sharing Agreement”), with a subsidiary of the Company and Fortress Worldwide Transportation and Infrastructure Master GP LLC (“Master GP”), pursuant to which Master GP is entitled to incentive payments on substantially similar terms as the previous arrangements.

Previous wording

The key factors used to identify the reportable segments are the organization and alignment of our internal operations and the nature of our products and services. Our two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to customers. The Aerospace Products segment develops and manufactures through a joint venture, repairs and sells, through our maintenance facility and exclusivity arrangements, aircraft engines and aftermarket components for aircraft engines. During the fourth quarter of 2023, the Company changed the composition of its operating segments to include product offerings for V2500 engines within the Aerospace Products segment. Prior periods have been restated to reflect the change in accordance with the requirements of ASC 280, Segment Reporting. See Note 2 for additional information.

Current wording

The key factors used to identify the reportable segments are the organization and alignment of our internal operations and the nature of our products and services. Our two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to lessees and customers. The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines.

Previous wording

Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, shared services costs, and management fees. Additionally, Corporate and Other also includes offshore energy related assets, which consist of vessels and equipment that support offshore oil and gas activities and production which are typically subject to operating leases.

Current wording

Corporate and Other primarily consists of debt, unallocated corporate general and administrative expenses, internalization fee and management fees and incentive compensation pursuant to the Management Agreement prior to the Internalization effective May 28, 2024. Additionally, Corporate and Other also includes offshore energy related assets, which consist of equipment that support offshore oil and gas activities and production.

Previous wording

The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance and make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.

Current wording

Besides net income (loss), the chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as a key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance and make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.

Previous wording

Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares and interest expense, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.

Current wording

Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and preferred shares and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, dividends on preferred shares and interest expense, internalization fee to affiliate, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA, if any.

Previous wording

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

Current wording

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

Previous wording

(1)Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) depreciation and amortization expense of $169,877, $152,917 and $147,740, (ii) lease intangible amortization of $15,126, $13,913 and $4,993 and (iii) amortization for lease incentives of $28,638, $23,201 and $22,985, respectively.

Current wording

(1)Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) depreciation and amortization expense of $218,064, $169,877 and $152,917, (ii) lease intangible amortization of $15,597, $15,126 and $13,913 and (iii) amortization for lease incentives of $28,370, $28,638 and $23,201, respectively.

Previous wording

(2) Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net loss of $1,606, $369 and $1,403, (ii) depreciation and amortization expense of $1,488, $409 and $200 and (iii) acquisition and transaction expense of $428, $0 and $0, respectively.

Current wording

(2) Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net loss of $2,200, $1,606 and $369, (ii) depreciation and amortization expense of $308, $1,488 and $409 and (iii) acquisition and transaction expense of $0, $428 and $0, respectively.

Previous wording

During the third quarter of 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities. As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statement of Operations beginning in the third quarter of 2022 and is accounted for in accordance with ASC 606. The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statement of Operations beginning in the third quarter of 2022. Sales transactions of aircraft and engines prior to the third quarter of 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain (loss) on sale of assets, net on the Consolidated Statement of Operations, as we were previously only occasionally selling these assets. Generally, assets sold were included in Leasing equipment, net, on the Consolidated Balance Sheets.

Current wording

During the third quarter of 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities. As a result of this update, the transaction price allocated to the sale of assets is included in Revenues in the Consolidated Statements of Operations beginning in the third quarter of 2022 and is accounted for in accordance with ASC 606. The sale of CFM56-7B, CFM56-5B and V2500 engines are included in the Aerospace Products Segment and the sale of aircraft and other engines are included in the Aviation Leasing Segment. The corresponding net book values of the assets sold are recorded in Cost of sales in the Consolidated Statements of Operations beginning in the third quarter of 2022. Sales transactions of aircraft and engines prior to the third quarter of 2022 were accounted for in accordance with ASC 610-20, Gains and losses from the derecognition of nonfinancial assets and were included in Gain (loss) on sale of assets, net on the Consolidated Statements of Operations, as we were previously only occasionally selling these assets. Generally, assets sold were included in Leasing equipment, net, on the Consolidated Balance Sheets.

Previous wording

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

Current wording

•Lease income increased by $28.6 million, primarily due to an increase in engine lease revenue of $19.7 million, driven by an increased number of engines on lease, partially offset by an increase in the number of engines redelivered. An increase of $7.4 million in the Offshore Energy business due to one of our vessel being on-hire longer in 2023 compared to 2022, and with a charterer at higher rates.

Previous wording

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

Current wording

•Cost of sales increased by $253.7 million, primarily due to an increase of $170.8 million in our Aerospace Products segment, primarily due to increases in CFM56-7B, CFM56-5B and V2500 engine and module sales, parts inventory sales, and directly corresponds to components of increases in Aerospace products revenue over the same period. An increase of $82.9 million in the Aviation Leasing segment primarily due to an overall increase in the number of material sales transactions of commercial aircraft and engines, as well as the gross presentation of asset sales revenues and related costs of sales as described above.

Previous wording

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

Current wording

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

Previous wording

Asset impairment decreased $135.1 million primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable. See Note 5 to the consolidated financial statements for additional information.

Current wording

•Asset impairment decreased by $135.1 million, primarily due to the 2022 write down of aircraft and engines located in Russia and Ukraine that were deemed not recoverable. See Note 6 to the consolidated financial statements for additional information.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

•an increase of $12.8 million in the Offshore Energy business which reflects increases in offshore crew expenses of $2.1 million, project costs of $3.9 million and other operating expenses of $1.3 million for one of our vessels driven by increased cost of operations based on the operating location of the vessel, as well as increased number of days on-hire. Additionally, repairs and maintenance expense increased $0.6 million due to repairs on one of our vessels.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

•Loss on extinguishment of debt of $19.9 million was recognized during 2022. This loss was related to the pay-down of the 2021 Bridge Loan, issued in December 2021 and February 2022, and the partial redemption of Senior Notes due 2025.

Previous wording

The benefit from income taxes increased $65.1 million primarily due to the Company establishing a deferred tax asset of $72.2 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023. See Note 11 to the consolidated financial statements for additional information.

Current wording

The benefit from income taxes increased$65.1 million primarily due to the Company establishing a deferred tax asset of $72.2 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023. See Note 12 to the consolidated financial statements for additional information. The benefit was offset by a $7.1 million increase from income taxes primarily attributable to an increase in income generated from operating activities in jurisdictions subject to taxes. As the Company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

As of December 31, 2023, 76 of our commercial aircraft and 175 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease. Our aviation equipment was approximately 77% utilized during the three months ended December 31, 2023, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes. Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 16 months. The table below provides additional information on the assets in our Aviation Leasing segment:

Current wording

As of December 31, 2024, 94 of our commercial aircraft and 181 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease. Our aviation equipment was approximately 76% utilized during the three months ended December 31, 2024, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes. Our aircraft currently have a weighted average remaining lease term of 47 months, and our engines currently on-lease have an average remaining lease term of 22 months. The table below provides additional information on the assets in our Aviation Leasing segment, including transfers which involve aircraft breakdowns, engine transfers from leasing equipment to inventory for manufacturing and sales, and engine transfers from inventory to leasing equipment for rebuilding and sales:

Previous wording

(1)Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) depreciation expense of $158,354, $144,258 and $139,678, (ii) lease intangible amortization of $15,126, $13,913 and $4,993 and (iii) amortization for lease incentives of $28,638, $23,201 and $22,985, respectively.

Current wording

(1)Includesthe following items for the years ended December 31, 2024, 2023 and 2022: (i) depreciation expense of $201,497, $158,354 and $144,258, (ii) lease intangible amortization of $15,597, $15,126 and $13,913 and (iii) amortization for lease incentives of $28,370, $28,638 and $23,201, respectively.

Previous wording

(2)Includes the following items for the years ended December 31, 2023, 2022 and 2021: (i) net (loss) income of $(148), $740 and $0 and (ii) depreciation and amortization of $252, $185 and $0, respectively.

Current wording

(2)Includes the following items for the years ended December 31, 2024, 2023 and 2022: (i) net (loss) income of $(207), $(148) and $740 and (ii) depreciation and amortization of $84, $252 and $185, respectively.

Previous wording

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

Current wording

•Other revenue decreased by $6.4 million, primarily due to a decrease in end-of-lease redelivery compensation. During 2024, one aircraft and three engines had end-of-lease redelivery compensation, as compared to eight aircraft and four engines in 2023.

Previous wording

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

Current wording

•Other revenue decreased $4.1 million primarily due to a decrease in end-of-lease redelivery compensation. During 2023, eight aircraft and four engines had end-of-lease redelivery compensation, as compared to 18 aircraft and one engine in 2022.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

The benefit from income taxes increased $38.7 million primarily due to the Company establishing a deferred tax asset of $46.6 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023. See Note 11 to the consolidated financial statements for additional information.

Current wording

The benefit from income taxes increased $38.7 million primarily due to the Company establishing a deferred tax asset of $46.6 million in connection with a tax law change in Bermuda, which was recorded as a benefit from income taxes during the fourth quarter of 2023. See Note 12 to the consoli dated financial statements for additional information. The benefit was offset by a $7.9 million increase from income taxes primarily attributable to an increase in income generated from leasing activities in jurisdictions subject to taxes. As the Company’s operations in these areas grew, so did the corresponding tax obligations, resulting in a higher provision for income taxes.

Previous wording

The Aerospace Products segment develops and manufactures through a joint venture, repairs and sells, through our maintenance facility and exclusivity arrangements, aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines. Our engine and module sales are facilitated through The Module Factory, a dedicated commercial maintenance program, designed to focus on modular repair and refurbishment of CFM56-7B and CFM56-5B engines, performed by a third party. Used serviceable material is sold through our exclusive partnership with AAR Corp, who is responsible for the teardown, repair, marketing and sales of spare parts from our CFM56 engine pool. In December 2023, we acquired the remaining interest in Quick Turn Engine Center LLC or “QuickTurn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine. Refer to Note 4 “Acquisition of QuickTurn”, for additional information. We also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.

Current wording

The Aerospace Products segment, through our maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines. Our engine, module and parts sales are facilitated through a dedicated commercial maintenance program, designed to focus on modular and parts repair and refurbishment of CFM56-7B, CFM56-5B and V2500 engines. In September 2024, we acquired LMCES to further enhance this business and establish permanent engine and module manufacturing capabilities. Refer to Note 4 “Acquisition of Lockheed Martin Commercial Engine Solutions”, for additional information. In addition, other serviceable used modules and parts are sold through our exclusive partnership, who is responsible for the teardown, repair, marketing and sales of parts from our CFM56 engine pool. In December 2023, we acquired the remaining interest in Quick Turn Engine Center LLC or “QuickTurn” (previously iAero Thrust LLC), a hospital maintenance and testing facility dedicated to the CFM56 engine. Refer to Note 5 “Acquisition of QuickTurn”, for additional information. We also hold a 25% interest in the Advanced Engine Repair JV which focuses on developing new cost savings programs for engine repairs.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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