FTAI Aviation (FTAI) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Instability in geographies where we have assets or where we derive revenue could have a material adverse effect on our business, customers, lessees, operations and financial results
2. 02The aviation industry has experienced periods of oversupply during which lease rates and asset values have declined, particularly during economic downturns, and any future oversupply could materially adversely affect our results of operations and cash flows
3. 03The aviation industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer79% rewritten
4. 04approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operationsNew
5. 05The retirement or prolonged grounding of commercial aircraft could reduce our revenues and the value of any related inventory
6. 06Contractual defaults may adversely affect our business, prospects, financial condition, results of operations and cash flows by decreasing revenues and increasing storage, positioning, collection, recovery and lost equipment expenses
7. 07We acquire a high concentration of CFM-56-5B, CFM56-7B and V2500 engines and related parts and our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector
8. 08We operate in highly competitive markets
9. 09Market competition for our Aerospace Products business includes engine manufacturers, engine component and parts manufacturers, airline and aircraft service companies, companies providing maintenance, repair and overhaul services and aircraft spare parts distributors and redistributors
10. 10The success of our Aerospace Products segment is dependent upon our ability to manage our operational footprint
11. 11Certain liens may arise on our assets
12. 12The values of our assets may fluctuate due to various factors
13. 13We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness
14. 14Our use of joint ventures or partnerships may present unforeseen obstacles or costs
15. 15Our Strategic Capital Initiative involves certain risks which could adversely affect our business, prospects, financial condition, results of operations and cash flows46% rewritten
16. 16future partnerships. If the 2025 Partnership and future partnerships are not successful, that will have an adverse affect on our results of operations and cash flowsNew
17. 17We are subject to the risks and costs of obsolescence of our assets
18. 18The inability to obtain certain components from suppliers could harm our business
19. 19We could be negatively impacted by environmental, social, and governance (ESG) and sustainability-related matters
20. 20Our assets generally require routine maintenance, and we may be exposed to unforeseen maintenance costs
21. 21Our customers and lessees operate in highly regulated industries and changes in laws or regulations, including laws with respect to international trade, may adversely affect our ability to lease or sell our assets
22. 22We may not be able to renew or obtain new or favorable leases, which could adversely affect our business, prospects, financial condition, results of operations and cash flows
23. 23Litigation to enforce our contracts and recover our assets has inherent uncertainties that are increased by the location of our assets in jurisdictions that have less developed legal systems
24. 24Our international operations involve additional risks, which could adversely affect our business, prospects, financial condition, results of operations and cash flows
25. 25We may make acquisitions in emerging markets throughout the world, and investments in emerging markets are subject to greater risks than developed markets and could adversely affect our business, prospects, financial condition, results of operations and cash flows
26. 26We are actively evaluating potential acquisitions of assets and operating companies in other aviation sectors which could result in additional risks and uncertainties for our business and unexpected regulatory compliance costs
27. 27Implementing new or expanded platforms, products and services and keeping pace with technological or process developments in our industries may require significant capital and operational risk
28. 28The agreements governing our indebtedness place restrictions on us and our subsidiaries, reducing operational flexibility and creating default risks
29. 29Terrorist attacks or other hostilities could negatively impact our operations and our profitability and may expose us to liability and reputational damage
30. 30Projects in the aerospace products and services sector are exposed to a variety of unplanned interruptions which could cause our results of operations to suffer53% rewritten
31. 31Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues
32. 32The effects of various environmental regulations may negatively affect the industries in which we operate which could have a material adverse effect on our financial condition, results of operations and cash flows
33. 33We may not realize some or all of the targeted benefits of the Internalization77% rewritten
34. 34If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows
35. 35If we are deemed an “investment adviser” under the Investment Advisers Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows
36. 36We are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers

Risks Related to Taxation

1. 37Investors should consult their tax advisors regarding the potential impact of these rules on their investment in us
2. 38To the extent we recognize income treated as effectively connected with a trade or business in the United States, we would be subject to U.S. federal income taxation on a net income basis, which could adversely affect our business and result in decreased cash available for distribution to our shareholders
3. 39We or our subsidiaries may become subject to increased and/or unanticipated tax liabilities that may have a material adverse effect on our results of operations62% rewritten

Risks Related to Our Shares

1. 40The market price and trading volume of our ordinary and preferred shares may be volatile, which could result in rapid and substantial losses for our shareholders
2. 41Short sellers have and may in the future engage in activity intended to drive down the market price of our ordinary shares, which could in the future result in related governmental and regulatory scrutiny, among other effects
3. 42An increase in market interest rates may have an adverse effect on the market price of our shares
4. 43We are required by Section 404 of the Sarbanes-Oxley Act to evaluate the effectiveness of our internal controls, and the outcome of that effort may adversely affect our results of operations, financial condition and liquidity
5. 44Your percentage ownership in FTAI Aviation Ltd. may be diluted in the future because of equity awards that we expect will be granted to our directors, officers and employees, as well as other equity instruments such as debt and equity financing79% rewritten
6. 45Sales or issuances of our ordinary shares could adversely affect the market price of our ordinary shares
7. 46Our determination of how much leverage to use to finance our acquisitions may adversely affect our return on our assets and may reduce funds available for distribution
8. 47While we currently intend to pay regular quarterly dividends to our shareholders, we may change our dividend policy at any time
9. 48Anti-takeover provisions in our Articles could delay or prevent a change in control
10. 49If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our ordinary shares, our share price and trading volume could decline