FTAI Aviation Ltd. 10-Q

Item 1. Financial Statements FTAI AVIATION LTD. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share data) (Unaudited) Notes September 30, 2025 December 31, 2024 Assets Current Assets Cash and cash equivalents 2 $ 509,945 $ 115,116 Accounts receivable, net (1) 2 214,889 150,823 Inventory, net 2 897,216 551,156 Other current assets (2) 2 412,779 408,923 Total current assets 2,034,829 1,226,018 Leasing equipment, net 4 1,669,634 2,373,730 Property, plant, and equipment, net 2 113,951 107,451 Investments 5 164,346 19,048 Intangible assets, net 6 18,682 42,205 Goodwill 3 83,012 61,070 Other non-current assets 2 155,746 208,430 Total assets $ 4,240,200 $ 4,037,952 Liabilities Current Liabilities Accounts payable $ 147,350 $ 69,119 Accrued liabilities 128,936 96,910 Current maintenance deposits 2 14,650 62,552 Current security deposits 16,012 18,100 Other current liabilities 2 41,285 100,565 Total current liabilities 348,233 347,246 Long-term debt, net 7 3,446,733 3,440,478 Non-current maintenance deposits 2 49,982 44,179 Non-current security deposits 2 15,991 26,830 Other non-current liabilities 126,797 97,851 Total liabilities $ 3,987,736 $ 3,956,584 Commitments and contingencies 14 Equity Ordinary shares ($ 0.01 par value per share; 2,000,000,000 shares authorized; 102,572,000 and 102,550,975 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively) $ 1,026 $ 1,026 Preferred shares ($ 0.01 par value per share; 200,000,000 shares authorized; 6,800,000 and 11,740,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively) 68 117 Additional paid in capital ( 26,549 ) 153,328 Retained earnings (accumulated deficit) 277,919 ( 73,103 ) Shareholders' equity 252,464 81,368 Total liabilities and equity $ 4,240,200 $ 4,037,952 ______________________________________________________ (1) Includes accounts receivable from the 2025 Partnership of $ 50,856 and $ 0 as of September 30, 2025 and December 31, 2024, respectively. (2) Includes receivables from the 2025 Partnership of $ 17,585 and $ 0 as of September 30, 2025 and December 31, 2024, respectively. See accompanying notes to consolidated financial statements. 5 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (Dollars in thousands, except share and per share data) Three Months Ended September 30, Nine Months Ended September 30, Notes 2025 2024 2025 2024 Revenues Aerospace products revenue 2 $ 459,206 $ 303,469 $ 1,144,317 $ 737,726 MRE Contract revenue 2, 11 58,663 — 228,886 — Lease income 2 55,072 65,450 185,951 189,365 Maintenance revenue 2 52,370 59,917 175,081 156,894 Asset sales revenue 2 38,461 34,953 105,315 145,993 Other revenue (1) 3,292 2,005 5,831 6,104 Total revenues 12 667,064 465,794 1,845,381 1,236,082 Expenses Cost of sales 362,922 219,496 980,894 568,157 Operating expenses 2 39,092 26,858 105,858 81,274 General and administrative 1,829 4,045 7,387 10,697 Acquisition and transaction expenses 7,066 9,341 18,847 23,539 Management fees and incentive allocation to affiliate 11 — — — 8,449 Internalization fee to affiliate 15 — — — 300,000 Depreciation and amortization 4, 6 55,278 56,775 170,076 163,386 Asset impairment — — — 962 Total expenses 466,187 316,515 1,283,062 1,156,464 Other (expense) income Interest expense ( 60,784 ) ( 57,937 ) ( 186,789 ) ( 160,840 ) Loss on extinguishment of debt — — — ( 13,920 ) Equity in losses of unconsolidated entities (2) 5 ( 4,224 ) ( 438 ) ( 16,841 ) ( 1,799 ) Gain on sale to the 2025 Partnership 4,609 — 50,083 — Other income 3,570 2,909 63,797 3,045 Total other expense ( 56,829 ) ( 55,466 ) ( 89,750 ) ( 173,514 ) Income (loss) before income taxes 144,048 93,813 472,569 ( 93,896 ) Provision for (benefit from) income taxes 10 26,330 7,331 87,067 ( 130 ) Net income (loss) 117,718 86,482 385,502 ( 93,766 ) Less: Dividends on preferred shares 3,709 8,335 13,533 25,005 Less: Loss on redemption of preferred shares — — 6,327 — Net income (loss) attributable to shareholders $ 114,009 $ 78,147 $ 365,642 $ ( 118,771 ) Earnings (loss) per share: 13 Basic $ 1.11 $ 0.76 $ 3.57 $ ( 1.17 ) Diluted $ 1.10 $ 0.76 $ 3.52 $ ( 1.17 ) Weighted average shares outstanding: Basic 102,569,415 102,380,659 102,560,285 101,199,356 Diluted 103,966,650 103,395,348 103,951,713 101,199,356 ______________________________________________________ (1) Includes servicing fees of $ 3,035 and $ 5,635 for the three and nine months ended September 30, 2025, respectively, from the 2025 Partnership. (2) Includes the profit elimination of $( 3,908 ) and $( 15,793 ) for the three and nine months ended September 30, 2025, respectively, for sales to the 2025 Partnership. See accompanying notes to consolidated financial statements. 6 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) (Dollars in thousands) Three and Nine Months Ended September 30, 2025 Ordinary Shares Preferred Shares Additional Paid In Capital (Accumulated Deficit) Retained Earnings Total Equity Equity - December 31, 2024 $ 1,026 $ 117 $ 153,328 $ ( 73,103 ) $ 81,368 Net income 267,784 267,784 Total comprehensive income 267,784 267,784 Redemption of preferred shares ( 49 ) ( 117,791 ) ( 117,840 ) Loss on redemption of preferred shares ( 6,327 ) ( 6,327 ) Issuance of ordinary shares 913 913 Dividends declared - ordinary shares ( 61,534 ) ( 61,534 ) Dividends declared - preferred shares ( 9,824 ) ( 9,824 ) Equity-based compensation 10,404 10,404 Equity - June 30, 2025 $ 1,026 $ 68 $ ( 30,831 ) $ 194,681 $ 164,944 Net income 117,718 117,718 Total comprehensive income 117,718 117,718 Issuance of ordinary shares 124 124 Dividends declared - ordinary shares ( 30,771 ) ( 30,771 ) Dividends declared - preferred shares ( 3,709 ) ( 3,709 ) Equity-based compensation 5,655 5,655 Net settlement on vesting of equity awards ( 1,497 ) ( 1,497 ) Equity - September 30, 2025 $ 1,026 $ 68 $ ( 26,549 ) $ 277,919 $ 252,464 See accompanying notes to consolidated financial statements. 7 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) (Dollars in thousands) Three and Nine Months Ended September 30, 2024 Ordinary Shares Preferred Shares Additional Paid In Capital Accumulated Deficit Non-Controlling Interest in Equity of Consolidated Subsidiaries Total Equity Equity - December 31, 2023 $ 1,002 $ 159 $ 255,973 $ ( 81,785 ) $ 534 $ 175,883 Net loss ( 180,248 ) ( 180,248 ) Total comprehensive income ( 180,248 ) ( 180,248 ) Purchase of non-controlling interest $ ( 534 ) ( 534 ) Dividends declared - ordinary shares ( 60,148 ) ( 60,148 ) Dividends declared - preferred shares ( 16,670 ) ( 16,670 ) Issuance of ordinary shares 20 150,116 150,136 Equity-based compensation 1,148 1,148 Equity - June 30, 2024 $ 1,022 $ 159 $ 330,419 $ ( 262,033 ) $ — $ 69,567 Net income 86,482 86,482 Total comprehensive income 86,482 86,482 Dividends declared - ordinary shares ( 30,661 ) ( 30,661 ) Dividends declared - preferred shares ( 8,335 ) ( 8,335 ) Issuance of ordinary shares 3 46 49 Equity-based compensation 1,430 1,430 Equity - September 30, 2024 $ 1,025 $ 159 $ 292,899 $ ( 175,551 ) $ — $ 118,532 See accompanying notes to consolidated financial statements. 8 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income (loss) $ 385,502 $ ( 93,766 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Equity in losses of unconsolidated entities (1) 16,841 1,799 Gain on sale of assets ( 294,761 ) ( 244,353 ) Gain on sale of assets to the 2025 Partnership ( 50,083 ) — Gain on insurance recoveries ( 54,325 ) — Security deposits and maintenance claims included in earnings ( 24,919 ) ( 13,437 ) Loss on extinguishment of debt — 13,920 Equity-based compensation 16,059 2,578 Non-cash termination fee to affiliate — 150,000 Depreciation and amortization 170,076 163,386 Asset impairment — 962 Deferred income taxes 77,559 ( 2,470 ) Change in fair value of guarantees 2,460 1,340 Amortization of lease intangibles and incentives 31,843 30,998 Amortization of deferred financing costs 8,772 7,996 Provision for credit losses 276 2,784 Other 710 ( 158 ) Change in: Accounts receivable ( 38,968 ) ( 31,234 ) Inventory ( 391,908 ) ( 163,900 ) Other assets ( 64,011 ) ( 16,769 ) Accounts payable and accrued liabilities 100,739 50,630 Management fees payable to affiliate ( 960 ) ( 3,967 ) Other liabilities ( 22,568 ) ( 2,492 ) Net cash used in operating activities ( 131,666 ) ( 146,153 ) Cash flows from investing activities: Investment in unconsolidated entities ( 188,698 ) — Return of capital from unconsolidated entities 27,113 — Principal collections on finance leases 1,580 1,872 Principal collections on notes receivable 4,328 3,874 Acquisition of business, net of cash acquired ( 37,133 ) ( 143,634 ) Acquisition of leasing equipment ( 489,781 ) ( 622,366 ) Investments in financing receivables ( 2,764 ) ( 63,857 ) Acquisition of property, plant and equipment ( 17,511 ) ( 2,968 ) Acquisition of lease intangibles 2,757 1,174 Deposits for acquisition of leasing equipment (2) ( 58,646 ) ( 162,708 ) Proceeds from sale of assets 890,434 542,938 Proceeds from sale of assets to the 2025 Partnership 485,108 — Proceeds from settlement of insurance claims 54,325 — Proceeds from deposits on sale of leasing equipment 6,405 2,414 Return of deposits for acquisition of leasing equipment (2) 45,151 530 Net cash provided by (used in) investing activities $ 722,668 $ ( 442,731 ) See accompanying notes to consolidated financial statements. 9 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from financing activities: Proceeds from debt $ 430,000 $ 2,069,250 Repayment of debt ( 430,000 ) ( 1,367,304 ) Payment of deferred financing costs ( 524 ) ( 10,825 ) Receipt of security deposits under operating lease agreements 4,490 6,120 Return of security deposits under operating lease agreements ( 3,469 ) — Receipt of maintenance deposits under operating lease agreements 40,284 35,583 Release of maintenance deposits under operating lease agreements ( 5,452 ) ( 6,460 ) Capital contributions from non-controlling interests — ( 534 ) Settlement of equity-based compensation ( 1,497 ) — Redemption of preferred shares ( 124,167 ) — Cash dividends - ordinary shares ( 92,305 ) ( 90,809 ) Cash dividends - preferred shares ( 13,533 ) ( 25,005 ) Net cash (used in) provided by financing activities $ ( 196,173 ) $ 610,016 Net increase in cash and cash equivalents and restricted cash 394,829 21,132 Cash and cash equivalents and restricted cash, beginning of period 115,266 90,906 Cash and cash equivalents and restricted cash, end of period $ 510,095 $ 112,038 Supplemental disclosure of non-cash investing and financing activities (see Note 2 for additional non-cash information): Receipt of notes receivable in connection with the sale of leasing equipment $ 32,996 $ 69,826 Acquisition of leasing equipment in accrued liabilities ( 22,634 ) ( 11,772 ) Receipt of leasing equipment in settlement of accounts receivable ( 5,118 ) — Purchase deposits reclassified to leasing equipment from other assets upon acquisition ( 52,817 ) ( 19,608 ) Decrease in leasing equipment for engines provided to aircraft lessees in lieu of cash reimbursements of maintenance deposits 2,199 — Accounts receivable settled with security deposits ( 2,110 ) ( 4,365 ) Accounts receivable settled with maintenance deposits ( 23,883 ) ( 38,795 ) ______________________________________________________ (1) Includes the profit elimination of $( 15,793 ) for the nine months ended September 30, 2025, 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 for the nine months ended September 30, 2025, and return of deposits for the acquisition of leasing equipment reimbursed from the 2025 Partnership of $ 42,813 for the nine months ended September 30, 2025. See accompanying notes to consolidated financial statements. 10 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 1. ORGANIZATION This report on Form 10-Q should be read in conjunction with the FTAI Aviation Ltd.(“FTAI”, “FTAI Aviation” or “the Company”) Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Form 10-K”). FTAI Aviation is a Cayman Islands exempted company, which through its subsidiaries, is a leading full-service provider for CFM56-5B, CFM56-7B and V2500 aircraft engines, which power the majority of the world’s fleet of narrowbody aircraft. The Company owns and leases aircraft and engines to airlines and asset owners globally. Additionally, the Company repairs and sells refurbished engines and aftermarket components of engines as well as develops and manufactures Parts Manufacturer Approval (“PMA”) parts through a joint venture. The Company has two reportable segments, (i) Aviation Leasing and (ii) Aerospace Products (see Note 12). The Company conducts engine maintenance at its 100% owned facilities in Montréal, Miami, and Orange, as well as through its 50 % equity ownership in QuickTurn Europe, located in Rome. Collectively, these facilities span over 950,000 square feet and are equipped with advanced tooling, engine test cells, and engineering capabilities to support a wide range of component repairs and service requirements. In addition, the Company also supports global operations through exclusive arrangements and strategic partnerships at key locations worldwide. The Company’s principal corporate location is in New York City, and has a global presence through offices in Cardiff, Dubai, Dublin and Singapore, in addition to Montréal, Miami, Orange and Rome. The majority of FTAI’s target customers are small and medium sized airlines which have narrowbody fleets powered by CFM56-5B, CFM56-7B and V2500 engines. There are hundreds of these operators worldwide, which creates a large addressable market in which FTAI focuses and can provide significant value versus competitors. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting — The accompanying consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its subsidiaries. Principles of Consolidation — The Company consolidates all entities in which it has a controlling financial interest and control over significant operating decisions. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The ownership interest of other investors in the Company’s consolidated subsidiaries is recorded as non-controlling interest. The Company uses the equity method of accounting for investments in entities in which it exercises significant influence but does not meet the requirements for consolidation. Under the equity method, the Company records its proportionate share of the underlying net income (loss) of these entities. Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications — Certain amounts from prior periods in the Company’s consolidated financial statements have been reclassified to align with the presentation in the current period. Risks and Uncertainties — In the normal course of business, the Company encounters several significant types of economic risk including credit, market, and capital market risks. Credit risk is the risk of the inability or unwillingness of a lessee or customer to make contractually required payments or to fulfill its other contractual obligations. Market risk reflects the risk of a downturn or volatility in the underlying industry segments in which the Company operates, which could adversely impact the pricing of the services offered by the Company or a lessee’s or customer’s ability to make payments, increase the risk of unscheduled lease terminations and depress lease rates and the value of the Company’s leasing equipment or operating assets. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of its business or to refinance existing debt facilities. The Company, through our subsidiaries, also conducts operations outside of the United States; such international operations are subject to the same risks as those associated with the Company’s United States operations as well as additional risks, including unexpected changes in regulatory requirements, heightened risk of political and economic instability, potentially adverse tax consequences and the burden of complying with foreign laws. The Company does not have significant exposure to foreign currency risk as all of its leasing arrangements are denominated in U.S. dollars. Cash and Cash Equivalents — The Company considers all highly liquid short-term investments with a maturity of 90 days or less when purchased to be cash equivalents. Inventory, net — The Company holds aircraft engines, engine modules, spare parts and used material inventory for sale. At times, inventory is transferred to leasing equipment in connection with a rebuilt engine or engine repair. Inventory is carried at the lower of cost or net realizable value on the Company’s Consolidated Balance Sheets. 11 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Revenues — Revenues are within the scope of ASC 842, Leases, and ASC 606, Revenue from contracts with customers . The Company has elected to exclude sales tax and other similar taxes from revenues. Operating Leases — The Company leases equipment pursuant to operating leases. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the lease, assuming no renewals. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the lessee is placed on non-accrual status and revenue is recognized when cash payments are received. Generally, under the Company’s aircraft lease and engine agreements, the lessee is required to make periodic maintenance payments calculated based on the lessee’s utilization of the leased asset or at the end of the lease. Typically, under the Company’s aircraft lease agreements, the lessee is responsible for maintenance, repairs and other operating expenses throughout the term of the lease. These periodic maintenance payments accumulate over the term of the lease to fund major maintenance events, and the Company is contractually obligated to return maintenance payments to the lessee up to the cost of maintenance events paid by the lessee. In the event the total cost of maintenance events over the term of a lease is less than the cumulative maintenance payments, the Company is not required to return any unused maintenance payments to the lessee. Maintenance payments received for which the Company expects to repay to the lessee are presented as current and non-current Maintenance deposits in its Consolidated Balance Sheets. All excess maintenance payments received that the Company does not expect to repay to the lessee are recorded as Maintenance revenue on its Consolidated Statements of Operations. Estimates in recognizing revenue include mean time between removal, projected costs for engine maintenance and forecasted utilization of aircraft which are affected by historical usage patterns and overall industry, market and economic conditions. Significant changes to these estimates could have a material effect on the amount of revenue recognized in the period. Finance Leases — From time to time the Company enters into finance lease arrangements that include a lessee obligation to purchase the leased equipment at the end of the lease term, a bargain purchase option, or provides for minimum lease payments with a present value that equals or exceeds substantially all of the fair value of the leased equipment at the date of lease inception. Net investment in finance leases represents the minimum lease payments due from lessee, net of unearned income. The lease payments are segregated into principal and interest components similar to a loan. Unearned income is recognized on an effective interest method over the lease term and is recorded as lease income. The principal component of the lease payment is reflected as a reduction to the net investment in finance leases. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the lessee is placed on non-accrual status and revenue is recognized when cash payments are received. Asset sales revenue — Asset sales revenue primarily consists of the transaction price related to the sale of aircraft and aircraft engines from the Company’s Aviation Leasing segment. From time to time, the Company may also assign the related lease agreements to the customer as part of the sale of these assets. The Company routinely sells leasing equipment to customers, and such transactions are considered recurring and ordinary in nature to its business. As such, these sales are accounted for within the scope of ASC 606. Revenue is recognized when a performance obligation is satisfied by transferring control of an asset to the customer, along with corresponding costs of sales. Aerospace products revenue — Aerospace products revenue primarily consists of the transaction price related to the sale of CFM56-5B, CFM56-7B and V2500 engines, engine modules, spare parts and used material inventory, and are accounted for within the scope of ASC 606. Revenue is recognized gross when a performance obligation is satisfied by transferring control over the related asset to a customer along with corresponding costs of sales. Aerospace products revenue also consists of engine management service contracts, where the Company has a stand-ready obligation to provide replacement CFM56-5B and CFM56-7B engines to customers as they become unserviceable during the contract term. The Company recognizes revenue over time using a straight-line attribution method and the costs related to fulfilling the performance obligation are expensed as incurred. Maintenance, Repair and Exchange (“MRE”) Contract revenue — MRE Contract revenue consists of the transaction price related to the sale of CFM56-5B, CFM56-7B and V2500 commercial aircraft engines and related modules to, and subsequent exchange of unserviceable engines and modules from, the special purpose entities (the “SPVs”) of the first partnership of the strategic capital initiative (the “2025 Partnership”). MRE Contract revenue is recognized under ASC 606 when a performance obligation is satisfied by transferring control of the serviceable engine or module to the 2025 Partnership, along with corresponding costs of sales. Refer to Note 11 “Affiliate Transactions and Former Management Agreement” for additional information on the 2025 Partnership and the strategic capital initiative. Other Income — The 2025 Partnership committed to acquire 45 on-lease narrowbody aircraft from the Company (the “Seed Assets”) and has signed an agreement through which the Company’s MRE business will provide replacement aircraft engines and modules for the life of the 2025 Partnership. During the three and nine months ended September 30, 2025, 8 and 45 of the aircraft were sold for a gain of $ 4.6 million and $ 50.1 million, respectively, which was recognized within gain on sale to the 2025 Partnership. The aircraft sales 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. 12 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) During the three and nine months ended September 30, 2025, the Company received $ 0.0 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 — The Company is subject to concentrations of credit risk with respect to amounts due from customers and lessees. The Company attempts to limit its credit risk by performing ongoing credit evaluations. The Company earned 16 % and 11 % of its revenue from two customers in the Aerospace Products segment during the three months ended September 30, 2025. The Company earned 12 % of its revenue from one customer in the Aerospace Products segment during the nine months ended September 30, 2025. No single customer accounted for greater than 10% of total revenue during the three and nine months ended September 30, 2024. As of September 30, 2025, there were two customers in the Aerospace Products segment that represented 25 % and 11 % of total accounts receivable, net. As of December 31, 2024, no single customer accounted for greater than 10% of total accounts receivable, net. The Company maintains cash and restricted cash balances, which generally exceed federally insured limits, and subject the Company to credit risk, in high credit quality financial institutions. The Company monitors the financial condition of these institutions and has not experienced any losses associated with these accounts. Allowance for Doubtful Accounts — The Company determines the allowance for doubtful accounts based on its assessment of the collectability of its leasing receivables, notes receivables and inventory sales. In assessing the allowance, the Company considers past collection history and specific risks identified among uncollected accounts. The assessment of collectability of its leasing receivables, notes receivables and inventory sales is done on a customer-by-customer basis. The allowance for doubtful accounts was $ 28.4 million and $ 74.9 million as of September 30, 2025 and December 31, 2024, respectively . There was a provision for credit losses of $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2025, respectively, and $ 2.7 million and $ 2.8 million for the three and nine months ended September 30, 2024, respectively. The provision for credit losses is included in the Company's operating expenses. Receivables are written off after all reasonable means to collect the full amount have been exhausted. For the three and nine months ended September 30, 2025, the Company recorded write-offs and recoveries, net, of its allowance for doubtful accounts of $ 0.1 million and $ 46.8 million, respectively. Other Current Assets — Other current assets are summarized as follows: September 30, 2025 (unaudited) December 31, 2024 Notes receivable $ 269,360 $ 165,338 Financing receivable resulting from failed sale-leaseback transactions 36,008 32,486 Prepaid expenses including prepayments for maintenance that has not yet been incurred 40,353 87,323 Purchase deposits 13,471 83,229 Maintenance right assets 18,716 — Tax assets 7,506 31,622 Contract asset from the 2025 Partnership 17,585 — Other 9,780 8,925 Other current assets $ 412,779 $ 408,923 Other Non-Current Assets — Other non-current assets are summarized as follows: September 30, 2025 (unaudited) December 31, 2024 Lease incentives $ 47,320 $ 56,812 Deferred tax assets 27,225 42,893 Operating lease assets 30,906 28,729 Financing receivable resulting from failed sale-leaseback transactions 22,728 28,412 Maintenance right assets 4,624 25,907 Engine management contract assets 10,292 7,162 Other 12,651 18,515 Other non-current assets $ 155,746 $ 208,430 13 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Other Current Liabilities — Other current liabilities are summarized as follows: September 30, 2025 (unaudited) December 31, 2024 Deposits on sales of leasing equipment 37,551 $ 87,296 Other 3,734 13,269 Other current liabilities $ 41,285 $ 100,565 Dividends — Dividends are recorded if and when declared by the Board of Directors. For the three and nine months ended September 30, 2025, the Board of Directors declared cash dividends of $ 0.35 and $ 0.95 per ordinary share, respectively. For the three and nine months ended September 30, 2024, the Board of Directors declared cash dividends of $ 0.30 and $ 0.90 per ordinary share, respectively. Additionally, in the three months ended September 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. The purchase of the original engine was reported as an outflow in net cash used in investing activities at the time of purchase through the acquisition of leasing equipment line item. As part of the aerospace products business, the Company breaks down generally unserviceable engines with the intent to manufacture modules and parts for creation and sale of new assets. 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 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 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 an outflow 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 an outflow in net cash (used in) provided by operating activities. The cash and noncash related activities described above during the nine months ended September 30, 2025 and 2024 are detailed below (unaudited): Nine Months Ended September 30, (in thousands) 2025 2024 Cost of modules and parts sold sourced from engines originally within leasing equipment $ 22,429 $ 33,663 Transfers of engines from leasing equipment to inventory for manufacturing and sale 219,732 143,678 Transfers of inventory to leasing equipment for rebuilding and sale of engines ( 228,691 ) ( 159,876 ) Total outflows related to manufacturing modules and parts - included in net cash used in operating activities ( 478,642 ) ( 270,679 ) Cash received for assets sold sourced from leasing equipment - inflow included in net cash used in operating activities 54,853 56,670 Cash received for sales of leasing equipment that include components sourced from inventory - inflow included in net cash provided by investing activities 635,865 276,699 Cash paid for engine and aircraft inventory - outflow included in net cash used in operating activities ( 127,260 ) — 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. The adoption of ASU 2023-05 did not have a material impact on the Company’s consolidated financial statements. 14 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient in developing reasonable and supportable forecasts as apart of estimating expected credit losses, allowing entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in ASU 2025-05 are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of this update 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, the Company continues 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. The Company is currently evaluating the impact these standards may have on its consolidated financial statements and related disclosures. 3. ACQUISITION OF LOCKHEED MARTIN COMMERCIAL ENGINE SOLUTIONS On September 9, 2024, the Company, through its subsidiary FTAIC Aviation Inc. (“FTAIC”) created on April 25, 2024, acquired certain assets and assumed certain liabilities of Lockheed Martin Commercial Engine Solutions (“LMCES”) from Lockheed Martin Canada for total consideration of $ 170.0 million. LMCES is a 526,000-square-foot aircraft engine maintenance repair facility located in Montréal, Quebec. The Company acquired LMCES to further enhance its MRE business and establish permanent engine and module manufacturing capabilities in Canada. The facility operates within its Aerospace Products segment, providing extensive engine and piece-part repair capabilities for the CFM56-5B and CFM56-7B engines. 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. 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. Subsequent to the acquisition, in the nine months ended September 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 Fair value of assets acquired: Current Assets Accounts receivable $ 10,758 Inventory 25,498 Other current assets 6,795 Total current assets 43,051 Property, plant, and equipment 72,151 Leasing equipment 5,675 Other non-current assets 10,633 Total assets 131,510 Fair value of liabilities assumed: Current Liabilities Accounts payable 7,669 Accrued liabilities 1,692 Other current liabilities 5,130 Total current liabilities 14,491 Other non-current liabilities 14,347 Total liabilities 28,838 Goodwill (1) 71,040 Net assets acquired (2) $ 173,712 ________________________________________________________ (1) Goodwill is primarily attributable to the assembled workforce of FTAIC and the synergies expected to be achieved. This goodwill is assigned to the Aerospace Products segment and is deductible for income tax purposes. (2) Total consideration is calculated as cash paid, adjusted for the settlement of pre-existing relationships. 15 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 Buildings and improvements 25 $ 40,953 Machinery and equipment 2 - 21 30,397 Other N/A 801 Total $ 72,151 The unaudited financial information in the table below summarizes the combined results of operations of FTAI and LMCES on a pro forma basis. These pro forma results were based on estimates and assumptions which the Company believes are reasonable. The pro forma adjustments are primarily comprised of the following: • The allocation of the purchase price and related adjustments, including adjustments to depreciation and amortization expense related to the fair value of property, plant and equipment; • Associated tax-related impacts of adjustments. 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 Nine Months Ended September 30, 2024 September 30, 2024 Total revenue $ 479,277 $ 1,283,520 Net income attributable to shareholders $ 83,727 $ ( 122,542 ) 4. LEASING EQUIPMENT, NET Leasing equipment, net is summarized as follows: September 30, 2025 (unaudited) December 31, 2024 Leasing equipment $ 2,169,514 $ 2,963,452 Less: Accumulated depreciation ( 499,880 ) ( 589,722 ) Leasing equipment, net $ 1,669,634 $ 2,373,730 The Company identified certain assets in its leasing equipment portfolio with indicators of impairment. During the three and nine months ended September 30, 2025, the Company did not record any transactional impairment charges. In comparison, for the three and nine months ended September 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Depreciation expense for leasing equipment $ 51,050 $ 55,376 158,185 159,936 16 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 5. INVESTMENTS The following table presents the ownership interests and carrying values of the Company’s investments: Carrying Value Investment Ownership Percentage September 30, 2025 (unaudited) December 31, 2024 Advanced Engine Repair JV Equity method 25 % $ 20,623 $ 19,048 2025 Partnership Equity method 20 % 133,171 — QuickTurn Europe Equity method 50 % 10,552 — $ 164,346 $ 19,048 The Company did not recognize any other-than-temporary impairments for the three and nine months ended September 30, 2025 and 2024. The following table presents the Company’s proportionate share of equity in (losses) earnings (unaudited): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Advanced Engine Repair JV $ 668 $ ( 438 ) $ 1,576 $ ( 1,592 ) 2025 Partnership (1) ( 4,992 ) — ( 18,436 ) — Falcon MSN 177 LLC (2) — — — ( 207 ) QuickTurn Europe 100 — 19 — Total $ ( 4,224 ) $ ( 438 ) $ ( 16,841 ) $ ( 1,799 ) ______________________________________________________ (1) Includes the profit elimination of $( 3,908 ) and $( 15,793 ) for the three and nine months ended September 30, 2025, respectively, for sales to the 2025 Partnership. (2) On May 3, 2024, the Company purchased the remaining interest of Falcon MSN 177 LLC (“Falcon”). As a result, Falcon became a consolidated subsidiary, and is no longer accounted for as an equity method investment. Equity Method Investments Advanced Engine Repair JV In December 2016, the Company invested $ 15.0 million for a 25 % interest in an advanced engine repair joint venture. This joint venture is focused on developing new cost savings programs for engine repairs. In August 2019, the Company expanded the scope of our joint venture and invested an additional $ 13.5 million and maintained a 25 % interest. The Company exercises significant influence over this investment and accounts for this investment as an equity method investment. Falcon MSN 177 LLC Since November 2021, the Company owned a 50 % interest in Falcon MSN 177 LLC (“Falcon”), an entity that consists of one Dassault Falcon 2000 aircraft. Falcon leases the aircraft to charter operators on aircraft, crew maintenance, and insurance contracts. The Company accounted for its investment in Falcon as an equity method investment as it had significant influence through its interest. On May 3, 2024, the Company purchased the remaining interest from S7 Aerospace for total cash consideration of $ 0.8 million and it is now a consolidated subsidiary. 2025 Partnership In the nine months ended September 30, 2025, the Company invested $ 151.6 million in the 2025 Partnership, an investment focused on acquiring 737NG and A320ceo on-lease narrowbody aircraft, for which the Company is the Servicer and holds a 20 % limited partner ownership. The Company exercises significant influence over this investment and accounts for it using the equity method. As the Servicer, The Company is responsible for lessee invoicing and collections, airline relationship management, contracts management including lease extension and aircraft deliveries and redeliveries. 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 Servicer to the 2025 Partnership. 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. 17 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) QuickTurn Europe On June 5, 2025, the Company 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 the Company’s global engine maintenance capabilities and meet increasing demand for MRE services. The Company accounts for its investment in QuickTurn Europe as an equity method investment as it has significant influence through its interest. 6. INTANGIBLE ASSETS AND LIABILITIES, NET Intangible assets and liabilities, net are summarized as follows: September 30, 2025 (unaudited) December 31, 2024 Intangible assets Acquired favorable lease intangibles $ 20,184 $ 70,375 Less: Accumulated amortization ( 10,710 ) ( 29,664 ) Acquired favorable lease intangibles, net 9,474 40,711 Acquired customer relationships 9,907 1,907 Less: Accumulated amortization ( 699 ) ( 413 ) Acquired customer relationships, net 9,208 1,494 Total intangible assets, net $ 18,682 $ 42,205 Intangible liabilities Acquired unfavorable lease intangibles $ 9,911 $ 13,767 Less: Accumulated amortization ( 2,062 ) ( 1,259 ) Acquired unfavorable lease intangibles, net $ 7,849 $ 12,508 The weighted average amortization period of intangible assets acquired during the nine months ended September 30, 2025 is as follows: Weighted Average Amortization Period Lease intangibles 3.5 years Customer relationships 12.3 years Total intangible assets 8.0 years Intangible liabilities relate to unfavorable lease intangibles and are included as a component of other non-current liabilities. Amortization of intangible assets and liabilities is recorded as follows (unaudited): Classification in Consolidated Statements of Operations Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Lease intangibles Lease income $ 534 $ 3,720 $ 5,893 $ 11,482 Customer relationships Depreciation and amortization 95 95 314 307 Total $ 629 3,815 $ 6,207 11,789 18 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) As of September 30, 2025, estimated net annual amortization of intangibles is as follows (unaudited): Remainder of 2025 $ 1,026 2026 1,568 2027 1,081 2028 1,645 2029 683 Thereafter 4,830 Total $ 10,833 7. DEBT, NET The Company’s debt, net is summarized as follows: September 30, 2025 (unaudited) December 31, 2024 Outstanding Borrowings Stated Interest Rate Maturity Date Outstanding Borrowings Loans payable Revolving Credit Facility (1) $ — (i) Base Rate + 1.75 %; or (ii) Adjusted Term SOFR Rate + 2.75 % 5/22/27 $ — Total loans payable — — Bonds payable Senior Notes due 2028 (2) 1,001,094 5.50 % 5/1/28 1,001,382 Senior Notes due 2030 (3) 497,367 7.88 % 12/1/30 497,071 Senior Notes due 2031 700,000 7.00 % 5/1/31 700,000 Senior Notes due 2032 800,000 7.00 % 6/15/32 800,000 Senior Notes due 2033 (4) 497,724 5.88 % 4/15/33 497,551 Total bonds payable 3,496,185 3,496,004 Debt 3,496,185 3,496,004 Less: Debt issuance costs ( 49,452 ) ( 55,526 ) Total debt, net $ 3,446,733 $ 3,440,478 Total debt due within one year $ — $ — ________________________________________________________ (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 $ 1,094 and $ 1,382 at September 30, 2025 and December 31, 2024, respectively. (3) Includes an unamortized discount of $ 2,633 and $ 2,929 at September 30, 2025 and December 31, 2024, respectively. (4) Includes an unamortized discount of $ 2,276 and $ 2,449 at September 30, 2025 and December 31, 2024, respectively. We were in compliance with all debt covenants as of September 30, 2025. 8. FAIR VALUE MEASUREMENTS Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows: • Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs. • Level 3: Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants price the asset or liability. 19 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) The valuation techniques that may be used to measure fair value are as follows: • Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. • Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts. • Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). The Company’s cash and cash equivalents and restricted cash consist largely of demand deposit accounts with maturities of 90 days or less when purchased that are considered to be highly liquid. These instruments are valued using inputs observable in active markets for identical instruments and are therefore classified as Level 1 within the fair value hierarchy. Except as discussed below, the Company’s financial instruments other than cash and cash equivalents and restricted cash consist principally of accounts receivable, notes receivable, accounts payable and accrued liabilities, security deposits, maintenance deposits and management fees payable, whose fair values approximate their carrying values based on an evaluation of pricing data, vendor quotes, and historical trading activity or due to their short maturity profiles. The fair values of the Company’s bonds payable are presented in the table below and classified as Level 2 within the fair value hierarchy: September 30, 2025 (unaudited) December 31, 2024 Senior Notes due 2028 $ 1,001,570 $ 980,140 Senior Notes due 2030 532,765 526,380 Senior Notes due 2031 733,474 713,923 Senior Notes due 2032 838,352 816,904 Senior Notes due 2033 503,560 483,100 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 $ 11.4 million and $ 8.9 million as of September 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. During the three and nine months ended September 30, 2025, the Company recorded increases related to the change in fair value of $ 0.4 million and $ 2.5 million, respectively, which are recorded in Asset sales revenue. During the three and nine months ended September 30, 2024, the Company recorded increases related to the change in fair value of $ 0.3 million and $ 1.3 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 7 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at September 30, 2025 was $ 43.0 million, which is not reasonably expected. The Company measures the fair value of certain assets on a non-recurring basis when U.S. GAAP requires the application of fair value, including events or changes in circumstances that indicate that the carrying amounts of assets may not be recoverable. Assets subject to these measurements include intangible assets, property, plant and equipment and leasing equipment. The Company records 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 the Company’s assumptions as to future cash flows from operation of the l easing and sale of assets. 9. EQUITY-BASED COMPENSATION The Company has 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 the Company, each as determined by the Compensation Committee of the Board of Directors. As of September 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. Unvested equity-based awards are subject to forfeiture. The Company’s accounting policy is to record the impact of forfeitures when they occur. 20 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Equity-based compensation for each type of award was as follows (unaudited): Three Months Ended September 30, Nine Months Ended September 30, Remaining Expense To Be Recognized, If All Vesting Conditions Are Met Weighted Average Remaining Contractual Term (in years) 2025 2024 2025 2024 Stock Options $ 127 $ 128 $ 381 $ 170 $ 1,397 7.9 years Performance shares 3,502 — 10,265 — 40,260 3.1 years Restricted Shares 2,026 1,302 5,413 2,408 15,747 1.9 years Total $ 5,655 $ 1,430 $ 16,059 $ 2,578 $ 57,404 Options In 2025, the Company did not issue any options to employees. During the nine months ended September 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 nine months ended September 30, 2025, the Company 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 nine months ended September 30, 2025, the Company 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, the Company 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 nine months ended September 30, 2024, the Company issued the following restricted shares of the Company to select employees and officers of the Company: In May 2024, the Company issued restricted shares to (i) select officers with a grant date fair value of $ 5.5 million, vesting over 3.0 years and (ii) select employees with a grant date fair value of $ 5.7 million, vesting over 4.0 years. In September 2024, the Company issued restricted shares to select employees and officers with a grant date fair value of $ 0.8 million, vesting over 3.0 years. 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 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. 21 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 10. INCOME TAXES The current and deferred components of the provision for income taxes are as follows (unaudited): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Current: Cayman Islands $ — $ — $ — $ — Bermuda — — — — United States: Federal ( 7,859 ) ( 296 ) — 888 State and local 1,518 ( 72 ) 3,063 217 Other Non-U.S. including Pillar Two top-up tax 2,911 446 6,445 1,235 Total current provision (benefit) ( 3,430 ) 78 9,508 2,340 Deferred: Cayman Islands — — — — Bermuda 8,053 4,738 18,689 ( 3,088 ) United States: Federal 7,092 1,422 12,524 2,733 State and local ( 1,496 ) 317 950 584 Other Non-U.S. 16,111 776 45,396 ( 2,699 ) Total deferred provision (benefit) 29,760 7,253 77,559 ( 2,470 ) Total provision for (benefit from) income taxes $ 26,330 $ 7,331 $ 87,067 $ ( 130 ) The Company is an exempted entity domiciled in the Cayman Islands where income taxes are not imposed. The Company has previously been classified as a “passive foreign investment company” for U.S. income tax purposes, resulting in income tax obligations for certain of its shareholders. Taxable income or loss generated by the Company’s corporate subsidiaries is subject to U.S. federal, state and foreign corporate income tax in locations where they conduct business. The Company’s effective tax rate differs from the Cayman Islands statutory rate of 0% primarily due to a significant portion of the Company’s income being subject to tax in jurisdictions where it operates. As of and for the nine months ended September 30, 2025, the Company had not established a liability for uncertain tax positions as no such positions existed. In general, the Company’s tax returns and the tax returns of its corporate subsidiaries are subject to U.S. federal, state, local and foreign income tax examinations by tax authorities. Generally, the Company is not subject to examination by taxing authorities for tax years prior to 2021. The Company does 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. 11. AFFILIATE TRANSACTIONS AND FORMER MANAGEMENT AGREEMENT Strategic Capital Initiative – 2025 Partnership On December 30, 2024, the Company announced the launch of its Strategic Capital Initiative in collaboration with third-party institutional investors. 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 the SPVs of the 2025 Partnership would 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 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 nine months ended September 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 September 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 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 22 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Company is contractual and customary market-based compensation for fulfilling such performance obligations. During the three and nine months ended September 30, 2025, the Company recorded $ 58.7 million and $ 228.9 million of MRE Contract revenue, respectively, for the sale and purchase of such engines to and from the 2025 Partnership. Former Management Agreement On May 28, 2024, the Company entered into definitive agreements with the Former Manager and Master GP to internalize the Company’s management function. As part of the termination of the Management Agreement, the Company (i) paid 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. Following the Internalization, the Company no longer pays management fees or incentive distributions to the Former Manager and Master GP. In connection with the termination of the Management Agreement, the Company also entered into a Transition Services Agreement with the Former Manager. 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. 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 through 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 %). Prior to the Internalization, the Former Manager was paid annual fees in exchange for advising the Company on various aspects of its business, formulating its investment strategies, arranging for the acquisition and disposition of assets, arranging for financing, monitoring performance, and managing its day-to-day operations, inclusive of all costs incidental thereto. In addition, the Former Manager was reimbursed for various expenses incurred by the Former Manager on the Company’s behalf, including the costs of legal, accounting and other administrative activities. Additionally, the Company entered into certain incentive allocation arrangements with Master GP, which owned approximately 0.01 % of FTAI Aviation Holdco Ltd. (a wholly owned subsidiary of the Company). The Former Manager was entitled to a management fee and reimbursement of certain expenses. The management fee was determined by taking the average value of total equity (excluding non-controlling interests) determined on a consolidated basis in accordance with U.S. 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. 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). The income incentive allocation was calculated and distributable quarterly in arrears based on the pre-incentive allocation net income for the immediately preceding calendar quarter (the “Income Incentive Allocation”). For this purpose, pre-incentive allocation net income means, with respect to a calendar quarter, net income attributable to shareholders during such quarter calculated in accordance with U.S. GAAP excluding the Company’s pro rata share of (1) realized or unrealized gains and losses, and (2) certain non-cash or one-time items, and (3) any other adjustments as may be approved by the Company’s independent directors. Pre-incentive allocation net income did not include any Income Incentive Allocation or Capital Gains Incentive Allocation (described below) paid to Master GP during the relevant quarter. Prior to the Internalization, one of our subsidiaries allocated and distributed to Master GP an Income Incentive Allocation with respect to its pre-incentive allocation net income in each calendar quarter as follows: (1) no Income Incentive Allocation in any calendar quarter in which pre-incentive allocation net income, expressed as a rate of return on the average value of our net equity capital (excluding non-controlling interests) at the end of the two most recently completed calendar quarters, does not exceed 2 % for such quarter ( 8 % annualized); (2) 100 % of pre-incentive allocation net income with respect to that portion of such pre-incentive allocation net income, if any, that is equal to or exceeds 2 % but does not exceed 2.2223 % for such quarter; and (3) 10 % of the amount of pre-incentive allocation net income, if any, that exceeds 2.2223 % for such quarter. These calculations were prorated for any period of less than three months. 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 the Company’s pro rata share of cumulative realized gains from the date of the IPO through the end of the applicable calendar year, net of the Company’s 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. 23 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 September 30, 2024 Nine Months Ended September 30, 2024 Management fees $ — $ 993 Income incentive allocation — 7,456 Total $ — $ 8,449 The Company paid all of its operating expenses, except those specifically required to be borne by the Former Manager under the Management Agreement. The expenses required to be paid by the Company included, but were not limited to, issuance and transaction costs incident to the acquisition, disposition and financing of its assets, legal and auditing fees and expenses, the compensation and expenses of its independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of the Company (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of the Company, costs and expenses incurred in contracting with third parties (including affiliates of the Former Manager), the costs of printing and mailing proxies and reports to its shareholders, costs incurred by the Former Manager or its affiliates for travel on the Company’s behalf, costs associated with any computer software or hardware that was used by the Company, costs to obtain liability insurance to indemnify the Company’s directors and officers and the compensation and expenses of the Company’s transfer agent. The Company paid or reimbursed the Former Manager and its affiliates for performing certain legal, accounting, due diligence tasks and other services that outside professionals or outside consultants otherwise would perform, provided that such costs and reimbursements were no greater than those which would be paid to outside professionals or consultants. The Former Manager was responsible for all of its other costs incident to the performance of its duties under the Management Agreement, including compensation of the Former Manager’s employees, rent for facilities and other “overhead” expenses; the Company did not reimburse the Former Manager for these expenses. The following table summarizes the Company’s reimbursements to the Former Manager (unaudited): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Classification in the Consolidated Statements of Operations: General and administrative $ ( 82 ) $ 2,557 $ 247 $ 6,115 Acquisition and transaction expenses ( 53 ) 967 122 1,654 Total $ ( 135 ) $ 3,524 $ 369 $ 7,769 Upon the successful completion of an offering of the Company’s ordinary shares or other equity securities (including securities issued as consideration in an acquisition), the Company 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 the Company’s 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 the Company’s ordinary shares). Any ultimate purchaser of ordinary shares for which such options are granted may have been an affiliate of the Former Manager. 12. SEGMENT INFORMATION The key factors used to identify the reportable segments are the organization and alignment of the Company’s internal operations and the nature of its products and services. The Company’s two reportable segments are (i) Aviation Leasing and (ii) Aerospace Products. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases and sells to lessees, directly and also through its equity method investment. The Aerospace Products segment, through the Company’s maintenance facilities, equity method investment and exclusivity arrangements, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components for the CFM56-5B, CFM56-7B and V2500 commercial aircraft engines. 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 equipment that support offshore oil and gas activities and production. The Company previously owned two offshore vessels that were sold in the fourth quarter of 2024. The accounting policies of the segments are the same as those described in the summary of significant accounting policies; however, financial information presented by segment includes the impact of intercompany eliminations. The Company’s Chief 24 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Executive Officer is its Chief Operating Decision Maker (“CODM”). Segment information is presented in the same manner that the CODM reviews the operating results in assessing performance and allocating resources. The CODM evaluates performance for each reportable segment based on net income (loss) attributable to shareholders and is used to monitor budget vs. actual results. The CODM determined that segment asset information is not a key factor in measuring performance or allocating resources. Therefore, segment asset information is not included in the tables below as it is not provided to or reviewed by the CODM. The following tables set forth certain information, which include all significant expenses reviewed by the CODM, for each reportable segment (unaudited): I. For the Three Months Ended September 30, 2025 Three Months Ended September 30, 2025 Aviation Leasing Aerospace Products Corporate and Other Eliminations Total Revenues Aerospace products revenue $ — $ 459,206 $ — $ — $ 459,206 MRE Contract revenue — 58,663 — — 58,663 Lease income 55,072 — — — 55,072 Maintenance revenue 52,370 — — — 52,370 Asset sales revenue 38,461 — — — 38,461 Other revenue (1) 3,292 — — — 3,292 Total revenues 149,195 517,869 — — 667,064 Expenses Cost of sales 34,769 328,153 — — 362,922 Operating expenses 10,146 10,545 18,401 — 39,092 General and administrative — — 1,829 — 1,829 Acquisition and transaction expenses 3,571 599 2,896 — 7,066 Depreciation and amortization 50,226 3,930 1,122 — 55,278 Total expenses 98,712 343,227 24,248 — 466,187 Other income (expense) Interest expense — — ( 60,784 ) — ( 60,784 ) Equity in (losses) earnings of unconsolidated entities (2) ( 1,083 ) 767 — ( 3,908 ) ( 4,224 ) Gain on sale to the 2025 Partnership 4,609 — — — 4,609 Other income 2,103 — 1,467 — 3,570 Total other income (expense) 5,629 767 ( 59,317 ) ( 3,908 ) ( 56,829 ) Income (loss) before income taxes 56,112 175,409 ( 83,565 ) ( 3,908 ) 144,048 Provision for (benefit from) income taxes 14,500 26,815 ( 14,985 ) — 26,330 Net income (loss) 41,612 148,594 ( 68,580 ) ( 3,908 ) 117,718 Less: Dividends on preferred shares — — 3,709 — 3,709 Net income (loss) attributable to shareholders $ 41,612 $ 148,594 $ ( 72,289 ) $ ( 3,908 ) $ 114,009 ______________________________________________________ (1) Includes servicing fees of $ 3,035 for the three months ended September 30, 2025 from the 2025 Partnership. (2) Includes the profit elimination of $( 3,908 ) for the three months ended September 30, 2025 for sales to the 2025 Partnership within the Aerospace Products segment. 25 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Summary information with respect to the Company’s geographic sources of revenue, based on location of customer and lessee, is as follows: Three Months Ended September 30, 2025 Aviation Leasing Aerospace Products Corporate and Other Total Revenues Africa $ 7,919 $ 25,720 $ — $ 33,639 Asia 43,658 98,644 — 142,302 Europe 48,295 97,302 — 145,597 North America 41,803 286,006 — 327,809 South America 7,520 10,197 — 17,717 Total revenues (1) $ 149,195 $ 517,869 $ — $ 667,064 ______________________________________________________ (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 the Company’s customers and lessees. No other country represents more than 10% of total revenues. 26 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) II. For the Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Aviation Leasing Aerospace Products Corporate and Other Eliminations Total Revenues Aerospace products revenue $ — $ 1,144,317 $ — $ — $ 1,144,317 MRE Contract revenue — 228,886 — — 228,886 Lease income 185,951 — — — 185,951 Maintenance revenue 175,081 — — — 175,081 Asset sales revenue 105,315 — — — 105,315 Other revenue (1) 5,827 — 4 — 5,831 Total revenues 472,174 1,373,203 4 — 1,845,381 Expenses Cost of sales 106,517 874,377 — — 980,894 Operating expenses 28,661 25,221 51,976 — 105,858 General and administrative — — 7,387 — 7,387 Acquisition and transaction expenses 7,053 3,145 8,649 — 18,847 Depreciation and amortization 155,710 11,218 3,148 — 170,076 Total expenses 297,941 913,961 71,160 — 1,283,062 Other income (expense) Interest expense — — ( 186,789 ) — ( 186,789 ) Equity in (losses) earnings of unconsolidated entities (2) ( 2,642 ) 1,594 — ( 15,793 ) ( 16,841 ) Gain on sale to the 2025 Partnership 50,083 — — — 50,083 Other income 61,696 — 2,101 — 63,797 Total other income (expense) 109,137 1,594 ( 184,688 ) ( 15,793 ) ( 89,750 ) Income (loss) before income taxes 283,370 460,836 ( 255,844 ) ( 15,793 ) 472,569 Provision for (benefit from) income taxes 58,301 72,017 ( 43,251 ) — 87,067 Net income (loss) 225,069 388,819 ( 212,593 ) ( 15,793 ) 385,502 Less: Dividends on preferred shares — — 13,533 — 13,533 Less: Loss on redemption of preferred shares — — 6,327 — 6,327 Net income (loss) attributable to shareholders $ 225,069 $ 388,819 $ ( 232,453 ) $ ( 15,793 ) $ 365,642 ______________________________________________________ (1) Includes servicing fees of $ 5,635 for the nine months ended September 30, 2025 from the 2025 Partnership. (2) Includes the profit elimination of $( 15,793 ) for the nine months ended September 30, 2025 for sales to the 2025 Partnership within the Aerospace Products segment. 27 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Summary information with respect to the Company’s geographic sources of revenue, based on location of customer and lessee, is as follows: Nine Months Ended September 30, 2025 Aviation Leasing Aerospace Products Corporate and Other Total Revenues Africa $ 18,713 $ 52,202 $ — $ 70,915 Asia 130,010 180,930 4 310,944 Europe 205,596 320,618 — 526,214 North America 91,668 791,477 — 883,145 South America 26,187 27,976 — 54,163 Total revenues (1) $ 472,174 $ 1,373,203 $ 4 $ 1,845,381 ______________________________________________________ (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 customers and 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 September 30, 2025: Operating Leases Remainder of 2025 $ 49,496 2026 156,142 2027 132,618 2028 111,509 2029 81,037 Thereafter 145,045 Total $ 675,847 28 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) III. For the Three Months Ended September 30, 2024 Three Months Ended September 30, 2024 Aviation Leasing Aerospace Products Corporate and Other Total Revenues Aerospace products revenue $ — $ 303,469 $ — $ 303,469 Lease income 57,322 — 8,128 65,450 Maintenance revenue 59,917 — — 59,917 Asset sales revenue 34,953 — — 34,953 Other revenue 74 — 1,931 2,005 Total revenues 152,266 303,469 10,059 465,794 Expenses Cost of sales 20,684 198,812 — 219,496 Operating expenses 9,995 2,617 14,246 26,858 General and administrative — — 4,045 4,045 Acquisition and transaction expenses 2,620 2,100 4,621 9,341 Depreciation and amortization 52,455 1,306 3,014 56,775 Total expenses 85,754 204,835 25,926 316,515 Other expense Interest expense — — ( 57,937 ) ( 57,937 ) Equity in losses of unconsolidated entities — ( 438 ) — ( 438 ) Other income 1,982 — 927 2,909 Total other expense 1,982 ( 438 ) ( 57,010 ) ( 55,466 ) Income (loss) before income taxes 68,494 98,196 ( 72,877 ) 93,813 Provision for (benefit from) income taxes 8,898 4,408 ( 5,975 ) 7,331 Net income (loss) 59,596 93,788 ( 66,902 ) 86,482 Less: Dividends on preferred shares — — 8,335 8,335 Net income (loss) attributable to shareholders $ 59,596 $ 93,788 $ ( 75,237 ) $ 78,147 Summary information with respect to the Company’s geographic sources of revenue, based on location of customer and lessee, is as follows: Three Months Ended September 30, 2024 Aviation Leasing Aerospace Products Corporate and Other Total Revenues Africa $ 1,266 $ — $ — $ 1,266 Asia 46,459 65,714 10,059 122,232 Europe 56,750 84,136 — 140,886 North America 34,700 149,530 — 184,230 South America 13,091 4,089 — 17,180 Total revenues (1) $ 152,266 $ 303,469 $ 10,059 $ 465,794 ______________________________________________________ (1) The United States, included in North America, and Ireland, included in Europe, represent 35 % and 15 % of total revenues, respectively, based on the location of the Company’s customers and lessees. No other country represents more than 10% of total revenues. 29 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) IV. For the Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Aviation Leasing Aerospace Products Corporate and Other Total Revenues Aerospace products revenue $ — $ 737,726 $ — $ 737,726 Lease income 168,927 — 20,438 189,365 Maintenance revenue 156,894 — — 156,894 Asset sales revenue 145,993 — — 145,993 Other revenue 199 — 5,905 6,104 Total revenues 472,013 737,726 26,343 1,236,082 Expenses Cost of sales 111,542 456,615 — 568,157 Operating expenses 26,984 16,510 37,780 81,274 General and administrative — — 10,697 10,697 Acquisition and transaction expenses 7,350 2,871 13,318 23,539 Management fees and incentive allocation to affiliate — — 8,449 8,449 Internalization fee to affiliate — — 300,000 300,000 Depreciation and amortization 151,211 3,177 8,998 163,386 Asset impairment 962 — — 962 Total expenses 298,049 479,173 379,242 1,156,464 Other expense Interest expense — — ( 160,840 ) ( 160,840 ) Loss on extinguishment of debt — — ( 13,920 ) ( 13,920 ) Equity in losses of unconsolidated entities ( 207 ) ( 1,592 ) — ( 1,799 ) Other income 1,440 — 1,605 3,045 Total other expense 1,233 ( 1,592 ) ( 173,155 ) ( 173,514 ) Income (loss) before income taxes 175,197 256,961 ( 526,054 ) ( 93,896 ) Provision for (benefit from) income taxes 20,224 11,865 ( 32,219 ) ( 130 ) Net income (loss) 154,973 245,096 ( 493,835 ) ( 93,766 ) Less: Dividends on preferred shares — — 25,005 25,005 Net income (loss) attributable to shareholders $ 154,973 $ 245,096 $ ( 518,840 ) $ ( 118,771 ) Summary information with respect to the Company’s geographic sources of revenue, based on location of customer and lessee, is as follows: Nine Months Ended September 30, 2024 Aviation Leasing Aerospace Products Corporate and Other Total Revenues Africa $ 3,389 $ 8,271 $ — $ 11,660 Asia 105,220 122,744 26,343 254,307 Europe 235,367 256,752 — 492,119 North America 81,709 336,672 — 418,381 South America 46,328 13,287 — 59,615 Total revenues (1) $ 472,013 $ 737,726 $ 26,343 $ 1,236,082 ______________________________________________________ (1) The United States, included in North America, and Ireland, included in Europe, represent 32 % and 18 % of total revenues, respectively, based on the location of the Company’s customers and lessees. No other country represents more than 10% of total revenues. 30 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) V. Location of Long-Lived Assets The following tables sets forth the geographic location of property, plant and equipment and leasing equipment, net: September 30, 2025 (unaudited) December 31, 2024 Property, plant and equipment and leasing equipment, net Africa $ 18,171 $ 37,369 Asia 404,171 596,547 Europe 596,938 1,038,176 North America 544,037 592,675 South America 220,268 216,414 Total property, plant and equipment and leasing equipment, net (1) $ 1,783,585 $ 2,481,181 ________________________________________________________ (1) The United States, included in North America, represents 24 % of property, plant and equipment and leasing equipment, net as of September 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. No other country represents more than 10% of property, plant and equipment and leasing equipment, net. 13. EARNINGS PER SHARE AND EQUITY Basic earnings per ordinary share (“EPS”) is calculated by dividing net income attributable to shareholders by the weighted average number of ordinary shares outstanding, plus any participating securities. Diluted EPS is calculated by dividing net income attributable to shareholders by the weighted average number of ordinary shares outstanding, plus any participating securities and potentially dilutive securities. Potentially dilutive securities are calculated using the treasury stock method. The calculation of basic and diluted EPS is presented below (unaudited): Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share data) 2025 2024 2025 2024 Net income (loss) $ 117,718 $ 86,482 $ 385,502 $ ( 93,766 ) Less: Dividends on preferred shares 3,709 8,335 13,533 25,005 Less: Loss on redemption of preferred shares — — 6,327 — Net income (loss) attributable to shareholders $ 114,009 $ 78,147 $ 365,642 $ ( 118,771 ) Weighted Average Ordinary Shares Outstanding - Basic 102,569,415 102,380,659 102,560,285 101,199,356 Weighted Average Ordinary Shares Outstanding - Diluted 103,966,650 103,395,348 103,951,713 101,199,356 Earnings (loss) per share: Basic $ 1.11 $ 0.76 $ 3.57 $ ( 1.17 ) Diluted $ 1.10 $ 0.76 $ 3.52 $ ( 1.17 ) For the three months ended September 30, 2025 and 2024, no shares were excluded from the calculation of Diluted EPS. For the nine months ended September 30, 2025 and 2024, 0 and 859,940 shares, respectively, were excluded from the calculation of Diluted EPS due to their anti-dilutive impact. For the three months ended September 30, 2025 and 2024, the Company issued 835 and 482 ordinary shares, respectively, and for the nine months ended September 30, 2025 and 2024, issued 1,511 and 4,852 ordinary shares, respectively, to certain directors as compensation. 14. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Company and its subsidiaries may be involved in various claims, legal proceedings, or may enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. Within the Company’s offshore energy business, a lessee did not fulfill its obligation under its charter arrangement, therefore the Company is pursuing rights afforded to it under the charter and the range of potential losses against the obligation is $ 0.0 million to $ 3.3 million. The Company believes the risk of loss in connection with such arrangements is remote. 31 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 15. RESTRUCTURING CHARGES On May 28, 2024, in connection with the Internalization and termination of the Management Agreement, the Company agreed to pay a total of $ 300.0 million to its Former Manager (for itself and on behalf of the Master GP, as applicable). At closing, the Company issued 1,866,949 ordinary shares valued at $ 150.0 million. The remaining balance was paid in cash on June 17, 2024. 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 nine months ended September 30, 2024. There were no restructuring charges recorded for the three and nine months ended September 30, 2025. 16. SUBSEQUENT EVENTS Dividends On October 27, 2025, the Company’s Board of Directors declared a cash dividend on its ordinary shares and eligible participating securities of $ 0.35 per share for the three months ended September 30, 2025, payable on November 19, 2025 to the holders of record on November 10, 2025. Additionally, on October 27, 2025, the Company’s 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 December 15, 2025 to the holders of record on December 1, 2025 . 32