What changed in this filing

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Item 1. Financial Statements

2025-07-31 compared with 2025-05-05 · 358 added, 221 removed, 673 unchanged (46% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share and per share data)

Notes March 31, 2025 December 31, 2024

Notes June 30, 2025 December 31, 2024

Current Assets

16 unchanged sentences

Accounts payable $ 83,391 $ 69,119

Liabilities held for sale 76,496 —

Accrued liabilities 131,166 96,910

1 unchanged sentence

Current security deposits 17,231 18,100

Liabilities held for sale 30,883 —

Other current liabilities 43,622 100,565

8 unchanged sentences

2,000,000,000 shares authorized;

102,555,975 and 102,550,975 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)

102,560,867 and 102,550,975 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively)

$ 1,026 $ 1,026

1 unchanged sentence

200,000,000 shares authorized;

6,800,000 and 11,740,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)

6,800,000 and 11,740,000 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively)

Additional paid in capital ( 30,831 ) 153,328

3 unchanged sentences

______________________________________________________

(1) Includes accounts receivable from the 2025 Partnership of $ 69,140 and $ 0 as of March 31, 2025 and December 31, 2024, respectively.

(2) Includes receivables from the 2025 Partnership of $ 34,110 and $ 0 as of March 31, 2025 and December 31, 2024, respectively.

(1) Includes accounts receivable from the 2025 Partnership of $ 93,576 and $ 0 as of June 30, 2025 and December 31, 2024, respectively.

(2) Includes receivables from the 2025 Partnership of $ 18,141 and $ 0 as of June 30, 2025 and December 31, 2024, respectively.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Notes 2025 2024 2025 2024

Aerospace products revenue $ 420,686 $ 245,200 $ 685,111 $ 434,257

$ 365,063 $ 189,057

MRE Contract revenue 69,585 — 170,223 —

Lease income 62,439 70,754 130,879 123,915

1 unchanged sentence

Asset sales revenue 47,915 72,433 66,854 111,040

Other revenue (1)

2,508 4,020 2,539 4,099

Total revenues 12 676,237 443,594 1,178,317 770,288

4 unchanged sentences

Management fees and incentive allocation to affiliate 11 — 3,554 — 8,449

Internalization fee to affiliate 15 — 300,000 — 300,000

Depreciation and amortization 4, 6 55,236 56,691 114,798 106,611

3 unchanged sentences

Interest expense ( 63,965 ) ( 55,196 ) ( 126,005 ) ( 102,903 )

Loss on extinguishment of debt — ( 13,920 ) — ( 13,920 )

Equity in losses of unconsolidated entities (2)

5 ( 5,003 ) ( 694 ) ( 12,617 ) ( 1,361 )

Other income (3)

Gain on sale to the 2025 Partnership 34,604 — 45,474 —

Other income (expense) 27,156 ( 498 ) 60,227 136

Total other expense ( 7,208 ) ( 70,308 ) ( 32,921 ) ( 118,048 )

Income before income taxes 125,245 45,194

Provision for income taxes 10 22,859 5,572

Net income 102,386 39,622

Income (loss) before income taxes 203,276 ( 232,903 ) 328,521 ( 187,709 )

Provision for (benefit from) income taxes 10 37,878 ( 13,033 ) 60,737 ( 7,461 )

Net income (loss) 165,398 ( 219,870 ) 267,784 ( 180,248 )

Dividends on preferred shares 3,709 8,335 9,824 16,670

Loss on redemption of preferred shares — — 6,327 —

Net income attributable to shareholders $ 89,944 $ 31,287

Earnings per share:

Net income (loss) attributable to shareholders $ 161,689 $ ( 228,205 ) $ 251,633 $ ( 196,918 )

Earnings (loss) per share:

Basic $ 1.58 $ ( 2.26 ) $ 2.45 $ ( 1.96 )

4 unchanged sentences

______________________________________________________

(1) Includes revenue of $ 100,638 and $ 0 for the three months ended March 31, 2025 and 2024, respectively, for sales to the 2025 Partnership.

See Note 11 for additional information.

(2) Includes the profit elimination of $( 6,950 ) and $ 0 for the three months ended March 31, 2025 and 2024, respectively, for sales to the 2025 Partnership.

(3) Includes gain on sale of $ 10,870 and $ 0 for the three months ended March 31, 2025 and 2024, respectively, for sales to the 2025 Partnership.

(1) Includes servicing fees of $ 2,052 and $ 2,600 for the three and six months ended June 30, 2025, respectively, from the 2025 Partnership.

(2) Includes the profit elimination of $( 4,935 ) and $( 11,885 ) for the three and six months ended June 30, 2025, respectively, and $ 0 and $ 0 for the three and six months ended June 30, 2024, respectively, for sales to the 2025 Partnership.

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2025

Three and Six Months Ended June 30, 2025

Ordinary Shares Preferred Shares Additional Paid In Capital (Accumulated Deficit) Retained Earnings Total Equity

9 unchanged sentences

Equity - March 31, 2025 $ 1,026 $ 68 $ ( 2,044 ) $ 29,283 $ 28,333

Three Months Ended March 31, 2024

Net income 165,398 165,398

Total comprehensive loss 165,398 165,398

Issuance of ordinary shares 174 174

Dividends declared - ordinary shares ( 30,767 ) ( 30,767 )

Dividends declared - preferred shares ( 3,709 ) ( 3,709 )

Equity-based compensation 5,515 5,515

Equity - June 30, 2025 $ 1,026 $ 68 $ ( 30,831 ) $ 194,681 $ 164,944

See accompanying notes to consolidated financial statements.

FTAI AVIATION LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

(Dollars in thousands)

Three and Six Months Ended June 30, 2024

Ordinary Shares Preferred Shares Additional Paid In Capital Accumulated Deficit Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity

6 unchanged sentences

Equity - March 31, 2024 $ 1,002 $ 159 $ 218,074 $ ( 42,163 ) $ 534 $ 177,606

Net income ( 219,870 ) ( 219,870 )

Total comprehensive income ( 219,870 ) ( 219,870 )

Purchase of non-controlling interest ( 534 ) ( 534 )

Issuance of ordinary shares 20 150,116 150,136

Dividends declared - ordinary shares ( 30,074 ) ( 30,074 )

Dividends declared - preferred shares ( 8,335 ) ( 8,335 )

Equity-based compensation 638 638

Equity - June 30, 2024 $ 1,022 $ 159 $ 330,419 $ ( 262,033 ) $ — $ 69,567

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income $ 102,386 $ 39,622

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Net income (loss) $ 267,784 $ ( 180,248 )

Adjustments to reconcile net income to net cash used in operating activities:

Equity in losses of unconsolidated entities (1)

Gain on sale of assets ( 226,116 ) ( 146,084 )

( 19,419 ) ( 58,061 )

Gain on sale of assets to the 2025 Partnership ( 45,474 ) —

Gain on insurance recoveries ( 54,325 ) —

Security deposits and maintenance claims included in earnings ( 31,167 ) ( 5,298 )

Loss on extinguishment of debt — 13,920

Equity-based compensation 10,404 1,148

Non-cash termination fee to affiliate — 150,000

Depreciation and amortization 114,798 106,611

4 unchanged sentences

Amortization of deferred financing costs 5,749 5,107

Bad debt expense 150 —

Other 275 ( 37 )

11 unchanged sentences

Acquisition of leasing equipment ( 412,136 ) ( 436,180 )

Investment in financing receivables ( 2,764 ) —

Investments in financing receivables ( 2,764 ) ( 19,750 )

Acquisition of property, plant and equipment ( 11,085 ) ( 2,471 )

3 unchanged sentences

Proceeds from sale of assets 589,337 333,660

232,946 128,384

Proceeds from sale of assets to the 2025 Partnership 397,148 —

Proceeds from settlement of insurance claims 54,325 —

1 unchanged sentence

Return of deposits for acquisition of leasing equipment (2)

Net cash used in investing activities $ ( 27,627 ) $ ( 169,213 )

Net cash provided by (used in) investing activities $ 496,148 $ ( 219,383 )

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

6 unchanged sentences

Release of maintenance deposits under operating lease agreements ( 5,361 ) ( 3,938 )

Capital contributions from non-controlling interests — ( 534 )

Redemption of preferred shares ( 124,167 ) —

1 unchanged sentence

Cash dividends - preferred shares ( 9,824 ) ( 16,669 )

Net cash provided by financing activities $ 50,610 $ 144,026

Net decrease in cash and cash equivalents and restricted cash ( 2,983 ) ( 25,532 )

Net cash (used in) provided by financing activities $ ( 173,069 ) $ 485,748

Net increase in cash and cash equivalents and restricted cash 186,795 78,729

Cash and cash equivalents and restricted cash, beginning of period 115,266 90,906

6 unchanged sentences

Purchase deposits reclassified to leasing equipment from other assets upon acquisition ( 47,017 ) ( 12,108 )

Decrease (increase) in leasing equipment for engines provided to aircraft lessees in lieu of cash reimbursements of maintenance deposits 5,756 ( 1,497 )

Decrease in leasing equipment for engines provided to aircraft lessees in lieu of cash reimbursements of maintenance deposits 3,846 6,794

Accounts receivable settled with security deposits ( 1,715 ) ( 4,077 )

1 unchanged sentence

______________________________________________________

(1) Includes the profit elimination of $( 6,950 ) and $ 0 for the three months ended March 31, 2025 and 2024, respectively, for sales to the 2025 Partnership within the Aerospace Products segment.

(2) Includes gain on sale of $ 10,870 and $ 0 for the three months ended March 31, 2025 and 2024, respectively, for sales to the 2025 Partnership.

(3) Includes deposits for acquisition of leasing equipment paid on behalf of the 2025 Partnership of $ 25,400 and $ 0 for the three months ended March 31, 2025 and 2024, respectively, and return of deposits for the acquisition of leasing equipment reimbursed from the 2025 Partnership of $ 42,813 and $ 0 for the three months ended March 31, 2025 and 2024, respectively.

(4) Includes proceeds from sale of assets of $ 58,892 and $ 0 for the three months ended March 31, 2025 and 2024, respectively, for sales to the 2025 Partnership.

(1) Includes the profit elimination of $( 11,885 ) and $ 0 for the six months ended June 30, 2025 and 2024, respectively, for sales to the 2025 Partnership within the Aerospace Products segment.

(2) Includes deposits for acquisition of leasing equipment paid on behalf of the 2025 Partnership of $ 23,473 and $ 0 for the six months ended June 30, 2025 and 2024, respectively, and return of deposits for the acquisition of leasing equipment reimbursed from the 2025 Partnership of $ 42,813 and $ 0 for the six months ended June 30, 2025 and 2024, respectively.

See accompanying notes to consolidated financial statements.

6 unchanged sentences

Additionally, we repair and sell refurbished engines and aftermarket components of engines as well as develop and manufacture Parts Manufacturer Approval (“PMA”) parts through a joint venture.

Our engine maintenance activities are performed at our owned maintenance facilities in Montréal and Miami which total over 700,000 square feet in size and at locations worldwide through our exclusivity arrangements and partnerships.

Our principal corporate location is in New York City, and we have a global presence through our offices in Cardiff, Dubai, Dublin and Singapore, in addition to Montréal and Miami.

We conduct engine maintenance at our 100% owned facilities in Montréal and Miami, as well as through our 50 % equity ownership in QuickTurn Europe, located in Rome.

Collectively, these facilities span over 900,000 square feet equipped with advanced tooling, engine test cells, and engineering capabilities to support a wide range of component repairs and service requirements.

In addition, we also support global operations through exclusive arrangements and strategic partnerships at key locations worldwide.

Our principal corporate location is in New York City, and we have a global presence through our offices in Cardiff, Dubai, Dublin and Singapore, in addition to Montréal, Miami and Rome.

The majority of our target customers are small and medium sized airlines which have narrowbody fleets powered by CFM56-5B, CFM56-7B and V2500 engines.

14 unchanged sentences

Under the Transition Services Agreement, the Former Manager was required to continue to provide the Company and its affiliates with all of the services provided by the Former Manager to the Company and its affiliates immediately prior to May 28, 2024 (the “Services”) for a transition period until October 31, 2024, during which the Company procured replacements for the Services.

In addition, the Former Manager was required to continue to provide the services that were reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025.

The Services were provided to the Company for a fee equal to the Former Manager’s cost of providing the Services, plus a mark-up of ten percent ( 10 %).

In addition, the Former Manager is required to continue to provide the services that are reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025.

The Transition Services Agreement may be terminated earlier (x) by mutual agreement of the parties, (y) by either the Former Manager or the Company in the event of a material breach by the non-terminating party that is not cured within thirty ( 30 ) days following written notification thereof, or (z) by the Former Manager if the Company fails to pay any undisputed sum overdue and payable for a period of at least thirty ( 30 ) days.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

10 unchanged sentences

We use the equity method of accounting for investments in entities in which we exercise significant influence but which do not meet the requirements for consolidation.

Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities, or under the HLBV method, as applicable.

Under the equity method, we record our proportionate share of the underlying net income (loss) of these entities.

Use of Estimates — The preparation of financial statements in conformity with U.S.

49 unchanged sentences

As part of this transaction, the 2025 Partnership committed to acquire 45 on-lease narrowbody aircraft from us (the “Seed Assets”) and has signed an agreement through which our Maintenance, Repair and Exchange (“MRE”) business will provide replacement aircraft engines and modules for the life of the 2025 Partnership.

Four of the aircraft were sold for a gain of $ 10.9 million, which was recognized within other income during the three months ended March 31, 2025.

During the three and six months ended June 30, 2025, 33 and 37 of the aircraft were sold for a gain of $ 34.6 million and $ 45.5 million, respectively, which was recognized within gain on sale to the 2025 Partnership.

The aircraft sales (and the remaining 8 aircraft to be sold) are accounted for under ASC 610-20, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets , as they are non-recurring in nature and not considered part of the Company’s ordinary activities.

During the three months ended March 31, 2025, the Company received $ 30.1 million in insurance recoveries in connection with the settlement of claims related to the aircraft and engines located in Russia and recorded the gain within other income.

During the three and six months ended June 30, 2025, the Company received $ 24.2 million and $ 54.3 million, respectively, in insurance recoveries in connection with the settlement of claims related to the aircraft and engines located in Russia and recorded the gain within other income.

Concentration of Credit Risk — We are subject to concentrations of credit risk with respect to amounts due from customers and lessees.

We attempt to limit our credit risk by performing ongoing credit evaluations.

We earned 19 % of our revenue from one customer in the Aerospace Products segment during the three months ended March 31, 2025.

No single customer or lessee accounted for greater than 10% of total revenue during the three months ended March 31, 2024

As of March 31, 2025 there was one customer in the Aerospace Products segment that represented 31% of total accounts receivable, net.

As of December 31, 2024, no single customer or lessee accounted for greater than 10% of total accounts receivable, net.

We earned 11 % and 14 % of our revenue from one customer in the Aviation Leasing segment during the three and six months ended June 30, 2025.

We earn ed 19 % and 13 % o f our revenue from one customer in the Aerospace Products segment during the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, there was one customer in the Aerospace Products segment that represented 39 % of total accounts receivable, net.

As of December 31, 2024, no single customer accounted for greater than 10% of total accounts receivable, net.

We maintain cash and restricted cash balances, which generally exceed federally insured limits, and subject us to credit risk, in high credit quality financial institutions.

We monitor the financial condition of these institutions and have not experienced any losses associated with these accounts.

Allowance for Doubtful Ac counts — We determine the allowance for doubtful accounts based on our assessment of the collectability of our leasing receivables on a lessee-by-lessee basis.

The allowance for doubtful accounts was $ 75.1 million and $ 74.9 million as of March 31, 2025 and December 31, 2024, respectively.

Allowance for Doubtful Accounts — W e determine the allowance for doubtful accounts based on our assessment of the collectability of our leasing receivables on a lessee-by-lessee basis.

The allowance for doubtful accounts was $ 28.4 million and $ 74.9 million as of June 30, 2025 and December 31, 2024, respectively .

We determine the credit loss reserve for note receivables, receivables related to finance leases and inventory sales.

There was a provision for credit losses of $ 0.2 million and $ 0.0 million for the three months ended March 31, 2025 and 2024, respectively, included in operating expenses.

There was a provision for credit losses of $ 0.0 million and $ 0.2 million for the three and six months ended June 30, 2025, respectively.

There was a provision for credit losses of $ 0.1 million for the three and six months ended June 30, 2024, included in operating expenses.

Receivables are written off after all reasonable means to collect the full amount have been exhausted.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Other Current Assets — Other current assets are summarized as follows:

March 31, 2025

June 30, 2025

(unaudited) December 31, 2024

Notes receivable $ 182,720 $ 165,338

Contract asset from the 2025 Partnership 31,498 —

Financing receivable resulting from failed sale-leaseback transactions 39,606 32,486

Prepaid expenses including prepayments for maintenance that has not yet been incurred 30,605 87,323

Purchase deposits 22,120 83,229

Financing receivable resulting from failed sale-leaseback transactions 35,689 32,486

Maintenance right assets 20,844 —

Tax assets 19,776 31,622

Contract asset from the 2025 Partnership 15,184 —

Other 12,370 8,925

1 unchanged sentence

Other Non-Current Assets — Other non-current assets are summarized as follows:

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

March 31, 2025

June 30, 2025

(unaudited) December 31, 2024

1 unchanged sentence

Deferred tax assets 34,681 42,893

Operating lease assets 27,592 28,729

Financing receivable resulting from failed sale-leaseback transactions 21,215 28,412

Maintenance right assets 16,658 25,907

Engine management contract assets 9,550 7,162

Other 8,903 18,515

Other non-current assets $ 166,294 $ 208,430

Other Current Liabilities — Other current liabilities are summarized as follows:

June 30, 2025

(unaudited) December 31, 2024

Deposits on sales of leasing equipment 34,216 $ 87,296

Other 9,406 13,269

Other current liabilities $ 43,622 $ 100,565

Assets Held for Sale— We classify assets as held for sale when the Company commits to a plan to sell and it is probable that the sale will be completed within one year.

These assets are recorded at the lower of their carrying value or fair market value, less costs to sell, starting from the period in which they meet the criteria for this classification.

The Company expects to sell the remaining 41 Seed Assets to the 2025 Partnership and has classified them as held for sale.

The Company expects to sell the remaining eight Seed Assets to the 2025 Partnership which had been classified as held for sale in the first quarter of 2025.

Upon reclassification, depreciation of the long-lived assets within the disposal group ceased, and the related assets and liabilities were transferred to assets held for sale and liabilities held for sale, respectively.

The sales are expected to be completed in the second quarter of 2025.

The sales are expected to be completed in 2025.

The assets and liabilities include the aircraft previously classified as leasing equipment, as well as related intangible assets and liabilities, and maintenance and security deposit liabilities.

The sale of the 45 Seed Assets is treated as a single transaction and one disposal group under ASC 360, Property, plant and equipment , with the aggregate purchase price for Seed Assets, less costs to sell, exceeding the disposal group’s net book value.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Assets and liabilities held for sale are summarized as follows (unaudited):

March 31, 2025

June 30, 2025

Leasing equipment, net $ 120,773

9 unchanged sentences

Dividends— Dividends are recorded if and when declared by the Board of Directors.

For the three months ended March 31, 2025 and 2024, the Board of Directors declared cash dividends of $ 0.30 per ordinary share.

Additionally, in the quarter ended March 31, 2025, the Board of Directors declared cash dividends on the Series C Preferred Shares and Series D Preferred Shares of $ 0.52 and $ 0.59 per share, respectively.

For the three and six months ended June 30, 2025 and 2024, the Board of Directors declared cash dividends of $ 0.30 and $ 0.60 per ordinary share, respectively.

Additionally, in the quarter ended June 30, 2025, the Board of Directors declared cash dividends on the Series C Preferred Shares and Series D Preferred Shares of $ 0.52 and $ 0.59 per share, respectively.

Cash Flow Presentation— Included in net cash (used in) provided by operating activities are inflows from the sale of engine modules and parts that were on engines originally purchased and reported as leasing equipment, net.

2 unchanged sentences

To manufacture the modules and parts and bring them into a salable condition, the Company spends significant costs, often over multiple reporting periods, for new inventory and capitalizable labor (e.g., engineering) that are included in net cash (used in) provided by operating activities as components of the changes in the related working capital accounts.

Therefore, when the costs to manufacture the assets are greater than (predominant to) the estimated value transferred from leasing equipment into inventory, the related cash receipt has been recorded as an inflow in net cash (used in) provided by operating activities.

Therefore, when the costs to manufacture the assets are greater than (predominant to) the estimated value transferred from leasing equipment into inventory, the related cash receipt has been reported as an inflow in net cash (used in) provided by operating activities.

Additionally, the Company buys inventory from third parties with the intent to use the parts in the manufacturing of the items discussed above, which is reported as an outflow in net cash (used in) provided by operating activities.

When rebuilding whole engines for resale, for which the cash inflow upon sale is reported as a cash inflow from investing activities, the Company will

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

transfer modules and parts needed (those purchased from third parties as well as parts from engines previously transferred to inventory from leasing equipment and rebuilt as discussed above) in the rebuild from inventory to leasing equipment.

With respect to purchases of aircraft and engines, when the expected predominant source of cash inflows from the acquired leasing equipment at the time of acquisition is from leasing activities, the related cash outflow is reported as outflows in net cash used in investing activities.

When the expected predominant source of cash inflows is from sales transactions, the related cash outflow is reported as outflows in net cash (used in) provided by operating activities.

The cash and noncash related activities described above during the three months ended March 31, 2025 and 2024 are detailed below (unaudited):

Three Months Ended March 31,

When rebuilding whole engines for resale, for which the cash inflow upon sale is reported as a cash inflow from investing activities, the Company will transfer modules and parts needed (those purchased from third parties as well as parts from engines previously transferred to inventory from leasing equipment and rebuilt as discussed above) in the rebuild from inventory to leasing equipment.

When the expected predominant source of cash inflows is from sales transactions, the related cash outflow is reported as an outflow in net cash (used in) provided by operating activities.

The cash and noncash related activities described above during the six months ended June 30, 2025 and 2024 are detailed below (unaudited):

Six Months Ended June 30,

(in thousands) 2025 2024

2 unchanged sentences

Transfers of inventory to leasing equipment for rebuilding and sale of engines ( 159,997 ) ( 98,192 )

Total outflows related to manufacturing modules and parts - included in net cash (used in) provided by operating activities ( 159,607 ) ( 42,771 )

Cash received for assets sold sourced from leasing equipment - inflow included in cash (used in) provided by operating activities 21,182 20,050

Cash received for sales of leasing equipment that include components sourced from inventory - inflow included in cash used in investing activities 145,450 43,898

Cash paid for engine and aircraft inventory - outflow included in cash provided by (used in) operating activities ( 15,835 ) —

Total outflows related to manufacturing modules and parts - included in net cash used in operating activities ( 313,998 ) ( 128,988 )

Cash received for assets sold sourced from leasing equipment - inflow included in net cash provided by operating activities 43,011 38,649

Cash received for sales of leasing equipment that include components sourced from inventory - inflow included in net cash provided by investing activities 415,416 134,204

Cash paid for engine and aircraft inventory - outflow included in net cash used in operating activities ( 25,715 ) —

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Recent Accounting Pronouncements — In August 2023, the FASB issued ASU 2023‑05, Business Combinations – Joint Venture Formations , which requires that joint ventures, upon formation, apply a new basis of accounting by initially measuring assets and liabilities at fair value.

The amendments in ASU 2023‑05 are effective for joint ventures that are formed on or after January 1, 2025.

In the second quarter of 2025, the Company entered into a joint venture and is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

There have been no other changes to the discussion of recently issued accounting standards included in our Annual Report on Form 10‑K for the year ended December 31, 2024.

Specifically, we continue to monitor the future adoption of ASU 2023‑09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , and ASU 2024‑03, Income Statement—Reporting Comprehensive Income (Topic 220):

Improvements to Reportable Segment Expense Disclosures , both of which have future effective dates.

We are currently evaluating the impact these standards may have on our consolidated financial statements and related disclosures.

ACQUISITION OF LOCKHEED MARTIN COMMERCIAL ENGINE SOLUTIONS

5 unchanged sentences

The results of operations of LMCES have been included in the Company’s results since the effective date of the acquisition.

The acquisition of LMCES was accounted for as a business combination and, as such, the following fair values were assigned to assets acquired and liabilities assumed based on the Company’s estimates and assumptions and are preliminary.

The significant assumptions used to estimate the fair values of the property, plant, and equipment and inventory included replacement cost estimates and market data for similar assets where available.

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.

The final acquisition accounting adjustments may be materially different and may include (i) changes in fair values of property, plant and equipment and associated salvage values;

(ii) changes in fair values of inventory;

(iii) changes in goodwill;

(iv) changes due to net working capital adjustments;

and (v) changes to other assets and other liabilities.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes the preliminary allocation of the net assets acquired:

Subsequent to the acquisition, in the quarter ended June 30, 2025, measurement period adjustments as of the acquisition date were made as a result of the finalization of the net working capital adjustments which increased total consideration by $ 14.1 million.

This adjustment resulted in an increase in goodwill of $ 14.1 million.

The following table summarizes the allocation of the net assets acquired:

September 9, 2024

22 unchanged sentences

( 2 ) Total consideration is calculated as cash paid, adjusted for the settlement of pre-existing relationships.

Cash consideration is also preliminary, as it is subject to net working capital adjustments.

The following table presents preliminary fair values of the components of property, plant and equipment acquired and their estimated useful lives:

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents fair values of the components of property, plant and equipment acquired and their estimated useful lives:

Estimated useful life in years Estimated Fair value

9 unchanged sentences

The following unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of January 1, 2024.

Three Months Ended March 31, 2024

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2024

Total revenue $ 466,007 $ 804,283

Net income attributable to shareholders $ ( 225,945 ) $ ( 193,843 )

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

LEASING EQUIPMENT, NET

Leasing equipment, net is summarized as follows:

March 31, 2025

June 30, 2025

(unaudited) December 31, 2024

2 unchanged sentences

Leasing equipment, net $ 1,849,116 $ 2,373,730

Due to specific transactions, we identified certain assets in our leasing equipment portfolio with indicators of impairment.

As a result, we adjusted the carrying value of these assets to fair value and recognized transactional impairment charges of $ 0.0 million and $ 1.0 million, net of redelivery compensation, during the three months ended March 31, 2025 and 2024, respectively.

We identified certain assets in our leasing equipment portfolio with indicators of impairment.

During the three and six months ended June 30, 2025, the Company did not record any transactional impairment charges.

In comparison, for the three and six months ended June 30, 2024 the Company recognized transactional impairment charges of $ 0.0 million and $ 1.0 million, respectively, net of redelivery compensation.

Depreciation expense for leasing equipment is summarized as follows (unaudited):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Depreciation expense for leasing equipment $ 51,249 $ 55,658 107,135 104,560

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table presents the ownership interests and carrying values of our investments:

Carrying Value

Investment Ownership Percentage March 31, 2025

Investment Ownership Percentage June 30, 2025

(unaudited) December 31, 2024

1 unchanged sentence

2025 Partnership Equity method 20 % 95,306 —

QuickTurn Europe Equity method 50 % 10,451 —

$ 125,713 $ 19,048

We did not recognize any other-than-temporary impairments for the three months ended March 31, 2025 and 2024.

The following table presents our proportionate share of equity in earnings (losses) (unaudited):

Three Months Ended March 31,

We did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2025 and 2024.

The following table presents our proportionate share of equity in (losses) earnings (unaudited):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Advanced Engine Repair JV $ 795 $ ( 633 ) $ 908 $ ( 1,154 )

1 unchanged sentence

2025 Partnership (1)

( 5,717 ) — ( 13,444 ) —

QuickTurn Europe ( 81 ) — ( 81 ) —

Total $ ( 5,003 ) $ ( 694 ) $ ( 12,617 ) $ ( 1,361 )

______________________________________________________

(1) Includes the profit elimination of $( 4,935 ) and $( 11,885 ) for the three and six months ended June 30, 2025, respectively, and $ 0 and $ 0 for the three and six months ended June 30, 2024, respectively, for sales to the 2025 Partnership.

Equity Method Investments

10 unchanged sentences

2025 Partnership

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

During the first quarter of 2025, we invested $ 20.0 million in the 2025 Partnership, an investment focused on acquiring 737NG and A320ceo on-lease narrowbody aircraft, for which we are the General Partner and hold a 20 % limited partner ownership.

In 2025, we invested $ 108.8 million in the 2025 Partnership, an investment focused on acquiring 737NG and A320ceo on-lease narrowbody aircraft, for which we are the Servicer and hold a 20 % limited partner ownership.

We exercise significant influence over this investment and account for it using the equity method.

The Company's proportionate share of equity in earnings related to this investment is based on the contractual profit-sharing arrangement, the elimination of profit on sales of engine and modules to the 2025 Partnership under ASC 606, and the servicing fees charged by us in our capacity as the General Partner to the 2025 Partnership.

The profit is eliminated through equity method earnings and will be recognized over time as the 2025 Partnership generates income from leasing and sales activities.

Variable Interest Entities

The Company evaluates its investments and other significant relationships to determine whether an investee qualifies as a variable interest entity (“VIE”).

If an investee is deemed a VIE, we assess our authority to direct its activities, our obligation to absorb its expected losses, and our right to receive its residual returns to determine whether we are the primary beneficiary.

If the Company determines that we are the primary beneficiary of a VIE, we consolidate the entity and recognize the non-controlling interests of other beneficiaries.

To make this determination, we conduct an analysis that primarily considers the entity’s purpose, design, and associated risks, as well as its capital structure, the terms of agreements between the VIE and its variable interest holders and other involved parties, and any affiliations with related parties.

Unconsolidated VIE

Certain of the Company’s equity method investments are considered variable interest entities (“VIE”), as defined under the accounting guidance for consolidation.

The Company is not considered the primary beneficiary of and therefore does not consolidate the VIEs.

The Company’s involvement with the VIEs is in the form of equity interests, which are recorded within investments.

The primary purpose of our U.S.-based and foreign-based unconsolidated VIE investments is to create strategic partnerships with third-party institutional investors to acquire 737NG and A320ceo on-lease narrowbody aircraft.

The Company’s maximum exposure to loss with respect to the VIEs is its investments.

The following table sets forth the Company’s investments in its unconsolidated VIEs and the maximum exposure to loss:

March 31, 2025

(unaudited) December 31, 2024

Investment Maximum Exposure to Loss Investment Maximum Exposure to Loss

Variable Interest Entity $ 12,239 $ 12,239 $ — $ —

Consolidated VIE

The Company also had a consolidated VIE investment associated with the 2025 Partnership, for which we are determined to be the primary beneficiary.

However, the carrying amounts of the assets and liabilities of the consolidated VIE were $ 0.0 million and $ 0.0 million as of March 31, 2025 and December 31, 2024, respectively.

As the Servicer, we are responsible for lessee invoicing and collections, airline relationship management, contracts management including lease extension and aircraft deliveries and redeliveries.

The profit from the MRE Contract revenue is eliminated through equity method earnings and will be recognized over time as the 2025 Partnership generates income from leasing and sales activities.

QuickTurn Europe

On June 5, 2025, we invested $ 10.5 million for a 50 % interest in Quick Turn Engine Center Europe S.r.l.

(previously IAG Engine Center Europe S.r.l.) or “QuickTurn Europe”, a 200,000 square-foot CFM56 engine maintenance repair and overhaul facility located at the Rome Fiumicino Airport.

The joint venture was established to expand our global engine maintenance capabilities and meet increasing demand for MRE services.

We account for our investment in QuickTurn Europe as an equity method investment as we have significant influence through our interest.

FTAI AVIATION LTD.

3 unchanged sentences

Intangible assets and liabilities, net are summarized as follows:

March 31, 2025

June 30, 2025

(unaudited) December 31, 2024

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Amortization of intangible assets and liabilities is recorded as follows (unaudited):

Classification in Consolidated Statements of Operations Three Months Ended March 31,

Classification in Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Lease intangibles Lease income $ 2,153 $ 3,786 $ 5,359 $ 7,762

1 unchanged sentence

Total $ 2,277 3,881 $ 5,578 7,974

As of March 31, 2025, estimated net annual amortization of intangibles is as follows (unaudited):

As of June 30, 2025, estimated net annual amortization of intangibles is as follows (unaudited):

Remainder of 2025 $ 1,807

5 unchanged sentences

Our debt, net is summarized as follows:

March 31, 2025 (unaudited) December 31, 2024

June 30, 2025 (unaudited) December 31, 2024

Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings

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(1) Requires a quarterly commitment fee at a rate of 0.50 % on the average daily unused portion, as well as customary letter of credit fees and agency fees.

(2) Includes an unamortized premium of $ 1,287 and $ 1,382 at March 31, 2025 and December 31, 2024, respectively.

(3) Includes an unamortized discount of $ 2,832 and $ 2,929 at March 31, 2025 and December 31, 2024, respectively.

(4) Includes an unamortized discount of $ 2,392 and $ 2,449 at March 31, 2025 and December 31, 2024, respectively.

We were in compliance with all debt covenants as of March 31, 2025.

(2) Includes an unamortized premium of $ 1,191 and $ 1,382 at June 30, 2025 and December 31, 2024, respectively.

(3) Includes an unamortized discount of $ 2,734 and $ 2,929 at June 30, 2025 and December 31, 2024, respectively.

(4) Includes an unamortized discount of $ 2,335 and $ 2,449 at June 30, 2025 and December 31, 2024, respectively.

We were in compliance with all debt covenants as of June 30, 2025.

FAIR VALUE MEASUREMENTS

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The fair values of our bonds payable are presented in the table below and classified as Level 2 within the fair value hierarchy:

March 31, 2025

June 30, 2025

(unaudited) December 31, 2024

5 unchanged sentences

The Company has contingent obligations under ASC 460, Guarantees , in connection with certain sales of aircraft on lease, which are measured at fair value.

The guarantees are valued at $ 9.2 million and $ 8.9 million as of March 31, 2025 and December 31, 2024, respectively, and are reflected as a component of other non-current liabilities.

The guarantees are valued at $ 11.0 million and $ 8.9 million as of June 30, 2025 and December 31, 2024, respectively, and are reflected as a component of other non-current liabilities.

The fair values of the guarantees are determined based on the estim ated condition of the engines at the end of each lease term and the estimated cost of replacement and applicable discount rates and are classified as Level 3.

The Company recorded a $ 0.3 million increase related to the change in fair value, which is recorded in Asset sales revenue, during the three months ended March 31, 2025 and 2024, respectively.

During the three months ended March 31, 2025 and 2024, there were no significant transfers into or out of Level 3.

Given variability in the condition of the engines at the end of the lease terms, which range from 3 to 8 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at March 31, 2025 was $ 37.2 million, which is not reasonably expected.

During the three and six months ended June 30, 2025, the Company recorded increases related to the change in fair value of $ 1.8 million and $ 2.1 million, respectively, which are recorded in Asset sales revenue.

During the three and six months ended June 30, 2024, the Company recorded increases related to the change in fair value of $ 0.8 million and $ 1.0 million, respectively, which are recorded in Asset sales revenue.

Given variability in the condition of the engines at the end of the lease terms, which range from 3 to 8 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at June 30, 2025 was $ 43.0 million, which is not reasonably expected.

We measure the fair value of certain assets on a non-recurring basis when U.S.

2 unchanged sentences

We record such assets at fair value when it is determined the carrying value may not be recoverable.

Fair value measurements for assets subject to impairment tests are based on an income approach which uses Level 3 inputs, which include our assumptions as to future cash flows from operation of the l easing and eventual sale of assets.

EQUITY-BASED COMPENSATION

We have a Nonqualified Stock Option and Incentive Award Plan (“Incentive Plan”) which provides for the ability to award equity compensation awards in the form of stock options to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

As of March 31, 2025, the Incentive Plan provides for the issuance of up to 28.2 million shares.

We have a FTAI Aviation Ltd.

2025 Omnibus Incentive Plan (the “Incentive Plan”) which provides for the ability to award equity compensation awards in the form of stock options to eligible employees, consultants, directors, and other individuals who provide services to us, each as determined by the Compensation Committee of the Board of Directors.

As of June 30, 2025, the Incentive Plan provides for the issuance of up to 5.7 million shares.

Equity-based compensation expense is reported within cost of sales and operating expenses.

2 unchanged sentences

Equity-based compensation for each type of award was as follows (unaudited):

Three Months Ended March 31, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years)

Stock Options $ 127 $ — $ 1,651 9.2

Performance shares 3,262 — $ 47,266 3.3

Restricted shares 1,500 510 18,788 2.4

Three Months Ended June 30, Six Months Ended June 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term

2025 2024 2025 2024

Stock Options $ 127 $ 42 $ 254 $ 42 $ 1,524 8.2 years

Performance shares 3,501 — 6,763 — 43,762 3.3 years

Restricted Shares 1,887 596 3,387 1,106 17,773 2.2 years

Total $ 5,515 $ 638 $ 10,404 $ 1,148 $ 63,059

During the three months ended March 31, 2025, the Company did not issue any options to employees.

During the three months ended March 31, 2024, the Former Manager transferred 49,790 of its options to certain of the Manager’s employees.

All of these options were issued prior to Internalization.

Performance Shares

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

During the three months ended March 31, 2025, we issued performance shares to select officers and employees of the Company with a grant date fair value of $ 4.4 million, vesting over a 3 year performance period based on the achievement of relative total shareholder return ( 50 %) and cumulative diluted EPS ( 50 %).

In 2025, the Company did not issue any options to employees.

During the six months ended June 30, 2024, the Former Manager transferred 37,343 of its options to certain of the Former Manager’s employees.

Additionally, the Company granted options to select employees related to 60,000 ordinary shares at an exercise price of $ 79.13 , which had a grant date fair value of $ 2.1 million.

The assumptions used in valuing the options were:

a 4.52 % risk-free rate, a 1.50 % dividend yield, a 43.00 % volatility and a 6.8 year term.

Performance Shares

During the six months ended June 30, 2025, we issued performance shares to select officers and employees of the Company with a grant date fair value of $ 4.4 million, vesting over a 3 year performance period based on the achievement of relative total shareholder return ( 50 %) and cumulative diluted EPS ( 50 %).

Restricted Shares

During the three months ended March 31, 2025, we issued restricted shares to select officers and employees of the Company with a grant date fair value of $ 5.5 million, vesting over 3 years.

During the six months ended June 30, 2025, we issued restricted shares to select officers and employees of the Company with a grant date fair value of $ 5.5 million, vesting over 3 years.

Additionally, we issued restricted shares to the directors of the Company with a grant date fair value of $ 0.8 million.

These awards vest on the earlier of (i) the one-year anniversary of the grant date (May 29, 2026) or (ii) the date of the Company’s next annual general meeting of shareholders occurring after the grant date.

During the six months ended June 30, 2024, we issued restricted shares of the Company to select employees that had a grant date fair value of $ 5.7 million and vest over 4.0 years.

These awards are subject to continued employment, and the compensation expense is recognized ratably over the vesting periods, with 50 % of the units vesting on June 30, 2027 and the remaining units vesting on June 30, 2028.

Additionally, we issued restricted shares of the Company to select officers of the Company that had a grant date fair value of $ 5.5 million and vest over 3.0 years.

These awards are subject to continued employment, and the compensation expense is recognized ratably over the three-year vesting period.

All awards are subject to continued employment, with compensation expense recognized ratably over the vesting periods.

The fair values of the cumulative diluted EPS performance shares and restricted shares were based on the closing price of FTAI Aviation Ltd.’s ordinary shares on the respective grant dates, and the fair value of the total shareholder return performance shares was determined using the Monte Carlo simulation.

The fair values of the cumulative diluted EPS performance shares and restricted shares were based on the closing price of the Company’s ordinary shares on the respective grant dates, and the fair value of the total shareholder return performance shares was determined using the Monte Carlo simulation.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The current and deferred components of the provision for income taxes are as follows (unaudited):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Cayman Islands $ — $ — $ — $ —

Bermuda — — — —

United States:

10 unchanged sentences

Other Non-U.S.

Total deferred provision 20,683 4,548

Total provision for income taxes $ 22,859 $ 5,572

14,647 ( 4,174 ) 29,285 ( 3,475 )

Total deferred provision (benefit) 27,116 ( 14,271 ) 47,799 ( 9,723 )

Total provision for (benefit from) income taxes $ 37,878 $ ( 13,033 ) $ 60,737 $ ( 7,461 )

The Company is an exempted entity domiciled in the Cayman Islands where income taxes are not imposed.

4 unchanged sentences

Our effective tax rate differs from the Cayman Islands statutory rate of 0% primarily due to a significant portion of our income being subject to tax in jurisdictions where we operate.

As of and for the three months ended March 31, 2025, we had not established a liability for uncertain tax positions as no such positions existed.

As of and for the six months ended June 30, 2025, we had not established a liability for uncertain tax positions as no such positions existed.

In general, our tax returns and the tax returns of our corporate subsidiaries are subject to U.S.

2 unchanged sentences

We do not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

AFFILIATE TRANSACTIONS AND FORMER MANAGEMENT AGREEMENT

2 unchanged sentences

As part of the first partnership under the initiative, certain subsidiaries of the Company entered into an Aircraft Sale and Purchase Agreement, dated December 30, 2024, and a Beneficial Interest Sale and Purchase Agreement, dated December 30, 2024 (together, and as each may be amended from time to time, the “Aircraft Sale and Purchase Agreements”), pursuant to which special purpose entities (the “SPVs”) of the 2025 Partnership will acquire 45 on-lease 737NG and A320ceo aircraft for an aggregate net purchase price of approximately $ 500.0 million, subject to certain customary closing conditions.

The SPVs have entered into agreements with third-party institutional investors for the private placement of limited partner interests in the SPVs.

The Company also made a minority limited partner investment and will make future investments in the 2025 Partnership in the same proportion relative to third party limited partner investments.

During 2024 and the three month period ended March 31, 2025, on behalf of the 2025 Partnership, the Company paid refundable deposits of $ 19.3 million and $ 25.4 million to unrelated, third-parties on future purchases of aircraft, respectively.

As of March 31, 2025, the 2025 Partnership reimbursed the Company $ 42.8 million in refundable deposits, and the remaining $ 1.9 million owed to the Company is recorded in other current assets.

The Company, along with certain subsidiaries of the SPVs, has entered into a MRE Agreement that requires the Company to sell serviceable engines and modules and purchase unserviceable engines and modules from the SPVs when aircraft controlled by the SPVs need such serviceable engines and modules to fulfill their obligations under an aircraft lease.

Under this agreement, the Company will sell CFM56-5B, CFM56-7B and V2500 commercial aircraft engines and related modules to the SPVs and purchase unserviceable engines and modules for a net cash purchase price.

The net cash purchase price received by the Company is contractual and customary market-based compensation for fulfilling such performance obligations, primarily through sales transactions where serviceable engines and modules are exchanged for cash consideration and noncash consideration, in which unserviceable engines or modules owned by the 2025 Partnership are transferred to the Company.

Revenue from these transactions is recognized under ASC 606 when control of the serviceable engine or module transfers to the 2025 Partnership.

During the three month period March 31, 2025 and 2024, the Company recorded revenue of $ 100.6 million and $ 0.0 million , for sale and purchase of such engines to and from the 2025 Partnership.

The SPVs have entered into agreements with third-party institutional investors for capital commitments to the SPVs.

The Company also made a minority capital commitment and will make additional commitments to the 2025 Partnership in the same proportion relative to additional third-party institutional investors.

During 2024 and the six month period ended June 30, 2025, on behalf of the 2025 Partnership, the Company paid refundable deposits of $ 19.3 million and $ 23.5 million to unrelated, third-parties on future purchases of aircraft, respectively.

As of June 30, 2025, the 2025 Partnership fully reimbursed the Company $ 42.8 million in refundable deposits.

The Company, along with certain subsidiaries of the SPVs, has entered into an MRE agreement that requires the Company to sell serviceable engines and modules and purchase unserviceable engines and modules from the SPVs when aircraft controlled by the SPVs need such serviceable engines and modules to fulfill their obligations under an aircraft lease.

Under this agreement, the Company will sell CFM56-5B, CFM56-7B and V2500 commercial aircraft engines and related modules to the SPVs and

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

purchase unserviceable engines and modules for a net cash purchase price.

The net cash purchase price received by the Company is contractual and customary market-based compensation for fulfilling such performance obligations.

Revenue from these transactions, classified as MRE Contract revenue, is recognized under ASC 606 when control of the serviceable engine or module transfers to the 2025 Partnership.

During the three and six month period June 30, 2025, the Company recorded $ 69.6 million and $ 170.2 million of MRE Contract revenue, respectively, for the sale and purchase of such engines to and from the 2025 Partnership.

Former Management Agreement

6 unchanged sentences

Under the Transition Services Agreement, the Former Manager was required to continue to provide the Company and its affiliates with all of the Services for a transition period through October 31, 2024, during which the Company procured replacements for the Services.

The Services were provided to the Company for a fee equal to the Former Manager’s cost of providing the Services, plus a mark-up of ten percent ( 10 %).

Prior to the Internalization, the Former Manager was paid annual fees in exchange for advising us on various aspects of our business, formulating our investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing our day-to-day operations, inclusive of all costs incidental thereto.

5 unchanged sentences

GAAP at the end of the two most recently completed months multiplied by an annual rate of 1.50 %, which was payable monthly in arrears in cash.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Prior to the Internalization and the termination of the Management Agreement on May 28, 2024, Master GP, was entitled to incentive allocations (comprised of income incentive allocation and capital gains incentive allocation, defined below).

9 unchanged sentences

Prior to the Internalization, Capital Gains Incentive Allocation was calculated and distributable in arrears as of the end of each calendar year and was equal to 10 % of our pro rata share of cumulative realized gains from the date of the IPO through the end of the applicable calendar year, net of our pro rata share of cumulative realized or unrealized losses, the cumulative non-cash portion of equity-based compensation expenses and all realized gains upon which prior performance-based Capital Gains Incentive Allocation payments were made to Master GP.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The following table summarizes the management fees and income incentive allocation prior to the Internalization (unaudited):

Three Months Ended

March 31, 2024

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Management fees $ 405 $ 992

7 unchanged sentences

The following table summarizes our reimbursements to the Former Manager (unaudited):

Three Months Ended

March 31, 2025 March 31, 2024

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Classification in the Consolidated Statements of Operations:

2 unchanged sentences

Total $ 204 $ 1,978 $ 504 $ 4,245

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

Upon the successful completion of an offering of our ordinary shares or other equity securities (including securities issued as consideration in an acquisition), we granted the Former Manager options to purchase ordinary shares in an amount equal to 10 % of the number of ordinary shares being sold in the offering (or if the issuance relates to equity securities other than our ordinary shares, options to purchase a number of ordinary shares equal to 10 % of the gross capital raised in the equity issuance divided by the fair market value of a ordinary share as of the date of issuance), with an exercise price equal to the offering price per share paid by the public or other ultimate purchaser or attributed to such securities in connection with an acquisition (or the fair market value of a ordinary share as of the date of the equity issuance if it relates to equity securities other than our ordinary shares).

9 unchanged sentences

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 results from an offshore energy business, which consists of vessels and equipment that support offshore oil and gas activities and production which are typically subject to operating leases.

We sold the two offshore vessels in 2024.

Additionally, Corporate and Other also includes results from an offshore energy business, which consists of equipment that support offshore oil and gas activities and production.

We previously owned two offshore vessels that were sold in the fourth quarter of 2024.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

The accounting policies of the segments are the same as those described in the summary of significant accounting policies;

7 unchanged sentences

The following tables set forth certain information, which include all significant expenses reviewed by the CODM, for each reportable segment (unaudited):

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

Three Months Ended June 30, 2025

Aviation Leasing Aerospace Products Corporate and Other Eliminations Total

Aerospace products revenue $ — $ 420,686 $ — $ — 420,686

MRE Contract revenue — 69,585 — — 69,585

Lease income 62,439 — — — 62,439

Maintenance revenue 73,104 — — — 73,104

Asset sales revenue 47,915 — — — 47,915

Other revenue (1)

2,508 — — — 2,508

Total revenues $ 185,966 $ 490,271 $ — $ — $ 676,237

Cost of sales 51,789 317,469 — — 369,258

Operating expenses 11,089 8,989 14,250 — 34,328

General and administrative — — 2,442 — 2,442

Acquisition and transaction expenses 577 1,414 2,498 — 4,489

Depreciation and amortization 50,423 3,704 1,109 — 55,236

Total expenses 113,878 331,576 20,299 — 465,753

Other income (expense)

Interest expense — — ( 63,965 ) — ( 63,965 )

Equity in (losses) earnings of unconsolidated entities (2)

( 782 ) 714 — ( 4,935 ) ( 5,003 )

Gain on sale to the 2025 Partnership 34,604 — — — 34,604

Other income 26,974 — 182 — 27,156

Total other income (expense) 60,796 714 ( 63,783 ) ( 4,935 ) ( 7,208 )

Income (loss) before income taxes 132,884 159,409 ( 84,082 ) ( 4,935 ) 203,276

Provision for (benefit from) income taxes 26,453 25,827 ( 14,402 ) — 37,878

Net income (loss) 106,431 133,582 ( 69,680 ) ( 4,935 ) 165,398

Dividends on preferred shares — — 3,709 — 3,709

Net income (loss) attributable to shareholders $ 106,431 $ 133,582 $ ( 73,389 ) $ ( 4,935 ) $ 161,689

______________________________________________________

(1) Includes servicing fees of $ 2,052 for the three months ended June 30, 2025 from the 2025 Partnership.

(2) Includes the profit elimination of $( 4,935 ) for the three months ended June 30, 2025 for sales to the 2025 Partnership within the Aerospace Products segment.

FTAI AVIATION LTD.

1 unchanged sentence

(Dollars in tables in thousands, unless otherwise noted)

Three Months Ended March 31, 2025

Summary information with respect to our geographic sources of revenue, based on location of customer and lessee, is as follows:

Three Months Ended June 30, 2025

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 8,595 $ 17,000 $ — $ 25,595

Asia 54,211 39,327 — $ 93,538

Europe 83,257 126,444 — $ 209,701

North America 31,602 298,039 — $ 329,641

South America 8,301 9,461 — $ 17,762

Total revenues (1)

$ 185,966 $ 490,271 $ — $ 676,237

______________________________________________________

(1) The United States, included in North America, and Ireland, included in Europe, represent 38 % and 14 % of total revenues, respectively, based on the location of our lessees.

No other country represents more than 10% of total revenues.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2025

Six Months Ended June 30, 2025

Aviation Leasing Aerospace Products Corporate and Other Eliminations Total

Aerospace products revenue $ — $ 685,111 $ — $ — $ 685,111

$ — $ 365,063 $ — $ — $ 365,063

MRE Contract revenue — 170,223 — — 170,223

Lease income 130,879 — — — 130,879

1 unchanged sentence

Asset sales revenue 66,854 — — — 66,854

Other revenue (1)

2,535 — 4 — 2,539

Total revenues $ 322,979 $ 855,334 $ 4 $ — $ 1,178,317

9 unchanged sentences

( 1,559 ) 827 — ( 11,885 ) ( 12,617 )

Gain on sale to the 2025 Partnership 45,474 — — — 45,474

Other income 59,593 — 634 — 60,227

43,489 — 452 — 43,941

Total other income (expense) 103,508 827 ( 125,371 ) ( 11,885 ) ( 32,921 )

6 unchanged sentences

______________________________________________________

(1) Includes revenue of $ 100,638 for the three months ended March 31, 2025 for sales to the 2025 Partnership.

See Note 11 for additional information.

(2) Includes the profit elimination of $( 6,950 ) for the three months ended March 31, 2025 for sales to the 2025 Partnership within the Aerospace Products segment.

(3) Includes gain on sale of $ 10,870 for the three months ended March 31, 2025 for sales to the 2025 Partnership within the Aviation Leasing segment.

(1) Includes servicing fees of $ 2,600 for the six months ended June 30, 2025 from the 2025 Partnership.

(2) Includes the profit elimination of $( 11,885 ) for the six months ended June 30, 2025 for sales to the 2025 Partnership within the Aerospace Products segment.

FTAI AVIATION LTD.

2 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer and lessee, is as follows:

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Aviation Leasing Aerospace Products Corporate and Other Total

7 unchanged sentences

______________________________________________________

(1) The United States, included in North America, Ireland, included in Europe, and Bermuda, included in North America, represent 26 %, 19 % and 11 % of total revenues, respectively, based on the location of our lessees.

(1) The United States, included in North America, and Ireland, included in Europe, represent 33 % and 16 % of total revenues, respectively, based on the location of our lessees.

No other country represents more than 10% of total revenues.

Presented below are the contracted minimum future annual revenues to be received under existing operating leases as of March 31, 2025:

March 31, 2025

Presented below are the contracted minimum future annual revenues to be received under existing operating leases as of June 30, 2025:

Operating Leases

Remainder of 2025 $ 91,960

4 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

For the Three Months Ended March 31, 2024

Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Three Months Ended June 30, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

3 unchanged sentences

Asset sales revenue 72,433 — — 72,433

Other revenue 58 — 3,962 4,020

Total revenues $ 184,437 $ 245,200 $ 13,957 $ 443,594

4 unchanged sentences

Management fees and incentive allocation to affiliate — — 3,554 3,554

Internalization fee to affiliate — — 300,000 300,000

Depreciation and amortization 52,672 938 3,081 56,691

Total expenses 122,392 154,774 329,023 606,189

Other expense

Interest expense — — ( 55,196 ) ( 55,196 )

Loss on extinguishment of debt — — ( 13,920 ) ( 13,920 )

Equity in losses of unconsolidated entities ( 61 ) ( 633 ) — ( 694 )

Other (expense) income ( 911 ) — 413 ( 498 )

Total other expense ( 972 ) ( 633 ) ( 68,703 ) ( 70,308 )

Income (loss) before income taxes 61,073 89,793 ( 383,769 ) ( 232,903 )

Provision for (benefit from) income taxes 8,293 4,918 ( 26,244 ) ( 13,033 )

Net income (loss) 52,780 84,875 ( 357,525 ) ( 219,870 )

Dividends on preferred shares — — 8,335 8,335

Net income (loss) attributable to shareholders $ 52,780 $ 84,875 $ ( 365,860 ) $ ( 228,205 )

Summary information with respect to our geographic sources of revenue, based on location of customer and lessee, is as follows:

Three Months Ended June 30, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

Africa $ 1,255 $ 2,585 $ — $ 3,840

Asia 33,642 28,530 13,957 76,129

Europe 107,573 104,900 — 212,473

North America 26,162 105,770 — 131,932

South America 15,805 3,415 — 19,220

Total revenues (1)

$ 184,437 $ 245,200 $ 13,957 $ 443,594

______________________________________________________

(1) The United States, included in North America, and Ireland, included in Europe, represent 29 % and 25 % of total revenues, respectively, based on the location of our lessees.

No other country represents more than 10% of total revenues.

FTAI AVIATION LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Dollars in tables in thousands, unless otherwise noted)

For the Six Months Ended June 30, 2024

Six Months Ended June 30, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

Aerospace products revenue $ — $ 434,257 $ — $ 434,257

Lease income 111,605 — 12,310 123,915

Maintenance revenue 96,977 — — 96,977

Asset sales revenue 111,040 — — 111,040

Other revenue 125 — 3,974 4,099

Total revenues $ 319,747 $ 434,257 $ 16,284 $ 770,288

Cost of sales 90,858 257,803 — 348,661

Operating expenses 16,989 13,893 23,534 54,416

General and administrative — — 6,652 6,652

Acquisition and transaction expenses 4,730 771 8,697 14,198

Management fees and incentive allocation to affiliate — — 8,449 8,449

Internalization fee to affiliate — — 300,000 300,000

Depreciation and amortization 98,756 1,871 5,984 106,611

Asset impairment 962 — — 962

Total expenses 212,295 274,338 353,316 839,949

Other income (expense)

Other expense

Interest expense — — ( 102,903 ) ( 102,903 )

Loss on extinguishment of debt — — ( 13,920 ) ( 13,920 )

Equity in losses of unconsolidated entities ( 207 ) ( 1,154 ) — ( 1,361 )

Other income 369 — 265 634

Total other income (expense) 223 ( 521 ) ( 47,442 ) ( 47,740 )

Other (expense) income ( 542 ) — 678 136

Total other expense ( 749 ) ( 1,154 ) ( 116,145 ) ( 118,048 )

Income (loss) before income taxes 106,703 158,765 ( 453,177 ) ( 187,709 )

Provision for income taxes 3,033 2,539 — 5,572

Provision for (benefit from) income taxes 11,326 7,457 ( 26,244 ) ( 7,461 )

Net income (loss) 95,377 151,308 ( 426,933 ) ( 180,248 )

2 unchanged sentences

Summary information with respect to our geographic sources of revenue, based on location of customer and lessee, is as follows:

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Aviation Leasing Aerospace Products Corporate and Other Total

14 unchanged sentences

The following tables sets forth the geographic location of property, plant and equipment and leasing equipment, net:

March 31, 2025

June 30, 2025

(unaudited) December 31, 2024

7 unchanged sentences

$ 1,959,600 $ 2,481,181

(1) The United States, included in North America represents 19 % of property, plant and equipment and leasing equipment, net as of March 31, 2025.

________________________________________________________

(1) The United States, included in North America, represents 21% of property, plant and equipment and leasing equipment, net as of June 30, 2025.

The United States, included in North America, and Italy, included in Europe, represent 17 % and 12 % of property, plant and equipment and leasing equipment, net as of December 31, 2024, respectively.

5 unchanged sentences

The calculation of basic and diluted EPS is presented below (unaudited):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands, except share and per share data) 2025 2024 2025 2024

Net income $ 102,386 $ 39,622

Net income (loss) $ 165,398 $ ( 219,870 ) $ 267,784 $ ( 180,248 )

Dividends on preferred shares 3,709 8,335 9,824 16,670

Loss on redemption of preferred shares — — 6,327 —

Net income attributable to shareholders $ 89,944 $ 31,287

Net income (loss) attributable to shareholders $ 161,689 $ ( 228,205 ) $ 251,633 $ ( 196,918 )

Weighted Average Ordinary Shares Outstanding - Basic 102,558,777 100,958,524 102,555,644 100,602,214

Weighted Average Ordinary Shares Outstanding - Diluted 103,147,860 100,958,524 103,144,727 100,602,214

Earnings per share:

Earnings (loss) per share:

Basic $ 1.58 $ ( 2.26 ) $ 2.45 $ ( 1.96 )

Diluted $ 1.57 $ ( 2.26 ) $ 2.44 $ ( 1.96 )

For the three months ended March 31, 2025 and 2024, no shares have been excluded from the calculation of diluted EPS.

Preferred Shares

In February 2025, the Company redeemed in full the outstanding 4,940,000 8.00 % Fixed-to-Floating Rate Series B Cumulative Perpetual Redeemable Preferred Shares at a redemption price equal to $ 25.00 per share in cash, plus $ 2.4 million of accumulated and unpaid distributions thereon to, but not including, the redemption date of February 16, 2025.

For the three and six months ended June 30, 2025 and 2024 no shares have been excluded from the calculation of Diluted EPS, because the impact would be anti-dilutive.

During the six months ended June 30, 2025 and 2024, we issued 676 and 4,370 ordinary shares to certain directors as compensation.

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Within our offshore energy business, a lessee did not fulfill its obligation under its charter arrangement, therefore we are pursuing rights afforded to us under the charter and the range of potential losses against the obligation is $ 0.0 million to $ 3.3 million.

Our maximum exposure under other arrangements is unknown as no additional claims have been made.

We believe the risk of loss in connection with such arrangements is remote.

2 unchanged sentences

(Dollars in tables in thousands, unless otherwise noted)

Internalization — During the second quarter of 2024, the Company entered into the Internalization Agreement with the Former Manager and Master GP.

Pursuant to the Internalization Agreement, the Management Agreement was terminated effective May 28, 2024, except that certain indemnification and other obligations survive, and the Company was no longer required to pay management fees or incentive distributions with respect to any period thereafter.

As a result of the Internalization, the Company ceased to be externally managed and operates as an internally managed company.

In connection with the termination of the Management Agreement, the Company (i) agreed to pay the Former Manager (for itself and on behalf of the Master GP, as applicable) the Cash Consideration, the compensation accrued and payable, but not yet paid, under the Management Agreement and the expenses that were reimbursable, but not yet reimbursed, under the Management Agreement;

(ii) issued to the Former Manager (for itself and on behalf of the Master GP, as applicable) the Share Consideration;

and (iii) purchased from Master GP all of its partnership interests in FTAI Aviation Holdco Ltd., a subsidiary of the Company, in exchange for $ 30 thousand.

RESTRUCTURING CHARGES

2 unchanged sentences

The remaining balance was paid in cash on June 17, 2024.

There were no restructuring charges recorded for the three months ended March 31, 2025 and 2024, respectively.

The restructuring charge paid in connection with the Internalization and termination of the Management Agreement is reflected in Internalization Fee to Affiliate expense in the Consolidated Statements of Operations for the three and six months ended June 30, 2024.

There were no restructuring charges recorded for the three and six months ended June 30, 20 25.

SUBSEQUENT EVENTS

On April 30, 2025, our Board of Directors declared a cash dividend on our ordinary shares and eligible participating securities of $ 0.30 per share for the quarter ended March 31, 2025, payable on May 23, 2025 to the holders of record on May 16, 2025.

Additionally, on April 30, 2025, our Board of Directors also declared cash dividends on the Series C Preferred Shares and Series D Preferred Shares of $ 0.52 and $ 0.59 per share, respectively, payable on May 19, 2025 to the holders of record on May 12, 2025.

On July 29, 2025, our Board of Directors declared a cash dividend on our ordinary shares and eligible participating securities of $ 0.30 per share for the quarter ended June 30, 2025, payable on August 19, 2025 to the holders of record on August 12, 2025.

Additionally, on July 29, 2025, our Board of Directors also declared cash dividends on the Series C Preferred Shares and Series D Preferred Shares of $ 0.52 and $ 0.59 per share, respectively, payable on August 15, 2025 to the holders of record on August 8, 2025 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements