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 March 31, 2026 December 31, 2025 Assets Current Assets Cash and cash equivalents 2 $ 412,240 $ 300,476 Accounts receivable, net (1) 2 176,873 209,907 Inventory, net 2 1,364,256 1,193,773 Assets held for sale 2 75,703 — Other current assets (2) 2 561,202 408,364 Total current assets 2,590,274 2,112,520 Leasing equipment, net 3 1,248,793 1,545,804 Property, plant, and equipment, net 2 122,136 120,068 Investments 4 313,039 314,156 Intangible assets, net 5 12,872 19,929 Goodwill 2 94,221 94,221 Other non-current assets 147,576 167,060 Total assets $ 4,528,911 $ 4,373,758 Liabilities Current Liabilities Accounts payable $ 203,751 $ 208,224 Accrued liabilities 136,503 90,009 Current maintenance deposits 2 21,546 25,439 Current security deposits 12,354 14,001 Liabilities held for sale 2 23,420 — Other current liabilities 2 96,774 62,202 Total current liabilities 494,348 399,875 Long-term debt, net 6 3,451,087 3,448,891 Non-current maintenance deposits 2 21,764 46,237 Non-current security deposits 2 9,003 15,211 Other non-current liabilities 121,033 129,370 Total liabilities $ 4,097,235 $ 4,039,584 Commitments and contingencies 13 Equity Ordinary shares ($ 0.01 par value per share; 2,000,000,000 shares authorized; 102,580,660 and 102,573,283 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively) $ 1,026 $ 1,026 Preferred shares ($ 0.01 par value per share; 200,000,000 shares authorized; 6,800,000 and 6,800,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively) 68 68 Additional paid in capital 54,911 50,567 Retained earnings 375,671 282,513 Shareholders' equity 431,676 334,174 Total liabilities and equity $ 4,528,911 $ 4,373,758 (1) Includes accounts receivable from the 2025 Partnership of $ 35,422 and $ 47,294 as of March 31, 2026 and December 31, 2025, respectively. (2) Includes receivables from the 2025 Partnership of $ 18,908 and $ 20,681 as of March 31, 2026 and December 31, 2025, 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 March 31, Notes 2026 2025 Revenues Aerospace products revenue 2 $ 522,585 $ 264,425 MRE Contract revenue 2, 10 221,230 100,638 Lease income 2 39,892 68,440 Maintenance revenue 2 30,599 49,607 Asset sales revenue 2 10,184 18,939 Other revenue (1) 6,207 31 Total revenues 11 830,697 502,080 Expenses Cost of sales 524,268 248,714 Operating expenses 2 64,987 32,438 General and administrative 2,413 3,116 Acquisition and transaction expenses 16,361 7,292 Depreciation and amortization 3, 5 52,289 59,562 Total expenses 660,318 351,122 Other (expense) income Interest expense ( 61,407 ) ( 62,040 ) Equity in losses of unconsolidated entities (2) 4 ( 2,363 ) ( 7,614 ) Gain on sale to the 2025 Partnership 15,168 10,870 Other income 47,582 33,071 Total other expense ( 1,020 ) ( 25,713 ) Income before income taxes 169,359 125,245 Provision for income taxes 9 31,460 22,859 Net income 137,899 102,386 Less: Dividends on preferred shares 3,709 6,115 Less: Loss on redemption of preferred shares — 6,327 Net income attributable to shareholders $ 134,190 $ 89,944 Earnings per share: 12 Basic $ 1.31 $ 0.88 Diluted $ 1.29 $ 0.87 Weighted average shares outstanding: Basic 102,575,500 102,552,436 Diluted 104,255,902 103,159,051 (1) Includes servicing fees of $ 5,861 and $ 0 for the three months ended March 31, 2026 and 2025, respectively, from the 2025 Partnership. (2) Includes the profit elimination of $( 10,000 ) and $( 6,950 ) for the three months ended March 31, 2026 and 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 Months Ended March 31, 2026 Ordinary Shares Preferred Shares Additional Paid In Capital Retained Earnings Total Equity Equity - December 31, 2025 $ 1,026 $ 68 $ 50,567 $ 282,513 $ 334,174 Net income 137,899 137,899 Total comprehensive income 137,899 137,899 Issuance of ordinary shares 140 140 Dividends declared - ordinary shares ( 41,032 ) ( 41,032 ) Dividends declared - preferred shares ( 3,709 ) ( 3,709 ) Equity-based compensation 6,347 6,347 Net settlement on vesting of equity awards ( 2,143 ) ( 2,143 ) Equity - March 31, 2026 $ 1,026 $ 68 $ 54,911 $ 375,671 $ 431,676 Three Months Ended March 31, 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 102,386 102,386 Total comprehensive income 102,386 102,386 Redemption of preferred shares ( 49 ) ( 117,791 ) ( 117,840 ) Loss on redemption of preferred shares ( 6,327 ) ( 6,327 ) Issuance of ordinary shares 739 739 Dividends declared - ordinary shares ( 30,767 ) ( 30,767 ) Dividends declared - preferred shares ( 6,115 ) ( 6,115 ) Equity-based compensation 4,889 4,889 Equity - March 31, 2025 $ 1,026 $ 68 $ ( 2,044 ) $ 29,283 $ 28,333 See accompanying notes to consolidated financial statements. 7 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 137,899 $ 102,386 Adjustments to reconcile net income to net cash used in operating activities: Equity in losses of unconsolidated entities (1) 2,363 7,614 Gain on sale of assets ( 92,533 ) ( 8,549 ) Gain on sale of assets to the 2025 Partnership ( 15,168 ) ( 10,870 ) Gain on insurance recoveries ( 44,595 ) ( 30,125 ) Security deposits and maintenance claims included in earnings ( 1,783 ) ( 3,559 ) Equity-based compensation 6,347 4,889 Depreciation and amortization 52,289 59,562 Deferred income taxes 12,208 20,683 Change in fair value of guarantees 411 316 Amortization of lease intangibles and incentives 7,224 8,825 Amortization of deferred financing costs 3,054 2,830 Other 1,649 210 Change in: Accounts receivable 28,787 ( 73,088 ) Inventory ( 186,896 ) ( 127,211 ) Other assets ( 121,135 ) ( 41,410 ) Accounts payable and accrued liabilities 26,267 65,251 Management fees payable to affiliate — ( 260 ) Other liabilities 23,536 ( 3,460 ) Net cash used in operating activities ( 160,076 ) ( 25,966 ) Cash flows from investing activities: Investment in unconsolidated entities ( 1,246 ) ( 19,967 ) Principal collections on notes receivable 1,565 989 Acquisition of leasing equipment ( 87,793 ) ( 267,417 ) Investments in financing receivables — ( 2,764 ) Investment in promissory notes ( 801 ) — Acquisition of property, plant and equipment ( 6,641 ) ( 4,156 ) Acquisition of lease intangibles — 1,282 Deposits for acquisition of leasing equipment (2) ( 37,121 ) ( 46,344 ) Proceeds from sale of assets 292,281 174,054 Proceeds from sale of assets to the 2025 Partnership 117,345 58,892 Proceeds from settlement of insurance claims 27,040 30,125 Proceeds from deposits on sale of leasing equipment 6,959 3,376 Return of deposits for acquisition of leasing equipment (2) 5,430 44,303 Net cash provided by (used in) investing activities $ 317,018 $ ( 27,627 ) See accompanying notes to consolidated financial statements. 8 FTAI AVIATION LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands) Three Months Ended March 31, 2026 2025 Cash flows from financing activities: Proceeds from debt $ 125,000 $ 290,000 Repayment of debt ( 125,000 ) ( 90,000 ) Payment of deferred financing costs — ( 39 ) Receipt of security deposits under operating lease agreements 100 1,233 Return of security deposits under operating lease agreements ( 558 ) ( 300 ) Receipt of maintenance deposits under operating lease agreements 7,487 15,011 Release of maintenance deposits under operating lease agreements ( 5,323 ) ( 4,246 ) Settlement of equity-based compensation ( 2,143 ) — Redemption of preferred shares — ( 124,167 ) Cash dividends - ordinary shares ( 41,032 ) ( 30,767 ) Cash dividends - preferred shares ( 3,709 ) ( 6,115 ) Net cash (used in) provided by financing activities $ ( 45,178 ) $ 50,610 Net increase in cash and cash equivalents and restricted cash 111,764 ( 2,983 ) Cash and cash equivalents and restricted cash, beginning of period 300,626 115,266 Cash and cash equivalents and restricted cash, end of period $ 412,390 $ 112,283 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 $ 59,317 $ 34,602 Acquisition of leasing equipment in accrued liabilities ( 15,895 ) ( 8,341 ) Purchase deposits reclassified to leasing equipment from other assets upon acquisition — ( 17,027 ) Accounts receivable settled with maintenance deposits ( 1,484 ) ( 5,787 ) (1) Includes the profit elimination of $( 10,000 ) and $( 6,950 ) for the three months ended March 31, 2026 and 2025, 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 $ 0 and $ 25,400 for the three months ended March 31, 2026 and 2025, respectively, and return of deposits for the acquisition of leasing equipment reimbursed from the 2025 Partnership of $ 0 and $ 42,813 for the three months ended March 31, 2026 and 2025, respectively. See accompanying notes to consolidated financial statements. 9 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, 2025 (“Form 10-K”). FTAI Aviation is a Cayman Islands exempted company, which through its subsidiaries, is a leading independent engine maintenance platform focused on the CFM56-5B, CFM56-7B and V2500 aircraft engines which power the 737NG and A320ceo aircraft. The Company repairs and rebuilds engines and aftermarket components of engines as well as develops and manufactures Parts Manufacturer Approval (“PMA”) parts through a joint venture. Additionally, the Company owns and manages leased aircraft and engines to airlines and asset owners globally. On December 30, 2025, the Company announced the launch of FTAI Power, a platform focused on converting CFM56 aircraft engines to aeroderivative power turbines. The Company has two reportable segments, (i) Aerospace Products and (ii) Aviation Leasing (see Note 11). The Company conducts engine maintenance at its 100% owned facilities in Montréal, Miami, Lisbon, and Orange, as well as through its 50 % equity ownership in QuickTurn Europe, located in Rome, and 50 % equity ownership in Prime Engine Accessories, located in Bristol. Collectively, these facilities span over one million 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, Lisbon, Rome and Bristol. 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 Company uses the equity method of accounting for investments in entities in which it exercises significant influence, but which 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 its 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. 10 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 606, Revenue from contracts with customers and ASC 842, Leases, unless otherwise noted . The Company has elected to exclude sales tax and other similar taxes from revenues. Aerospace Products Revenue — Aerospace products revenue primarily consists of the transaction price related to the sale of CFM56-7B, CFM56-5B and V2500 engines, engine modules, spare parts and used material inventory, and are accounted for within the scope of ASC 606. Revenue is recognized at the point in time 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 CFM56-7B and CFM56-5B engines to customers as they become unserviceable during the contract term. The Company recognizes revenue related to these engine management service contracts 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”). The net cash purchase price received by the Company is contractual and customary market-based compensation for fulfilling such performance obligations. MRE Contract revenue is recognized under ASC 606 at the point in time 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 10 “Affiliate Transactions and Former Management Agreement” for additional information on the 2025 Partnership and the Strategic Capital Initiative. 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. 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 for engines on leased aircraft, projected costs for engine maintenance, and forecasted utilization, 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. For purchase and lease back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the relative fair value of the aircraft and lease. The fair value of the lease may include a lease premium or discount, which is recorded as a favorable or unfavorable lease intangible. 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. 11 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Other (Expense) Income Gain on Sale to the 2025 Partnership — The 2025 Partnership acquires on-lease narrowbody aircraft from the Company (the “Seed Assets”) and receives replacement aircraft engines and modules through the Company’s MRE business. During the three months ended March 31, 2026 and 2025, 9 and 4 aircraft were sold to the 2025 Partnership for a gain of $ 15.2 million and $ 10.9 million, respectively. The aircraft sales were accounted for under ASC 610-20, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets , as they were non-recurring in nature and not considered part of the Company’s ordinary activities. Refer to Note 10 “Affiliate Transactions and Former Management Agreement” for additional information on the 2025 Partnership and the Strategic Capital Initiative. Other Income — During the three months ended March 31, 2026 and 2025, the Company recognized $ 44.6 million and $ 30.1 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 28 %, 17 %, and 10 % of its revenue from three customers in the Aerospace Products segment during the three months ended March 31, 2026. The Company earned 19 % of its revenue from one customer in the Aerospace products segment during the three months ended March 31, 2025. As of March 31, 2026, there was one customer in the Aerospace Products segment that represented 21 % of total accounts receivable, net. As of December 31, 2025, there was one customer in the Aerospace Products segment that represented 23 % 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 quarterly, on a customer-by-customer basis. The allowance for doubtful accounts was $ 28.4 million and $ 28.4 million as of March 31, 2026 and December 31, 2025, respectively . There was a provision for credit losses of $ 0.0 million and $ 0.2 million for the three months ended March 31, 2026 and 2025, 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. Other Current Assets — Other current assets are summarized as follows: March 31, 2026 (unaudited) December 31, 2025 Notes receivable $ 259,652 $ 216,298 Prepaid expenses including prepayments for maintenance that has not yet been incurred 187,240 79,806 Financing receivable resulting from failed sale-leaseback transactions 32,815 37,740 Other 81,495 74,520 Other current assets $ 561,202 $ 408,364 Other Current Liabilities — Other current liabilities are summarized as follows: March 31, 2026 (unaudited) December 31, 2025 Customer deposits and advanced payments 47,871 $ 33,755 Tax liabilities 34,224 15,264 Other 14,679 13,183 Other current liabilities $ 96,774 $ 62,202 Assets Held for Sale — The Company classifies 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 five Seed Assets to the 2025 Partnership and has classified them as held for sale. 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 12 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) second quarter of 2026. Refer to Note 10 “Affiliate Transactions and Former Management Agreement” for additional information on the 2025 Partnership. 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 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. Assets and liabilities held for sale are summarized as follows: March 31, 2026 (unaudited) Leasing equipment, net $ 75,683 Other non-current assets 20 Assets held for sale $ 75,703 Current maintenance deposits $ 5,349 Non-current maintenance deposits 10,479 Non-current security deposits 1,364 Other non-current liabilities 6,228 Liabilities held for sale $ 23,420 Dividends — Dividends are recorded if and when declared by the Board of Directors. For the three months ended March 31, 2026, the Board of Directors declared cash dividends of $ 0.45 per ordinary share. For the three months ended March 31, 2025, the Board of Directors declared cash dividends of $ 0.30 per ordinary share. Additionally, in the three months ended March 31, 2026, 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. 13 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) The cash and noncash related activities described above during the three months ended March 31, 2026 and 2025 are detailed below (unaudited): Three Months Ended March 31, (in thousands) 2026 2025 Cost of modules and parts sold sourced from engines originally within leasing equipment $ 1,686 $ 10,130 Transfers of engines from leasing equipment to inventory for manufacturing and sale 89,629 67,815 Transfers of inventory to leasing equipment for rebuilding and sale of engines ( 102,932 ) ( 85,928 ) Total outflows related to manufacturing modules and parts - included in net cash used in operating activities ( 215,888 ) ( 159,607 ) Cash received for assets sold sourced from leasing equipment - inflow included in net cash used in operating activities 11,217 21,182 Cash received for sales of leasing equipment that include components sourced from inventory - inflow included in net cash provided by investing activities 280,667 145,450 Cash paid for engine and aircraft inventory - outflow included in net cash used in operating activities ( 156,339 ) ( 15,835 ) Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements — 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 adopted this guidance in the first quarter of 2026. However, the Company does not expect to elect the practical expedient or make the accounting policy election provided by the ASU and, accordingly, does not expect the amendments to have an impact on its consolidated financial statements. Accounting Pronouncements Not Yet Adopted — 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, 2025. Specifically, the Company continues to monitor the future adoption of ASU 2024‑03, Income Statement—Reporting Comprehensive Income (Topic 220): Improvements to Reportable Segment Expense Disclosures , which has a future effective date. The Company is currently evaluating the impact this standard may have on its consolidated financial statements and related disclosures. 3. LEASING EQUIPMENT, NET Leasing equipment, net is summarized as follows: March 31, 2026 (unaudited) December 31, 2025 Leasing equipment $ 1,638,528 $ 2,057,624 Less: Accumulated depreciation ( 389,735 ) ( 511,820 ) Leasing equipment, net $ 1,248,793 $ 1,545,804 The Company identified certain assets in its leasing equipment portfolio with indicators of impairment. During the three months ended March 31, 2026 and 2025, the Company did not record any transactional impairment charges. Depreciation expense for leasing equipment is summarized as follows (unaudited): Three Months Ended March 31, 2026 2025 Depreciation expense for leasing equipment $ 47,310 $ 55,886 14 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 4. INVESTMENTS The following table presents the ownership interests and carrying values of the Company’s investments: Carrying Value Investment Ownership Percentage March 31, 2026 (unaudited) December 31, 2025 Advanced Engine Repair JV Equity method 25 % $ 22,368 $ 22,429 2025 Partnership Equity method 19 % 279,417 281,740 QuickTurn Europe Equity method 50 % 10,008 9,987 Other Various Various 1,246 — $ 313,039 $ 314,156 The Company did not recognize any other-than-temporary impairments for the three months ended March 31, 2026 and 2025. The following table presents the Company’s proportionate share of equity in (losses) earnings (unaudited): Three Months Ended March 31, 2026 2025 Advanced Engine Repair JV $ ( 61 ) $ 113 2025 Partnership (1) ( 2,323 ) ( 7,727 ) QuickTurn Europe 21 — Total $ ( 2,363 ) $ ( 7,614 ) (1) Includes the profit elimination of $( 10,000 ) and $( 6,950 ) for the three months ended March 31, 2026 and 2025, respectively, for sales to the 2025 Partnership. 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. 2025 Partnership As of December 31, 2025, the Company invested $ 291.5 million in the 2025 Partnership. During the three months ended March 31, 2026, the Company made no investments in the 2025 Partnership. The 2025 Partnership is an investment focused on acquiring 737NG and A320ceo on-lease narrowbody aircraft, for which the Company is the Servicer and holds a 19 % 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 and the elimination of profit on sales of engine and modules to the 2025 Partnership under ASC 606. 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, 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. 15 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 5. INTANGIBLE ASSETS AND LIABILITIES, NET Intangible assets and liabilities, net are summarized as follows: March 31, 2026 (unaudited) December 31, 2025 Intangible assets Acquired favorable lease intangibles $ 4,322 $ 17,245 Less: Accumulated amortization ( 2,689 ) ( 8,935 ) Acquired favorable lease intangibles, net 1,633 8,310 Acquired customer relationships 12,607 12,607 Less: Accumulated amortization ( 1,368 ) ( 988 ) Acquired customer relationships, net 11,239 11,619 Total intangible assets, net $ 12,872 $ 19,929 Intangible liabilities Acquired unfavorable lease intangibles $ 5,970 $ 7,688 Less: Accumulated amortization ( 2,106 ) ( 2,132 ) Acquired unfavorable lease intangibles, net $ 3,864 $ 5,556 The weighted average amortization period of intangible assets acquired during the three months ended March 31, 2026 is as follows: Weighted Average Amortization Period Lease intangibles 2.6 years Customer relationships 10.4 years Total intangible assets 7.9 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 March 31, 2026 2025 Lease intangibles Lease income $ 337 $ 3,206 Customer relationships Depreciation and amortization 378 95 Total $ 715 3,301 As of March 31, 2026, estimated net annual amortization of intangibles is as follows (unaudited): Remainder of 2026 $ 561 2027 356 2028 989 2029 1,161 2030 1,097 Thereafter 4,844 Total $ 9,008 16 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 6. DEBT, NET The Company’s debt, net is summarized as follows: March 31, 2026 (unaudited) December 31, 2025 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) 1,000,895 5.50 % 5/1/28 1,000,995 Senior Notes due 2030 (3) 497,575 7.88 % 12/1/30 497,470 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) 497,844 5.88 % 4/15/33 497,784 Total bonds payable 3,496,314 3,496,249 Debt 3,496,314 3,496,249 Less: Debt issuance costs ( 45,227 ) ( 47,358 ) Total debt, net $ 3,451,087 $ 3,448,891 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 $ 895 and $ 995 at March 31, 2026 and December 31, 2025, respectively. (3) Includes an unamortized discount of $ 2,425 and $ 2,530 at March 31, 2026 and December 31, 2025, respectively. (4) Includes an unamortized discount of $ 2,156 and $ 2,216 at March 31, 2026 and December 31, 2025, respectively. We were in compliance with all debt covenants as of March 31, 2026. 7. 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. 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. 17 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 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: March 31, 2026 (unaudited) December 31, 2025 Senior Notes due 2028 $ 1,000,520 $ 1,001,880 Senior Notes due 2030 522,765 531,735 Senior Notes due 2031 717,752 737,618 Senior Notes due 2032 823,184 842,240 Senior Notes due 2033 491,755 508,525 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 $ 12.4 million and $ 12.0 million as of March 31, 2026 and December 31, 2025, 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 months ended March 31, 2026 and 2025, the Company recorded a $ 0.4 million and $ 0.3 million increase, respectively, related to the change in fair value, which is recorded in Asset sales revenue. During the three months ended March 31, 2026 and 2025, 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 2 to 7 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at March 31, 2026 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 leasing and sale of assets. 8. 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 March 31, 2026, 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. 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) 2026 2025 Stock Options $ 127 $ 127 $ 1,143 7.4 years Performance shares 3,810 3,262 43,924 2.6 years Restricted Shares 2,410 1,500 24,786 1.5 years Total $ 6,347 $ 4,889 $ 69,853 Options During the three months ended March 31, 2026 and 2025, the Company did not issue any options to employees. 18 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) Performance Shares During the three months ended March 31, 2026, the Company issued performance shares to select officers and employees of the Company with a grant date fair value of $ 11.0 million, vesting over a 3 year performance period based on the achievement of relative total shareholder return ( 50 %) and cumulative diluted EPS ( 50 %). During the three months ended March 31, 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 three months ended March 31, 2026, the Company issued restricted shares to select officers and employees of the Company with a grant date fair value of $ 13.2 million, vesting over 3 years. During the three months ended March 31, 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. 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. 9. INCOME TAXES The current and deferred components of the provision for income taxes are as follows (unaudited): Three Months Ended March 31, 2026 2025 Current: Ireland $ 16,791 $ 1,489 Cayman Islands — — Bermuda 1,713 — United States: Federal — 244 State and local 714 390 Other Non-Ireland including Pillar Two top-up tax 34 53 Total current provision 19,252 2,176 Deferred: Ireland 7,279 13,700 Cayman Islands — — Bermuda 5,138 4,441 United States: Federal 2,965 1,226 State and local 238 378 Other Non-Ireland ( 3,412 ) 938 Total deferred provision 12,208 20,683 ​ Total provision for income taxes $ 31,460 $ 22,859 The Company is incorporated in the Cayman Islands where income taxes are not imposed. Taxable income or loss generated by the Company’s corporate subsidiaries is subject to Irish, U.S. federal, state and foreign corporate income tax in locations where they conduct business. The Company’s effective tax rate differs from the Irish statutory rate of 12.5 % primarily due to the impact of Pillar II and the portion of its income that is subject to taxation in jurisdictions other than Ireland. As of and for the three months ended March 31, 2026, 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 2022. 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. 19 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 10. AFFILIATE TRANSACTIONS AND FORMER MANAGEMENT AGREEMENT Strategic Capital Initiative – 2025 Partnership On February 10, 2026, the Company amended and restated the Aircraft Sale and Purchase agreement, originally entered into as of December 30, 2024, pursuant to which the SPVs of the 2025 Partnership will acquire 14 on-lease 737NG and A320ceo aircraft in addition to the originally committed 45 on-lease 737NG and A320ceo aircraft. In aggregate, the net purchase price for the 60 on-lease 737NG and A320ceo aircraft is approximately $ 700.0 million, subject to certain customary closing conditions. The purchase price of the seed assets are contractual and the Company receives customary, market-based compensation for the sale of the seed assets to the 2025 Partnership. As of March 31, 2026, the Company sold 55 of the 60 committed aircraft to the 2025 Partnership. During the three months ended March 31, 2026 and 2025, on behalf of the 2025 Partnership, the Company paid refundable deposits of $ 0.0 million and $ 25.4 million to unrelated, third-parties on future purchases of aircraft, respectively. During the three months ended March 31, 2026 and 2025, the 2025 Partnership reimbursed the Company $ 0.0 million and $ 42.8 million, in refundable deposits, respectively. During the three months ended March 31, 2026 and 2025, the Company recorded $ 221.2 million and $ 100.6 million of MRE Contract revenue, respectively, for the sale and purchase of such engines to and from the 2025 Partnership. Refer to Note 2 “Summary of Significant Accounting Policies” for additional information on MRE Contract revenue. The Company provides aircraft management services to the 2025 Partnership, and receives customary, market-based compensation for providing such services, which is included in Other revenue on the Company’s Consolidated Statement of Operations. Former Management Agreement On May 28, 2024, the Company entered into definitive agreements with FIG LLC (the “Former manager”) and Master GP to internalize the Company’s management function (the “Internalization”). 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. 20 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 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. 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 March 31, 2026 2025 Classification in the Consolidated Statements of Operations: General and administrative $ — $ 196 Acquisition and transaction expenses — 104 Total $ — $ 300 21 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 11. 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) Aerospace Products and (ii) Aviation Leasing. The Aerospace Products segment, through the Company’s maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components for the CFM56-7B, CFM56-5B and V2500 commercial aircraft engines. The Aviation Leasing segment owns and manages aviation assets, including aircraft and aircraft engines, which it leases to lessees directly and through the Company’s equity method investment formed as part of the Company’s Strategic Capital Initiative. 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, and expenses relating to FTAI Power. 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 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): 22 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) I. For the Three Months Ended March 31, 2026 Three Months Ended March 31, 2026 Aerospace Products Aviation Leasing Corporate and Other Eliminations Total Revenues Aerospace products revenue $ 522,585 $ — $ — $ — $ 522,585 MRE Contract revenue 221,230 — — — 221,230 Lease income — 39,892 — — 39,892 Maintenance revenue — 30,599 — — 30,599 Asset sales revenue — 10,184 — — 10,184 Other revenue (1) — 6,207 — — 6,207 Total revenues 743,815 86,882 — — 830,697 Expenses Cost of sales 511,012 13,256 — — 524,268 Operating expenses 10,839 10,275 43,873 — 64,987 General and administrative — — 2,413 — 2,413 Acquisition and transaction expenses ( 15 ) 4,186 12,190 — 16,361 Depreciation and amortization 4,678 46,485 1,126 — 52,289 Total expenses 526,514 74,202 59,602 — 660,318 Other income (expense) Interest expense — — ( 61,407 ) — ( 61,407 ) Equity in (losses) earnings of unconsolidated entities (2) ( 40 ) 7,677 — ( 10,000 ) ( 2,363 ) Gain on sale to the 2025 Partnership — 15,168 — — 15,168 Other income 171 47,239 172 — 47,582 Total other income (expense) 131 70,084 ( 61,235 ) ( 10,000 ) ( 1,020 ) Income (loss) before income taxes 217,432 82,764 ( 120,837 ) ( 10,000 ) 169,359 Provision for (benefit from) income taxes 33,697 18,326 ( 20,563 ) — 31,460 Net income (loss) 183,735 64,438 ( 100,274 ) ( 10,000 ) 137,899 Less: Dividends on preferred shares — — 3,709 — 3,709 Net income (loss) attributable to shareholders $ 183,735 $ 64,438 $ ( 103,983 ) $ ( 10,000 ) $ 134,190 (1) Includes servicing fees of $ 5,861 for the three months ended March 31, 2026 from the 2025 Partnership. (2) Includes the profit elimination of $( 10,000 ) for the three months ended March 31, 2026 for sales to the 2025 Partnership within the Aerospace Products segment. 23 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 March 31, 2026 Aerospace Products Aviation Leasing Corporate and Other Total Revenues Africa $ — $ 2,542 $ — $ 2,542 Asia 27,852 19,662 — 47,514 Europe 218,029 30,281 — 248,310 North America 482,997 27,673 — 510,670 South America 14,937 6,724 — 21,661 Total revenues (1) $ 743,815 $ 86,882 $ — $ 830,697 (1) The United States, included in North America, Bermuda, included in North America, and Ireland, included in Europe, represent 31 %, 24 % , and 21 % 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. Presented below are the contracted minimum future annual revenues to be received under existing operating leases as of March 31, 2026: March 31, 2026 Remainder of 2026 $ 86,638 2027 94,043 2028 75,910 2029 51,088 2030 38,972 Thereafter 49,452 Total $ 396,103 24 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) II. For the Three Months Ended March 31, 2025 Three Months Ended March 31, 2025 Aerospace Products Aviation Leasing Corporate and Other Eliminations Total Revenues Aerospace products revenue $ 264,425 $ — $ — $ — $ 264,425 MRE contract revenue 100,638 — — — 100,638 Lease income — 68,440 — — 68,440 Maintenance revenue — 49,607 — — 49,607 Asset sales revenue — 18,939 — — 18,939 Other revenue — 27 4 — 31 Total revenues 365,063 137,013 4 — 502,080 Expenses Cost of sales 228,755 19,959 — — 248,714 Operating expenses 5,687 7,426 19,325 — 32,438 General and administrative — — 3,116 — 3,116 Acquisition and transaction expenses 1,132 2,905 3,255 — 7,292 Depreciation and amortization 3,584 55,061 917 — 59,562 Total expenses 239,158 85,351 26,613 — 351,122 Other expense Interest expense — — ( 62,040 ) — ( 62,040 ) Equity in earnings (losses) of unconsolidated entities (1) 113 ( 777 ) — ( 6,950 ) ( 7,614 ) Gain on sale to the 2025 Partnership — 10,870 — — 10,870 Other income — 32,619 452 — 33,071 Total other expense 113 42,712 ( 61,588 ) ( 6,950 ) ( 25,713 ) Income (loss) before income taxes 126,018 94,374 ( 88,197 ) ( 6,950 ) 125,245 Provision for (benefit from) income taxes 19,375 17,348 ( 13,864 ) — 22,859 Net income (loss) 106,643 77,026 ( 74,333 ) ( 6,950 ) 102,386 Less: Dividends on preferred shares — — 6,115 — 6,115 Less: Loss on redemption of preferred shares — — 6,327 — 6,327 Net income (loss) attributable to shareholders $ 106,643 $ 77,026 $ ( 86,775 ) $ ( 6,950 ) $ 89,944 (1) 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. 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 March 31, 2025 Aerospace Products Aviation Leasing Corporate and Other Total Revenues Africa $ 9,482 $ 2,199 $ — $ 11,681 Asia 42,959 32,141 4 75,104 Europe 96,872 74,044 — 170,916 North America 207,432 18,263 — 225,695 South America 8,318 10,366 — 18,684 Total revenues (1) $ 365,063 $ 137,013 $ 4 $ 502,080 (1) The United States, included in North America, and Ireland, included in Europe, and Bermuda, included in North America, represent 26 %, 19 % and 11 % 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. III. Location of Long-Lived Assets The following tables sets forth the geographic location of property, plant and equipment and leasing equipment, net: March 31, 2026 (unaudited) December 31, 2025 Property, plant and equipment and leasing equipment, net Africa $ 16,067 $ 17,174 Asia 264,808 323,542 Europe 436,767 587,359 North America 414,617 480,977 South America 238,670 256,820 Total property, plant and equipment and leasing equipment, net (1) $ 1,370,929 $ 1,665,872 (1) The United States, included in North America, and Chile, included in South America, represents 23 % and 12 % of property, plant and equipment and leasing equipment, net, respectively, as of March 31, 2026. The United States, included in North America, represented 22 % of property, plant and equipment and leasing equipment, net as of December 31, 2025, respectively. No other country represents more than 10% of property, plant and equipment and leasing equipment, net. 26 FTAI AVIATION LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Dollars in tables in thousands, unless otherwise noted) 12. 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 March 31, (in thousands, except share and per share data) 2026 2025 Net income $ 137,899 $ 102,386 Less: Dividends on preferred shares 3,709 6,115 Less: Loss on redemption of preferred shares — 6,327 Net income attributable to shareholders $ 134,190 $ 89,944 Weighted Average Ordinary Shares Outstanding - Basic 102,575,500 102,552,436 Weighted Average Ordinary Shares Outstanding - Diluted 104,255,902 103,159,051 Earnings per share: Basic $ 1.31 $ 0.88 Diluted $ 1.29 $ 0.87 For the three months ended March 31, 2026, 52,791 shares were excluded from the calculation of Diluted EPS. For the three months ended 2025, no shares were excluded from the calculation of Diluted EPS. During the three months ended March 31, 2026, the Company issued 586 ordinary shares to certain directors as compensation. 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. 13. 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. 14. SUBSEQUENT EVENTS Dividends On April 28, 2026, the Company’s Board of Directors declared a cash dividend on its ordinary shares and eligible participating securities of 0.45 per share for the three months ended March 31, 2026, payable on May 26, 2026 to the holders of record on May 13, 2026. Additionally, on April 28, 2026, 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 June 15, 2026 to the holders of record on June 1, 2026. On April 24, 2026, the Company amended and restated its Revolving Credit Facility by executing a Fourth Amended and Restated Credit Agreement (the “Revolver Amendment”). The Revolver Amendment provides for revolving loans to be made available to the Company in an aggregate principal amount of up to $ 2.025 billion, of which up to $ 50.0 million may be utilized for the issuance of letters of credit. 27