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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐	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: 001-42298

StandardAero, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	30-1138150
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6710 North Scottsdale Road, Suite 250 Scottsdale, Arizona	85253
(Address of principal executive offices)	(Zip Code)

(480) 377-3100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

      Title of each class

      Trading
Symbol(s)

      Name of each exchange on which registered

      Common stock, par value $0.01 per share

      SARO

      New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 6, 2025, the registrant had 334,470,264 shares of common stock, $0.01 par value per share, outstanding.

TABLE OF CONTENTS


		Page
GLOSSARY		1
FORWARD-LOOKING STATEMENTS		4

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	46

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other information	48
Item 6.	Exhibits	50
	Signatures	51

GLOSSARY

Unless the context otherwise requires or we otherwise state, references in this Quarterly Report on Form 10-Q ("Quarterly Report") to:

•

the term “Acquisition” refers to the acquisition by Dynasty Acquisition Co., Inc., pursuant to that certain stock purchase agreement as amended, restated, supplemented or otherwise modified from time to time, dated December 18, 2018, of all of the equity interests of StandardAero Holding Corp., a Delaware corporation;

•

the term “Canadian Borrower” refers to Standard Aero Limited Standaero Limitee (as successor in interest to 1199169 B.C. Unlimited Liability Company) that is the indirect wholly owned subsidiary of the Company;

•

the term “Carlyle” refers to those certain investment funds of The Carlyle Group Inc. and its affiliates;

•

the term “Carlyle Partners VII” refers to Carlyle Partners VII S1 Holdings II, L.P.;

•

the term “Dynasty Acquisition” refers to Dynasty Acquisition Co., Inc., a Delaware corporation that is the indirect wholly owned subsidiary of the Company;

•

the term “Exchange Act” refers to the U.S. Securities and Exchange Act of 1934, as amended;

•

the term “GAAP” refers to the generally accepted accounting principles in the United States;

•

the term “GIC” refers to GIC Private Limited;

•

the term “GIC Investor” refers to Hux Investment Pte Ltd.;

•

the term “March Secondary Offering” refers to the public offering of 36,000,000 shares of common stock by the selling stockholders at a price to the public of $28.00 per share, which was completed in March 2025;

•

the term “May Secondary Offering” refers to the public offering of 34,500,000 shares of common stock by the selling stockholders (including the full exercise by the underwriters of their option to purchase up to an additional 4,500,000 shares) at a price to the public of $28.00 per share, which was completed in May 2025;

•

the term “New 2024 Revolving Credit Facility” refers to a senior secured multicurrency revolving credit facility available to the U.S. Borrower in an aggregate principal amount of up to $750.0 million (of which up to $150.0 million is available for the issuance of letters of credit);

•

the term “New 2024 Term Loan B-1 Facility” refers to a senior secured dollar term loan B facility, incurred by the U.S. Borrower in an aggregate principal amount of $1,630.0 million;

•

the term “New 2024 Term Loan B-2 Facility” refers to a senior secured dollar term loan B facility incurred by the Canadian Borrower in an aggregate principal amount of $620.0 million;

•

the term “New 2024 Term Loan Facilities” means, together, the New 2024 Term Loan B-2 Facility and the New 2024 Term Loan B-1 Facility;

•

the term the “New Credit Agreement” refers to that certain New Credit Agreement (as amended, restated, modified and/or supplemented from time to time), dated as of October 31, 2024, governing the New Senior Credit Facilities;

•

the term “New Senior Secured Credit Facilities” refers to, collectively, (i) the New 2024 Term Loan Facilities and (ii) the New 2024 Revolving Credit Facility;

•

the term “Prior 2023 Term B-1 Loan Facility” refers to the senior secured dollar term loan B facility in an original aggregate principal amount of $1,802.5 million;

•

the term “Prior 2023 Term B-1 Loans” refers to the senior secured dollar term loans incurred under the Prior 2023 Term B-1 Loan Facility by Dynasty Acquisition pursuant to the Prior Credit Agreement;

•

the term “Prior 2023 Term B-2 Loan Facility” refers to the senior secured dollar term loan B facility in an original aggregate principal amount of $772.5 million;

•

the term “Prior 2023 Term B-2 Loans” refers to the senior secured dollar term loans incurred under the Prior 2023 Term B-2 Loan Facility by the Canadian Borrower, pursuant to the Prior Credit Agreement;

•

the term “Prior 2023 Term Loan Facilities” refers, collectively, to (i) the Prior 2023 Term B-1 Loan Facility and (ii) the Prior 2023 Term B-2 Loan Facility;

•

the term “Prior 2023 Term Loans” refers, collectively, to (i) the Prior 2023 Term B-1 Loans and (ii) the Prior 2023 Term B-2 Loans;

•

the term “Prior 2023 Revolving Credit Facility” refers to the senior secured multicurrency revolving credit facility in an aggregate principal amount of up to $150.0 million (of which up to $75.0 million is available for the issuance of letters of credit);

•

the term “Prior 2024 Term B-1 Loan Facility” refers to the senior secured dollar term loan B facility in an original aggregate principal amount of approximately $1,993.5 million;

•

the term “Prior 2024 Term Loan B-2 Facility” refers to the senior secured dollar term loan B facility in an original aggregate principal amount of approximately $768.6 million”;

•

the term “Prior 2024 Term Loan Facilities” refers collectively to the Prior 2024 Term B-1 Loan Facility and the 2024 Term Loan B-2 Facility;

•

the term “Prior ABL Credit Agreement” refers to that certain ABL Credit Agreement (as amended, restated, modified and/or supplemented from time to time), dated as of April 4, 2019, governing the ABL Credit Facility;

•

the term “Prior ABL Credit Facility” refers to the senior secured asset-based multicurrency revolving credit facilities in an aggregate principal amount of up to $400.0 million;

•

the term “Prior Credit Agreement” refers to that certain Credit Agreement (as amended, restated, modified and/or supplemented from time to time), dated as of April 4, 2019, governing the Prior Credit Facilities;

•

the term “Prior Credit Facilities” refers, collectively, to (i) the Prior 2024 Term Loan Facilities and (ii) the Prior 2023 Revolving Credit Facility;

•

the term “Prior Indenture” refers to that certain indenture (as amended, restated, modified and/or supplemented from time to time), dated as of April 4, 2019, by and among Dynasty Acquisition, as issuer, the guarantors party thereto and U.S. Bank National Association, as trustee, governing the Prior Senior Notes;

•

the term “Prior Senior Notes” refers to the $475.5 million aggregate principal amount of Senior Unsecured PIK Toggle Notes due 2027 issued by Dynasty Acquisition pursuant to the Indenture;

•

the term “Prior Senior Secured Credit Agreements” refers, collectively, to (i) the Prior Credit Agreement and (ii) the Prior ABL Credit Agreement;

•

the term “Prior Senior Secured Credit Facilities” refers, collectively, to (i) the Prior Credit Facilities and (ii) the ABL Credit Facility;

•

the term “SEC” refers to the U.S. Securities and Exchange Commission;

•

the term “Securities Act” refers to the U.S. Securities Act of 1933, as amended;

•

the term “Stockholders Agreement” refers to the stockholders agreement entered into by and among Carlyle Partners VII, the GIC Investor, certain of our other existing stockholders and the Company;

•

the term “U.S. Borrower” refers to Dynasty Acquisition Co., Inc.; and

•

the terms “we,” “us,” “our,” “its” and the “Company” refer to StandardAero, Inc., a Delaware corporation, and its consolidated subsidiaries.

Certain monetary amounts, percentages and other figures included in this Quarterly Report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables and charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy, and plans and objectives of management for future operations, including, among others, expected growth, future capital expenditures, and debt service obligations are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions.

The forward-looking statements in this Quarterly Report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We believe that these factors include, risks related to conditions that affect the commercial and business aviation industries; decreases in budget, spending or outsourcing by our military end-users; risks from any supply chain disruptions or loss of key suppliers; increased costs of labor, equipment, raw materials, freight and utilities due to inflation; future outbreaks and infectious diseases; risks related to competition in the market in which we participate; loss of an OEM authorization or license; risks related to a significant portion of our revenue being derived from a small number of customers; our ability to remediate effectively the material weaknesses identified in our internal control over financial reporting; our ability to respond to changes in GAAP; our or our third-party partners' failure to protect confidential information; data security incidents or disruptions to our IT systems and capabilities; our ability to comply with laws relating to the handling of information about individuals; changes to U.S. tariff and import/export regulations; failure to maintain our regulatory approvals; risks relating to our operations outside of North America; failure to comply with government procurement laws and regulations; any work stoppage, hiring, retention or succession issues with our senior management team and employees; any strains on our resources due to the requirements of being a public company; risks related to our substantial indebtedness; risks related to the ownership of our common stock, including the fact that Carlyle owns a significant amount of our voting power; and other factors set forth under “Risk Factors” elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits to this Quarterly Report with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)


Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2025 and December 31, 2024	6
Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2025 and 2024	7
Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2025 and 2024	8
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three and six months ended June 30, 2025 and 2024	9
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2025 and 2024	10
Notes to Consolidated Financial Statements (unaudited)	11

STANDARDAERO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share figures)


	June 30,			December 31.
	2025			2024
ASSETS
Current assets:
Cash	$	91,513		$	102,581
Accounts receivable (less allowance for expected credit losses of $15,020 and $15,455, respectively)		677,257			580,668
Contract assets, net		1,070,834			915,200
Inventories		851,597			847,018
Prepaid expenses and other current assets		56,759			29,707
Income tax receivable		21,054			9,960
Total current assets		2,769,014			2,485,134
Property, plant and equipment, net		575,560			568,607
Operating lease right of use asset, net		217,660			172,206
Customer relationships, net		962,913			1,004,701
Other intangible assets, net		268,275			291,487
Goodwill		1,684,287			1,685,970
Other assets		3,923			4,417
Deferred income tax assets		1,079			1,079
Total assets	$	6,482,711		$	6,213,601
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	643,728		$	645,701
Accrued expenses and other current liabilities		102,201			99,572
Accrued employee costs		72,876			79,134
Operating lease liabilities, current		19,777			17,663
Due to related parties		696			1,345
Contract liabilities		420,229			400,025
Income taxes payable, current		2,259			6,655
Long-term debt, current portion		23,461			23,449
Total current liabilities		1,285,227			1,273,544
Long-term debt		2,295,131			2,207,977
Operating lease liabilities, non-current		208,395			164,224
Deferred income tax liabilities		159,791			169,824
Other non-current liabilities		20,884			24,628
Total liabilities		3,969,428			3,840,197
Commitments and contingencies (Note 11)
Stockholders' equity
Common stock ($0.01 par value, 3,500,000,000 shares authorized; 334,470,264 and 334,461,630 shares issued and outstanding as of June 30, 2025 and December 31, 2024)		3,345			3,345
Preferred stock ($0.01 par value, 100,000,000 shares authorized; no shares were issued)		—			—
Additional paid-in capital		3,950,677			3,944,802
Accumulated deficit		(1,432,665	)		(1,563,321	)
Accumulated other comprehensive loss		(8,074	)		(11,422	)
Total stockholders' equity		2,513,283			2,373,404
Total liabilities and stockholders' equity	$	6,482,711		$	6,213,601

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

STANDARDAERO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share figures)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue	$	1,528,943	$	1,347,198	$	2,964,531	$	2,582,921
Cost of revenue		1,292,768		1,162,592		2,510,626		2,216,904
Selling, general and administrative expense		76,002		56,236		140,477		108,848
Amortization of intangible assets		24,603		23,293		48,935		46,585
Operating income		135,570		105,077		264,493		210,584
Interest expense		43,835		78,051		87,626		155,599
Refinancing costs		—		655		—		4,938
Loss on debt extinguishment		—		—		—		3,577
Income before income taxes		91,735		26,371		176,867		46,470
Income tax expense		24,022		20,967		46,211		37,879
Net income	$	67,713	$	5,404	$	130,656	$	8,591
Earnings per share:
Basic	$	0.21	$	0.02	$	0.40	$	0.03
Diluted	$	0.20	$	0.02	$	0.39	$	0.03
Weighted-average common shares outstanding
Basic		328,445		275,175		328,442		275,175
Diluted		334,300		275,175		334,227		275,175

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

STANDARDAERO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(In thousands)


	Three Months Ended June 30,					Six Months Ended June 30,
	2025		2024			2025		2024
Net income	$	67,713	$	5,404		$	130,656	$	8,591
Other comprehensive income, net of tax:
Unrealized income on cash flow hedge, net of income tax expense of $992 and $737 for the three months ended June 30, 2025 and 2024, respectively, and $365 and $2,708 for the six months ended June 30, 2025 and 2024, respectively		2,634		2,674			628		10,265
Cash flow hedge gain (loss) reclassified to the statement of operations, net of income tax expense (benefit) of $330 and ($508), for the three months ended June 30, 2025 and 2024, respectively, and $826 and ($1,737) for the six months ended June 30, 2025 and 2024, respectively		1,138		(1,856	)		2,720		(6,418	)
Foreign currency translation adjustment		—		(88	)		—		(322	)
Total other comprehensive income		3,772		730			3,348		3,525
Comprehensive income	$	71,485	$	6,134		$	134,004	$	12,116

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

STANDARDAERO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(In thousands, except share figures)


	For the six months ended June 30, 2025
	Common Stock				Additional					Accumulated Other			Total
	Number of Shares		Par Value		Paid-in Capital		Accumulated Deficit			Comprehensive Income (Loss)			Shareholders' Equity
Balance as of December 31, 2024		334,461,630	$	3,345	$	3,944,802	$	(1,563,321	)	$	(11,422	)	$	2,373,404
Net income		—		—		—		62,943			—			62,943
Share based compensation		—		—		2,045		—			—			2,045
Other comprehensive loss, net		—		—		—		—			(424	)		(424	)
Balance as of March 31, 2025		334,461,630	$	3,345	$	3,946,847	$	(1,500,378	)	$	(11,846	)	$	2,437,968
Net income		—		—		—		67,713			—			67,713
Vesting of restricted stock		8,634		—		—		—			—			—
Share based compensation		—		—		3,830		—			—			3,830
Other comprehensive income, net		—		—		—		—			3,772			3,772
Balance as of June 30, 2025		334,470,264	$	3,345	$	3,950,677	$	(1,432,665	)	$	(8,074	)	$	2,513,283


	For the six months ended June 30, 2024
	Common Stock				Additional					Accumulated Other			Total
	Number of Shares		Par Value		Paid-in Capital		Accumulated Deficit			Comprehensive Income (Loss)			Shareholders' Equity
Balance as of December 31, 2023		281,211,630	$	2,812	$	2,725,157	$	(1,574,295	)	$	(6,962	)	$	1,146,712
Net income		—		—		—		3,187			—			3,187
Other comprehensive income, net of tax		—		—		—		—			2,795			2,795
Balance as of March 31, 2024		281,211,630	$	2,812	$	2,725,157	$	(1,571,108	)	$	(4,167	)	$	1,152,694
Net income		—		—		—		5,404			—			5,404
Other comprehensive income, net of tax		—		—		—		—			730			730
Balance as of June 30, 2024		281,211,630	$	2,812	$	2,725,157	$	(1,565,704	)	$	(3,437	)	$	1,158,828

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

STANDARDAERO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)


	Six Months Ended June 30,
	2025			2024
Operating activities
Net income	$	130,656		$	8,591
Adjustments to reconcile net loss from operations to net cash provided by operating activities:
Depreciation and amortization		97,223			92,876
Amortization of deferred finance charges and discounts		3,288			6,745
Amortization of loss on derivative instruments		—			(303	)
Amortization of interest cap premiums		5,467			4,652
Payment of interest rate cap premiums		(5,524	)		(4,534	)
Stock compensation expense		5,875			—
Loss on debt extinguishment		—			3,577
Loss (gain) from disposals, net		3,449			(132	)
Non-cash lease expense		866			468
Deferred income taxes		(11,560	)		(6,858	)
Foreign exchange loss (gain)		431			(170	)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net		(96,589	)		(16,955	)
Contract assets, net		(155,634	)		(6,296	)
Inventories, net		(4,579	)		(9,445	)
Prepaid expenses and other current assets		(24,422	)		(7,096	)
Accounts payable, accrued expenses and other current liabilities		25,885			9,886
Contract liabilities		20,204			(78,919	)
Due to/from related parties		(649	)		1,225
Income taxes payable and receivable		(15,490	)		(15,466	)
Net cash used in operating activities		(21,103	)		(18,154	)
Investing activities
Acquisitions, net of cash and other		1,254			—
Purchase of property, plant and equipment		(47,262	)		(45,101	)
Payments for purchase of intangible assets		(30,000	)		(214	)
Proceeds from disposal of property, plant and equipment		3,637			539
Net cash used in investing activities		(72,371	)		(44,776	)
Financing activities
Proceeds from long-term debt		345,000			435,969
Repayment of long-term debt		(261,785	)		(368,380	)
Payment of deferred financing charges		—			(392	)
Repayments of long-term agreements		(1,501	)		(1,285	)
Net cash provided by financing activities		81,714			65,912
Effect of exchange rate changes on cash		692			(690	)
Net (decrease) increase in cash		(11,068	)		2,292
Cash at beginning of the period		102,581			57,982
Cash at end of the period	$	91,513		$	60,274
Supplemental cash flow information:
Supplemental disclosure of non-cash investing activities:
Acquisition of property, plant and equipment, liability incurred, but not paid	$	839		$	993
Acquisition of intangible assets, liability incurred but not paid		—			261

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

STANDARDAERO, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Business

StandardAero, Inc. (the “Company”) was incorporated on September 5, 2018, in the state of Delaware and is an independent provider of aftermarket services for fixed and rotary wing aircraft gas turbine engines and auxiliary power units (“APUs”) to the commercial, business and military aircraft markets. The Company also provides aftermarket and upgrade services for business aviation and helicopter airframes and avionics, providing customers within those markets with comprehensive value-added solutions.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of StandardAero, Inc. (formerly Dynasty Parent Co., Inc.) and its subsidiaries.

Authorized Shares

On September 20, 2024, the Company amended its certificate of incorporation to increase the number of authorized voting common stock from 5,000,000 to 3,500,000,000 and authorized non-voting common stock from 100,000 to 70,000,000. Accordingly, the authorized share amounts disclosed in the consolidated balance sheets have been adjusted to retroactively reflect this change.

Corporate Restructuring and Restructuring Transactions

In connection with and prior to the completion of the Company’s initial public offering (the “IPO”) of its shares of common stock, $0.01 par value per share (“Common Stock”), the Company effected certain restructuring transactions. These restructuring transactions consisted of (i) the 103-for-one forward stock split of the Company’s Common Stock effected on September 20, 2024, (ii) the distribution to former holders of Class A-1 Units and Class A-2 Units of Dynasty Parent Holdings, L.P. an aggregate of 275,053,375 shares of the Company’s Common Stock (of which 8,157 were restricted shares), and to holders of Class B Units of Dynasty Parent Holdings, L.P. an aggregate of 6,158,255 shares of the Company’s Common Stock (of which 6,028,394 were restricted shares) and (iii) the liquidation and dissolution of Dynasty Parent Holdings, L.P. (collectively, the “Restructuring Transactions”). Immediately following these Restructuring Transactions, 281,211,630 shares of our Common Stock were issued and outstanding.

Initial Public Offering

On October 2, 2024, the Company completed the IPO at a price to the public of $24.00 per share. The offering included 69,000,000 shares of Common Stock, of which, the Company issued and sold 53,250,000 shares and the selling stockholders sold 15,750,000 shares, including 9,000,000 shares issued pursuant to the full exercise of the underwriters' option to purchase additional shares from the selling stockholders. The shares of Common Stock sold in the IPO were registered under the Securities Act pursuant to a Registration Statement on Form S-1, which was declared effective by the SEC on October 1, 2024. The IPO generated net proceeds from the primary issuance of shares of $1,202.8 million after deducting underwriting discounts and commissions of approximately $67.1 million and estimated offering expenses of $8.1 million.

March Secondary Offering

In March 2025, two of the Company’s stockholders (the “Selling Stockholders”), affiliates of The Carlyle Group Inc. (“Carlyle”) and GIC Private Limited (“GIC”), completed a public offering of an aggregate of 36,000,000 shares of Common Stock at a price to the public of $28.00 per share. The Selling Stockholders received all of the net proceeds from this offering. No shares were sold by the Company.

May Secondary Offering

In May 2025, the Selling Stockholders completed a public offering of an aggregate of 34,500,000 shares of Common Stock (including the full exercise by the underwriters of their option to purchase up to an additional 4,500,000 shares) at a price to the public of $28.00 per share. The Selling Stockholders received all of the net proceeds from this offering. No shares were sold by the Company. As of June 30, 2025 Carlyle and GIC own approximately 45.6% and 10.3% of the Company’s outstanding Common Stock, respectively.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

New Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, “Income Statement (Topic 220): Disaggregation of Income Statement Expenses” which requires additional disclosures of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impacts of adopting this guidance on its consolidated financial statement disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures primarily related to the tax rate reconciliation and income taxes paid information. For public companies the amendments in this ASU are effective for annual periods beginning after December 15, 2024 and for all other entities the amendments are effective for annual periods beginning after December 15, 2025. The amendments should be applied on a prospective basis. Early adoption and retrospective application are permitted. The Company is currently evaluating the impacts of adopting this guidance on its financial statement disclosures.

Other new pronouncements issued, but not effective until after June 30, 2025, are not expected to have a significant impact on the Company’s results of operations, financial condition, or liquidity.

NOTE 3: REVENUE RECOGNITION

Disaggregated revenue

The following table summarizes total revenue by the Company’s segments:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Revenue:
Engine Services	$	1,350,677	$	1,211,461	$	2,618,990	$	2,308,853
Component Repair Services		178,266		135,737		345,541		274,068
Total revenue	$	1,528,943	$	1,347,198	$	2,964,531	$	2,582,921

The following table presents revenues from customers that contributed to more than 10% of revenues:


	Three months ended June 30,						Six months ended June 30,
	2025			2024			2025			2024
Customer A		15.8	%		22.2	%		15.9	%		22.5	%

The following table presents revenues from external customers by end market:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Commercial Aerospace	$	901,912	$	793,556	$	1,754,948	$	1,516,071
Military & Helicopter		280,296		250,849		529,823		477,952
Business Aviation		299,685		275,285		582,978		526,213
Other		47,050		27,508		96,782		62,685
	$	1,528,943	$	1,347,198	$	2,964,531	$	2,582,921

Contract assets and liabilities

Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing or reimbursable costs related to a specific contract. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the Company’s contracts. The following table provides information about contract assets and contract liabilities from contracts with customers:


	June 30, 2025			December 31, 2024
	(in thousands)
Contract assets	$	1,071,353		$	915,940
Less: allowance for credit loss		(519	)		(740	)
Contract assets, net	$	1,070,834		$	915,200
Contract liabilities	$	420,229		$	400,025

Changes in contract assets and contract liabilities primarily result from the timing difference between the Company’s performance of services and payments from customers. The Company recognized revenue that was included in the beginning of period contract liability balance of approximately $407.3 million and $400.0 million for the three and six months ended June 30, 2025, respectively, and $251.0 million and $355.7 million for the three and six months ended June 30, 2024, respectively.

Remaining performance obligations

As of June 30, 2025, the Company had approximately $366.8 million of remaining performance obligations, which primarily relate to the Company’s engine utilization contracts that are satisfied over multiple years. Of this amount, the Company expects approximately 30% to be satisfied over the next two years and the remainder thereafter. The expected timing of the satisfaction of performance obligations is dependent on the timing of the customer’s maintenance requirements and as such, the timing of the revenue recognition is subject to estimation uncertainty. The Company excludes from its remaining performance obligation balance the value of remaining performance obligations for its fixed price and time & material contracts, as the performance obligations for these contracts generally have an original expected duration of one year or less.

NOTE 4: EARNINGS PER SHARE

As a result of the 103-for-one stock split and the Restructuring Transactions, the 281,211,630 shares of the Company’s Common Stock held were distributed to former holders of Class A-1 Units and Class A-2 Units of Dynasty Parent Holdings, L.P. in an aggregate of 275,053,375 shares of Common Stock (of which 8,157 were restricted shares), and also to holders of Class B Units of Dynasty Parent Holdings, L.P. in an aggregate of 6,158,255 shares of Common Stock (of which 6,028,394 were restricted shares). For purposes of the computation of earnings (loss) per share this distribution represented a net 100.79-for-one stock split of the Company’s Common Stock which is retroactively adjusted for all periods presented.

The following table summarizes the computation of basic and diluted net income per share attributable to the stockholders:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
	(in thousands, except per share amounts)
Numerator for earnings per share:
Net income	$	67,713	$	5,404	$	130,656	$	8,591

Denominator for earnings per share:
Weighted average common shares - basic		328,445		275,175		328,442		275,175
Dilutive effect of stock options and restricted stock awards		5,855		—		5,785		—
Weighted average shares - diluted		334,300		275,175		334,227		275,175

Earnings per share:
Basic earnings per share	$	0.21	$	0.02	$	0.40	$	0.03
Diluted earnings per share	$	0.20	$	0.02	$	0.39	$	0.03

The Company has 5,950,306 contingently issuable shares of Common Stock that are issuable upon the Company’s completion of a liquidity event, which has not occurred as of June 30, 2025. These shares are excluded from weighted average common shares - basic, but included in the calculation of the dilutive effect of stock options and restricted stock awards. Anti-dilutive shares of 0.6 million and 0.5 million for the three and six months ended June 30, 2025 respectively, were excluded from the calculation of the dilutive effect of

stock options and restricted stock awards. See the Company’s 2024 Form 10-K, Note 19, Stock Based Compensation for further information.

NOTE 5: ACQUISITIONS

Aero Turbine, Inc.

On August 23, 2024, the Company acquired 100% of the shares of Aero Turbine, Inc. (“Aero Turbine”) for a purchase price of approximately $130.7 million subject to post-closing adjustments, comprised of an initial cash purchase price of $116.8 million and $15.2 million representing the estimated fair value of additional consideration contingently payable based upon the achievement of gross profit in excess of certain gross profit targets for the period from January 1, 2024, to December 31, 2026. During the three months ended June 30, 2025, the Company received an additional cash payment of $1.3 million related to a post-closing purchase price adjustment related to working capital. The Company recorded this measurement period adjustment as a $1.3 million decrease to goodwill, resulting in a corresponding $1.3 million decrease of the initial purchase price of $132.0 million. The maximum contingent consideration payable from the Company to the seller is $21.0 million. The current portion of the contingent consideration liability is recorded in Accrued and other current liabilities and the non-current portion is recorded in Other non-current liabilities. Aero Turbine is a provider of engine component repair, overhaul services and other engineering services for U.S. and foreign military customers.

The results of operations of Aero Turbine have been included in the consolidated financial statements of the Company from August 23, 2024, the closing date of the acquisition. Aero Turbine is reported within the Component Repair Services segment.

The Company has provisionally allocated the purchase price based on the fair values of the assets acquired and liabilities assumed at the Aero Turbine acquisition date as follows:


	Amounts acquired on August 23, 2024 (as adjusted)
	(in thousands)
Cash	$	2,765
Accounts receivable		4,066
Contract assets		12,419
Inventories		10,213
Prepaid expenses and other current assets		2,518
Property, plant and equipment		5,868
Operating lease right of use asset		999
Customer relationships		75,000
Goodwill		51,755
Total assets acquired		165,603
Accounts payable		5,353
Accrued and other current liabilities		7,131
Contract liabilities		1,205
Current portion operating lease liabilities		111
Income taxes payable		4,901
Long-term portion operating lease liabilities		899
Deferred income tax liabilities		15,269
Total liabilities assumed		34,869
Net assets acquired		130,734
Cash acquired		2,765
Purchase price, net of cash acquired	$	127,969

The fair values presented were estimated by management. During the three months ended March 31, 2025, the Company recorded measurement period adjustments related to estimate refinement of a $0.8 million decrease in accrued and other current liabilities, resulting in a corresponding decrease in goodwill. During the three months ended June 30, 2025, the Company recorded measurement period adjustments related to post-closing working capital adjustment of a $1.3 million decrease in purchase price and estimate refinement of a $0.4 million increase in deferred income tax liabilities, resulting in a $0.9 million decrease in goodwill. The fair value of the assets acquired includes accounts receivable of $4.1 million, of which all is expected to be collectible. The excess of the cost of acquisition over the fair value of the net tangible assets acquired of $126.8 million has been allocated as $75.0 million of customer relationships and $51.8 million of goodwill. The goodwill recognized is attributable to Aero Turbine’s workforce, market position, quality, customized repairs and reliable turnaround times. Goodwill will not be amortized but will be reviewed annually for impairment.

None of the goodwill is expected to be deductible for income tax purposes. Customer relationships are expected to be amortized over 15 years. The consideration paid and final valuation and related allocation of the purchase price is subject to change as additional information is received and will be completed no later than 12 months after the closing date.

Acquisition related costs of $1.4 million were incurred for the year ended December 31, 2024. These costs are reported in the Consolidated Statements of Operations as “Acquisition costs”. Such expenses include professional fees and other third-party costs.

NOTE 6: INVENTORIES

Inventories consist of the following:


	June 30, 2025		December 31, 2024
	(in thousands)
Raw materials	$	725,146	$	662,887
Finished goods		3,797		2,529
Work in process		122,654		181,602
Total inventory	$	851,597	$	847,018

Inventory balances were net of reserves for slow moving, excess or obsolete engine and aircraft parts inventory of $109.2 million and $110.2 million as of June 30, 2025 and December 31, 2024, respectively.

NOTE 7: GOODWILL

The changes in the carrying amount of goodwill for the periods ended June 30, 2025 and 2024, are as follows:


	Segment
	Engine Services		Component Repair Services			Total
	(in thousands)
Balance, December 31, 2024	$	1,224,707	$	461,263		$	1,685,970
Purchase price adjustments		—		(1,683	)		(1,683	)
Balance, June 30, 2025	$	1,224,707	$	459,580		$	1,684,287


	Segment
	Engine Services		Component Repair Services		Total
	(in thousands)
Balance, December 31, 2023	$	1,224,707	$	407,789	$	1,632,496
Goodwill acquired		—		—		—
Goodwill, June 30, 2024	$	1,224,707	$	407,789	$	1,632,496

Goodwill Impairment Testing

The Company reviews goodwill at least annually for potential impairment, as of October 1, and more frequently, if events or changes in circumstances suggest that an impairment may exist. The Company performed its annual goodwill impairment testing as of October 1, 2024, and determined that no adjustments to the carrying value of goodwill were necessary as it was more likely than not that the fair values of the Company’s reporting units are above their carrying values and that no impairment had occurred. The Company has assessed the changes in events and circumstances through the quarter ended June 30, 2025, and have concluded that no triggering events has occurred that would require interim testing.

NOTE 8: LONG-TERM DEBT

Long-term debt consists of the following:


	As of June 30,			As of December 31,
	2025			2024
	(in thousands)
New 2024 Term Loan Facilities	$	2,238,750		$	2,250,000
New 2024 Revolving Credit Facility		95,000			—
Finance leases		19,050			18,375
Other		1,177			1,230
		2,353,977			2,269,605
Less: Current portion		(23,461	)		(23,449	)
Unamortized discounts		(20,813	)		(22,456	)
Unamortized deferred finance charges		(14,572	)		(15,723	)
Long-term debt	$	2,295,131		$	2,207,977

New Credit Agreement

On October 31, 2024, the Company entered into the New Credit Agreement providing for the New 2024 Term Loan Facilities due October 31, 2031, in an aggregate principal amount of $2,250.0 million, and the New 2024 Revolving Credit Facility due October 31, 2029, in an aggregate principal amount of up to $750.0 million. Concurrent with the closing of the New Credit Agreement, the Company used the proceeds of the New 2024 Term Loan Facilities and approximately $95.0 million of the proceeds of the New 2024 Revolving Credit Facility to repay in full amounts outstanding under (i) the Prior Credit Agreement and (ii) the Prior ABL Credit Agreement, terminating each of the debt facilities thereunder. The Company expensed $23.7 million related to new third party fees that did not meet the criteria for deferral as refinancing costs on the Consolidated Income Statement during the year ended December 31, 2024, of which $5.7 million related to the New Credit Agreement, $11.6 million related to the New 2024 Term Loan Facilities, $1.5 million related to the September 6, 2024 amendment to the Prior Credit Agreement and $4.9 million related to the March 25, 2024 Prior Credit Agreement.

New 2024 Term Loan Facilities

The New Credit Agreement provided for (i) a senior secured dollar term loan B facility, incurred by the U.S. Borrower in an aggregate principal amount of $1,630.0 million (the “New 2024 Term Loan B-1 Facility”), (ii) a senior secured dollar term loan B facility incurred by the Canadian Borrower in an aggregate principal amount of $620.0 million (the “New 2024 Term Loan B-2 Facility” and, together with the New 2024 Term Loan B-1 Facility, the “New 2024 Term Loan Facilities”). The New 2024 Term Loan Facilities were fully drawn on October 31, 2024, in an aggregate principal amount of $2,250.0 million, bearing interest at a Secured Overnight Financing Rate (“SOFR”) + 2.25% with provision for a rate step-down to 2.00% based on achieving a consolidated First Lien Net Leverage Ratio (as defined in the New Credit Agreement) of less than 3.00x, and will mature on October 31, 2031. The Company incurred new third party fees of $13.2 million related to the New 2024 Term Loan Facilities of which $11.6 million were expensed as refinancing costs on the Consolidated Income Statement during the year ended December 31, 2024, and $1.6 million of deferred finance charges were recorded as a reduction of long-term debt on the Consolidated Balance Sheets as of December 31, 2024 and will be amortized on a straight-line basis over the term of the credit facility. As of June 30, 2025, the effective interest rate on the New 2024 Term Loan Facilities was SOFR + 2.00%.

New 2024 Revolving Credit Facility

The New Credit Agreement provided for a senior secured multicurrency revolving credit facility available to the Company in an aggregate principal amount of up to $750.0 million (of which up to $150.0 million is available for the issuance of letters of credit) (the “New 2024 Revolving Credit Facility” and, together with the New 2024 Term Loan Facilities, the “New Senior Secured Credit Facilities”). The New 2024 Term Loan Facilities will mature on October 31, 2031, and the New 2024 Revolving Credit Facility will mature on October 31, 2029. As of December 31, 2024, the New 2024 Revolving Credit Facility had no outstanding borrowings. Borrowings bear interest at SOFR + 2.00% with provision for step-down to 1.75% and 1.5% based on a achieving a consolidated First Lien Net Leverage Ratio of less than 3.25x and 2.75x, respectively. As of June 30, 2025, the Company had $639.0 million of available borrowing capacity under the New 2024 Revolving Credit Facility. The Company incurred new lender fees of $3.8 million related to the New 2024 Revolving Credit Facility, which are recorded as an other long-term asset on the Consolidated Balance Sheets as of December 31, 2024, and will be amortized on a straight-line basis over the term of the facility. As of June 30, 2025, the effective interest rate on the New 2024 Revolving Credit Facility was SOFR + 1.75%.

Prior Credit Agreement

On October 31, 2024, concurrent with the closing of the New Credit Agreement, the Company used the proceeds of the New 2024 Term Loan Facilities and the New 2024 Revolving Credit Facility to repay in full amounts outstanding under the Prior Credit Agreement terminating each of the debt facilities thereunder, which resulted in a loss on extinguishment of debt of $4.7 million recognized in the year ended December 31, 2024, $0.7 million related to the March 25, 2024 amendment of the Prior Credit Agreement, $3.6 million upon the commencement of the New Credit Agreement on October 31, 2024 representing the write off unamortized discounts and deferred financing charges related to the extinguished portions of the Prior Term Loan facilities and $0.4 million related to the extinguishment of the Prior 2023 Revolving Credit Facility.

Prior 2023 and Prior 2024 Term Loan Facilities

On August 24, 2023, the Company amended the Prior Credit Agreement to combine the 2019 Term Loan Facilities and the 2021 Term Loan Facility into the Prior 2023 Term Loan Facilities in the amount of $2,575.0 million less a 1.0% discount. The Prior 2023 Term Loan Facilities were comprised of two tranches, referred to as the Prior 2023 Term Loan B-1 Facility and the Prior Term Loan B-2 Facility, with identical terms that were entered into by subsidiaries of the Company. The Prior 2023 Term Loan Facilities incurred interest at the Term SOFR Rate plus 3.75% to 4.00% or the Base Prime Rate plus 2.75% to 3.00% and were scheduled to mature on August 24, 2028. As a result of the amendment, both a debt modification and a debt extinguishment arose. The Company recognized $0.8 million in deferred charges related to the Prior 2023 Term Loan Facilities which are recorded as a reduction of long-term debt on the Consolidated Balance Sheets. The Company also recognized a loss on the extinguishment of debt of $6.2 million, representing the write-off of the unamortized deferred finance charges and original issue discount related to the extinguished portion of the 2019 Term Loan Facilities and 2021 Term Loan Facility, while $22.8 million of the unamortized deferred finance charges and original issue discount relating to the modified debt continued to be deferred. In addition, $19.9 million in third party fees related to the modified portion of the 2019 Term Loan Facilities were expensed as refinancing costs on the Consolidated Income Statement during the year ended December 31, 2023, as these costs did not meet the criteria for deferral.

On March 25, 2024, the Company amended its Prior Credit Agreement, dated as of April 4, 2019 (as amended, restated, modified and/or supplemented from time to time, the “Credit Agreement”), among Dynasty Acquisition Co., Inc. as the U.S. borrower (the “U.S. Borrower”), Standard Aero Limited, as the Canadian borrower (the “Canadian Borrower”), Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and certain other parties thereto, to refinance the $2,562.1 million existing senior secured term loans then-outstanding thereunder (the “Prior 2023 Term Loans”) and provide the Company with an incremental $200.0 million as additional term loans (together with the refinanced 2023 Term Loans, the “Prior 2024 Term Loans” and the facilities in respect thereof, the “Prior 2024 Term Loan Facilities”). In addition, the amendment reduced the applicable interest rate to the Term SOFR Rate plus 3.25% to 3.50% or the Base Prime Rate plus 2.25% to 2.50%. All other terms of the Credit Agreement remained unchanged. The incremental proceeds from the Prior 2024 Term Loans were used toward the partial redemption of the Prior Senior Notes. As a result of the amendment, the Company recognized a loss on the extinguishment of debt of $0.7 million in the year ended December 31, 2024, representing the write-off of the unamortized deferred finance charges related to the extinguished portion of the Prior 2023 Term Loans. In addition, $4.9 million in third party fees related to the modified portion of the Term Loans were expensed as refinancing costs on the Consolidated Income Statement during the year ended December 31, 2024, as these costs did not meet the criteria for deferral. The Company recognized $0.1 million in deferred charges which are recorded as a reduction of long-term debt on the Consolidated Balance Sheets. The original issue discount and deferred charges were amortized over the term of the Credit Agreement using the straight-line method, which approximates the effective interest rate method.

On September 6, 2024, the Company amended the Prior Credit Agreement to incur additional 2024 Term Loans in a principal amount of $200.0 million which were, in part, used to paydown a portion of the advances under the Company’s Prior ABL Credit Facility used to fund the acquisition of Aero Turbine. There were no other substantive changes made to the Prior Credit Agreement. As a result of the amendment, $1.5 million in third party fees related to the modified portion of the Term Loans were expensed as refinancing costs on the Consolidated Income Statement during the year ended December 31, 2024, as these costs did not meet the criteria for deferral. The original issue discount and deferred charges were amortized over the term of the Prior Credit Agreement using the straight-line method, which approximates the effective interest rate method.

On October 31, 2024 concurrent with the New Credit Agreement, the Company recognized a $3.6 million loss on extinguishment of debt representing the write off unamortized discounts and deferred financing charges related to the extinguished portions of the Prior Term Loan facilities

Prior 2023 Revolving Credit Facility

The Prior 2023 Revolving Credit Facility was a senior secured multicurrency cash flow revolving credit facility available under the Prior Credit Agreement, with a capacity of $150.0 million (of which up to $75.0 million was available for the issuance of letters of

credit) and was scheduled to mature on May 1, 2028. The Prior 2023 Revolving Credit Facility bore interest at the Adjusted Term SOFR rate plus 3.125% to 3.50%. The applicable rates on borrowing under the credit agreement were based on the Consolidated First Lien Net Leverage Ratio. The 2023 Revolving Credit Facility was subject to a maximum Consolidated First Lien Net Leverage Ratio that was tested at the end of any fiscal quarter if the total revolving credit loans outstanding under the Prior 2023 Revolving Credit Facility on such date exceed 35.0% of the aggregate amount of all commitments in respect of the Prior 2023 Revolving Credit Facility.

On October 31, 2024, concurrent with the closing of the New Credit Agreement, the Company terminated the Prior 2023 Revolving Credit Facility which had no outstanding loans under it, resulting in a loss on extinguishment of debt of $0.4 million recognized in the year ended December 31, 2024.

Prior ABL Credit Facility

The Prior ABL Credit Facility had a capacity of $400.0 million, was repayable in U.S. dollars and was scheduled to mature on May 1, 2028. At the Company’s discretion, the borrowings under the ABL Credit Facility bore interest at the Adjusted Term SOFR rate plus 1.50% to 2.00%, Prime Lending Rate plus 0.50% to 1.00%, or the Base Rate on Canadian borrowings plus 0.50% to 1.00%, with the spread dependent on the amount of the borrowing and was subject to certain financial covenants. The ABL Credit Facility had an annual commitment fee of 0.250% to 0.375% based on excess availability. The ABL Credit Facility contained financial covenants which were required to be calculated immediately prior to or during the continuance of a trigger period. The trigger period was a period where borrowing availability was less than the greater of 10% of the line cap and $30.0 million.

Prior Senior Notes

The Prior Senior Notes bore an interest rate of 10.0% and were scheduled to mature on April 4, 2027. On March 25, 2024, the Company partially redeemed $200.0 million of the Prior Senior Notes. As a result of the redemption, the Company recognized a loss on extinguishment of debt of $2.9 million in the year ended December 31, 2024, representing the write-off of the unamortized deferred finance charges related to the redeemed portion of the Prior Senior Notes. On October 3, 2024, the Company used the proceeds from the initial public offering to repay the full outstanding principal and accrued interest on the Prior Senior Notes, totaling $487.5 million. The extinguishment of the Prior Senior Notes resulted in a loss on extinguishment of debt of $5.7 million recognized in the year ended December 31, 2024.

The Company’s weighted average interest rate of borrowings under its senior credit agreements was 6.3% and 6.4% for the three and six months ended June 30, 2025, respectively, and 9.0% and 9.2% for the three and six months ended June 30, 2024, respectively.

Certain of these agreements contain non-financial covenants that limit both the Company’s ability to raise additional financings in the future and the Company’s ability to pay dividends subject to select amounts and incurrence ratios.

As of June 30, 2025, the amounts of the long-term debt payable for the years ending on December 31 are as follows:


	Finance Leases			Debt			Total
	(in thousands)
2025 (excluding the six months ended June 30, 2025)	$	835		$	11,250		$	12,085
2026		1,670			23,677			25,347
2027		1,665			22,500			24,165
2028		1,655			22,500			24,155
2029		1,655			117,500			119,155
Thereafter		21,906			2,137,500			2,159,406
Total	$	29,386		$	2,334,927		$	2,364,313
Amount representing interest		(10,336	)		—			(10,336	)
Unamortized discounts		—			(20,813	)		(20,813	)
Unamortized deferred finance charges		—			(14,572	)		(14,572	)
Total long-term debt payable	$	19,050		$	2,299,542		$	2,318,592

NOTE 9: LEASES

Lease costs consist of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Finance lease expense
Amortization	$	254	$	347	$	598	$	692
Interest expense		237		227		496		483
Operating lease expense		8,746		7,238		16,431		14,443
Short term lease expense		366		296		818		660
	$	9,603	$	8,108	$	18,343	$	16,278

The impact of leasing on the Consolidated Balance Sheets consists of the following:


	Classification on the
	Consolidated Balance Sheets	June 30, 2025		December 31, 2024
		(in thousands)
Assets
Finance lease assets	Property, plant and equipment, net	$	19,572	$	20,262
Operating lease assets	Operating lease right of use asset, net		217,660		172,206
Total lease assets		$	237,232	$	192,468
Current liabilities
Finance lease liabilities	Current portion of long-term debt	$	792	$	835
Operating lease liabilities	Operating lease liabilities		19,777		17,663
Non-current liabilities
Finance lease liabilities	Long-term debt		18,258		17,540
Operating lease liabilities	Long-term operating lease liabilities		208,395		164,224
Total lease liabilities		$	247,222	$	200,262

Supplemental cash flow information related to leases consisted of the following:


	Six Months Ended June 30,
	2025		2024
	(in thousands)
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	15,849	$	7,026
Operating cash flows from finance leases		496		227
Financing cash flows from finance leases		421		206
Right of use assets obtained in exchange for lease liabilities:
Operating lease right of use asset		58,070		6,880

Future minimum operating lease payments consist of the following for the twelve months ending December 31:


	Operating Leases
	(in thousands)
2025 (excluding the six months ended June 30, 2025)	$	17,258
2026		31,012
2027		29,270
2028		28,858
2029		26,286
Thereafter		236,844
Total future minimum payments		369,528
Less imputed interest

StandardAero, Inc. 10-Q