FTAI Aviation Ltd. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand FTAI Aviation Ltd. (the “Company,” “we,” “our” or “us”). Our MD&A should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes, and with Part II, Item 1A, “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q. Overview We are a leading independent engine maintenance platform focused on the CFM56-5B, CFM56-7B and V2500 aircraft engines which power the 737NG and A320ceo aircraft. We repair and rebuild engines in our maintenance facilities and with our joint venture partners, and sell or lease the engines to airlines and asset owners around the world. Our primary business model is to sell engines via exchange through our proprietary Maintenance, Repair and Exchange (“MRE”) model which is reported under our Aerospace Products segment. We also own and manage a portfolio of on- and off-lease aircraft and engines through our Aviation Leasing segment. While historically these investment activities have been primarily held on balance sheet, at the end of 2024, we launched our Strategic Capital Initiative, which consists of an asset management business that manages third-party capital to invest in on-lease aircraft. We expect our primary investment activities to be through our Strategic Capital Initiative going forward. As of March 31, 2026, we had total consolidated assets of $4.5 billion and total equity of $431.7 million. Internalization of Management 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; (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 until October 31, 2024, during which the Company procured replacements for the Services. In addition, the Former Manager was required to continue to provide the services that were reasonably required by the Company to prepare its quarterly and annual financial statements until May 31, 2025. The Services were provided to the Company for a fee equal to the Former Manager’s cost of providing the Services, including the allocated cost of, among other things, overhead, employee wages and compensation, rent and related real estate expenses and actually incurred out-of-pocket expenses, plus a mark-up of ten percent (10%). Strategic Capital Initiative On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The Strategic Capital Initiative, and its related partnerships, allows us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The first partnership under the initiative (the “2025 Partnership”) focuses on acquiring 737NG and A320ceo aircraft. The 2025 Partnership completed its fundraise in October 2025 with $2.0 billion of equity commitments. The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft. The Company, as the Servicer, provides aircraft management services to the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services. 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. Operating Segments The key factors used to identify the reportable segments are the organization and alignment of our internal operations and the nature of our products and services. Our two reportable segments are (i) Aerospace Products and (ii) Aviation Leasing. The Aerospace Products segment, through our maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes and sells aircraft engines and aftermarket components primarily 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 and sells to lessees, directly and also through its equity method investment. 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 offshore energy related assets, which consist of equipment that support offshore oil and gas activities and production, and expenses relating to FTAI Power. 28 Adjusted EBITDA (Non-GAAP) Besides net income (loss), the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, utilizes Adjusted EBITDA as a key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance and make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance. Adjusted EBITDA is defined as net income (loss) attributable to shareholders from continuing operations, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and preferred shares and capital lease obligations, asset impairment charges, incentive allocations, depreciation and amortization expense, interest expense and dividends on preferred shares, internalization fee to affiliate, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities, if any. 29 Results of Operations Comparison of the three months ended months ended March 31, 2026 and 2025 The following table presents our consolidated results of operations: Three Months Ended March 31, Change (in thousands) 2026 2025 Revenues Aerospace products revenue $ 522,585 $ 264,425 $ 258,160 MRE Contract revenue 221,230 100,638 120,592 Lease income 39,892 68,440 (28,548) Maintenance revenue 30,599 49,607 (19,008) Asset sales revenue 10,184 18,939 (8,755) Other revenue (1) 6,207 31 6,176 Total revenues 830,697 502,080 328,617 Expenses Cost of sales 524,268 248,714 275,554 Operating expenses 64,987 32,438 32,549 General and administrative 2,413 3,116 (703) Acquisition and transaction expenses 16,361 7,292 9,069 Depreciation and amortization 52,289 59,562 (7,273) Total expenses 660,318 351,122 309,196 Other (expense) income Interest expense (61,407) (62,040) 633 Equity in losses of unconsolidated entities (2) (2,363) (7,614) 5,251 Gain on sale to the 2025 Partnership 15,168 10,870 4,298 Other income 47,582 33,071 14,511 Total other expense (1,020) (25,713) 24,693 Income before income taxes 169,359 125,245 44,114 Provision for income taxes 31,460 22,859 8,601 Net income 137,899 102,386 35,513 Less: Dividends on preferred shares 3,709 6,115 (2,406) Less: Loss on redemption of preferred shares — 6,327 (6,327) Net income attributable to shareholders $ 134,190 $ 89,944 $ 44,246 (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. 30 The following table sets forth a reconciliation of net income (loss) attributable to shareholders to Adjusted EBITDA: Three Months Ended March 31, Change (in thousands) 2026 2025 Net income attributable to shareholders $ 134,190 $ 89,944 $ 44,246 Add: Provision for income taxes 31,460 22,859 8,601 Add: Equity-based compensation expense 6,347 4,889 1,458 Add: Acquisition and transaction expenses 16,361 7,292 9,069 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — 6,327 (6,327) Add: Asset impairment charges — — — Add: Incentive allocations — — — Add: Depreciation and amortization expense (1) 59,513 68,387 (8,874) Add: Interest expense and dividends on preferred shares 65,116 68,155 (3,039) Add: Internalization fee to affiliate — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 20,227 41 20,186 Less: Equity in (earnings) losses of unconsolidated entities (3) (7,637) 664 (8,301) Adjusted EBITDA (non-GAAP) $ 325,577 $ 268,558 $ 57,019 (1) Includes the following items for the three months ended March 31, 2026 and 2025: (i) depreciation and amortization expense of $52,289 and $59,562, (ii) lease intangible amortization of $337 and $3,206 and (iii) amortization for lease incentives of $6,887 and $5,619, respectively. (2) Includes the following items for the three months ended March 31, 2026 and 2025: (i) net income of $7,637 and net loss of $664, (ii) interest expense of $3,496 and $0, (iii) depreciation and amortization expense of $9,067 and $158, (iv) acquisition and transaction expenses of $0 and $547, and (v) tax expense of $27 and $0, respectively. (3) Excludes 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. Revenues Comparison of the three months ended March 31, 2026 and 2025 Total revenues increased by $328.6 million, driven by the following: • Aerospace products revenue increased by $258.2 million, primarily due to a $246.8 million increase in CFM56-5B, CFM56-7B and V2500 engine and module sales. • MRE Contract revenue increased by $120.6 million, primarily due to an increase in engine and module sales made to the 2025 Partnership. • Lease income decreased by $28.5 million, primarily due to decreases in aircraft lease revenue of $24.9 million, driven by the sale of Seed Assets to the 2025 Partnership. • Maintenance revenue decreased by $19.0 million, due to decreases in aircraft maintenance revenue of $8.1 million and engine maintenance revenue of $10.9 million, both driven by a decrease in revenue generating assets on lease. Expenses Comparison of the three months ended March 31, 2026 and 2025 Total expenses increased by $309.2 million, driven by the following: • Cost of sales increased by $275.6 million, primarily due to increases in CFM56-5B, CFM56-7B and V2500 engine and module sales, and parts inventory sales, which directly corresponds to components of increases in Aerospace products revenue over the same period. • Operating expenses increased by $32.5 million, primarily due to increases in compensation and benefits expense and shipping and logistics expense across our operating segments, as well as increased technology development costs and general operating expense resulting from acquisitions in the second half of 2025. Other (expense) income Comparison of the three months ended March 31, 2026 and 2025 Total other expense decreased by $24.7 million driven by the following: • Other income increased $14.5 million, driven by an increase in insurance proceeds in the current period. 31 • Equity in losses of unconsolidated entities increased by $5.3 million, driven by net income realized by the 2025 Partnership. • Gain on sale to the 2025 Partnership increased by $4.3 million, resulting from the sale of 9 aircraft to the 2025 Partnership within the Aviation Leasing Segment. Provision for income taxes The provision for income taxes increased $8.6 million for the three months ended March 31, 2026, as compared to the prior period, primarily driven by higher income generated in the Aerospace Products segment within taxable jurisdictions. Net income Net income increased by $35.5 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA increased by $57.0 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above. 32 Aerospace Products Segment The Aerospace Products segment, through our maintenance facilities and joint ventures, among other investments, develops and manufactures, repairs/refurbishes, and sells aircraft engines and aftermarket components primarily for the CFM56-7B, CFM56-5B, and V2500 commercial aircraft engines. Our engine, module, and parts sales are facilitated through a dedicated commercial maintenance program designed to focus on modular and parts repair and refurbishment of CFM56-7B and CFM56-5B engines. In addition, other serviceable used modules and parts are sold through our exclusive partnership, which is responsible for the teardown, repair, marketing, and sales of parts from our CFM56 engine pool. In 2023, we acquired the remaining interest in Quick Turn Engine Center LLC (“QuickTurn”), a dedicated hospital maintenance and testing facility specializing in the CFM56-7B and CFM56-5B engines. In 2024, we acquired Lockheed Martin Commercial Engine Solutions (“LMCES”) to establish permanent engine and module manufacturing capabilities. In 2025, we entered into an agreement within our MRE business to supply replacement aircraft engines and modules for the life of the 2025 Partnership. We also acquired Pacific Aerodynamic Inc. (“Pac Aero”), a specialist in CFM56 compressor blade and vane repairs, expanding our repair capabilities, and the MRE business of AerotechOPS (“ATOPS”), expanding our MRE business in Miami. Additionally, we maintain a (i) 25% equity interest in the Advanced Engine Repair joint venture, which focuses on developing innovative cost-saving programs for engine repairs, (ii) 50% equity interest in QuickTurn Europe, which operates as a dedicated maintenance, repair, and overhaul facility for CFM56 engines, and (iii) 50% equity interest in Prime Engine Accessories LLC, which focuses on developing in-house CFM56 accessory maintenance repairs. The following table presents our results of operations: Three Months Ended March 31, Change (in thousands) 2026 2025 Revenues Aerospace products revenue $ 522,585 $ 264,425 $ 258,160 MRE Contract revenue 221,230 100,638 120,592 Total revenues 743,815 365,063 378,752 Expenses Cost of sales 511,012 228,755 282,257 Operating expenses 10,839 5,687 5,152 Acquisition and transaction expenses (15) 1,132 (1,147) Depreciation and amortization 4,678 3,584 1,094 Total expenses 526,514 239,158 287,356 Other income (expense) Equity in (losses) earnings of unconsolidated entities (40) 113 (153) Other income 171 — 171 Total other income 131 113 18 Income before income taxes 217,432 126,018 91,414 Provision for income taxes 33,697 19,375 14,322 Net income attributable to shareholders $ 183,735 $ 106,643 $ 77,092 33 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Three Months Ended March 31, Change (in thousands) 2026 2025 Net income attributable to shareholders $ 183,735 $ 106,643 $ 77,092 Add: Provision for income taxes 33,697 19,375 14,322 Add: Equity-based compensation expense 27 155 (128) Add: Acquisition and transaction expenses (15) 1,132 (1,147) Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — — — Add: Asset impairment charges — — — Add: Incentive allocations — — — Add: Depreciation and amortization expense 4,678 3,584 1,094 Add: Interest expense and dividends on preferred shares — — — Add: Internalization fee to affiliate — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (1) 414 169 245 Less: Equity in losses (earnings) of unconsolidated entities 40 (113) 153 Adjusted EBITDA (non-GAAP) $ 222,576 $ 130,945 $ 91,631 (1) Includes the following items for the three months ended March 31, 2026 and 2025: (i) net loss of $40 and net income of $113, (ii) depreciation and amortization expense of $427 and $56, and (iii) tax expense of $27 and $0, respectively. Revenues Comparison of the three months ended March 31, 2026 and 2025 Total revenues increased by $378.8 million, due to the following: • Aerospace Products revenue increased by $258.2 million, primarily due to a $246.8 million increase in CFM56-5B, CFM56-7B and V2500 engine and module sales. • MRE Contract revenue increased by $120.6 million, primarily due to an increase in engine and module sales made to the 2025 Partnership. Expenses Comparison of the three months ended March 31, 2026 and 2025 Tota l expenses increased by $287.4 million, due to the following: • Cost of sales increased by $282.3 million, primarily due to increases in CFM56-5B, CFM56-7B and V2500 engine and module sales and parts inventory sales, which directly corresponds to components of increases in Aerospace products revenue over the same period. • Operating expenses increased by $5.2 million, primarily due to higher operating expenses due to the acquisition of ATOPS, compensation and benefits expense due to increased headcount at the Company’s maintenance facilities, as well as an increase in shipping and logistics expense. Provision for income taxes The provision for income taxes increased by $14.3 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the increase in income discussed above from Aerospace Products activities in jurisdictions subject to taxes. Net income Net income increased $77.1 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITD A increased $91.6 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above. 34 Aviation Leasing Segment As of March 31, 2026, in our Aviation Leasing segment, we own and manage 230 aviation assets, consisting of 29 commercial aircraft and 201 engines. As of March 31, 2026, 26 of our commercial aircraft and 114 of our engines were leased to operators or other third parties. Aviation assets currently off lease are either undergoing repair and/or maintenance, being prepared to go on lease or held in short term storage awaiting a future lease. Our aviation equipment was approximately 73% utilized during the three months ended March 31, 2026, based on the percent of days on-lease in the quarter weighted by the monthly average equity value of our aviation leasing equipment, excluding airframes. Our aircraft currently have a weighted average remaining lease term of 37 months, and our engines currently on-lease have an average remaining lease term of 38 months. The table below provides additional information on the assets in our Aviation Leasing segment, including transfers which involve aircraft breakdowns, engine transfers from leasing equipment to inventory for manufacturing and sales, and engine transfers from inventory to leasing equipment for rebuilding and sales: Aviation Assets Widebody Narrowbody Total Aircraft Assets at January 1, 2026 5 42 47 Purchases — — — Sales — (9) (9) Transfers — (1) (1) Insurance settlement - Russia assets (3) (5) (8) Assets at March 31, 2026 2 27 29 Engines Assets at January 1, 2026 18 225 243 Purchases 1 9 10 Sales — (1) (1) Transfers (1) (33) (34) Insurance settlement - Russia assets (10) (7) (17) Assets at March 31, 2026 8 193 201 35 The following table presents our results of operations for our Aviation Leasing segment: Three Months Ended March 31, Change (in thousands) 2026 2025 Revenues Lease income $ 39,892 $ 68,440 $ (28,548) Maintenance revenue 30,599 49,607 (19,008) Asset sales revenue 10,184 18,939 (8,755) Other revenue (1) 6,207 27 6,180 Total revenues 86,882 137,013 (50,131) Expenses Cost of sales 13,256 19,959 (6,703) Operating expenses 10,275 7,426 2,849 Acquisition and transaction expenses 4,186 2,905 1,281 Depreciation and amortization 46,485 55,061 (8,576) Total expenses 74,202 85,351 (11,149) Other income (expense) Equity in earnings (losses) of unconsolidated entities 7,677 (777) 8,454 Gain on sale to the 2025 Partnership 15,168 10,870 4,298 Other income 47,239 32,619 14,620 Total other income 70,084 42,712 27,372 Income before income taxes 82,764 94,374 (11,610) Provision for income taxes 18,326 17,348 978 Net income attributable to shareholders $ 64,438 $ 77,026 $ (12,588) (1) Includes servicing fees of $5,861 and $0 for the three months ended March 31, 2026 and 2025, respectively, from the 2025 Partnership. 36 The following table sets forth a reconciliation of net income attributable to shareholders to Adjusted EBITDA: Three Months Ended March 31, Change (in thousands) 2026 2025 Net income attributable to shareholders $ 64,438 $ 77,026 $ (12,588) Add: Provision for income taxes 18,326 17,348 978 Add: Equity-based compensation expense 164 175 (11) Add: Acquisition and transaction expenses 4,186 2,905 1,281 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — — — Add: Asset impairment charges — — — Add: Incentive allocations — — — Add: Depreciation and amortization expense (1) 53,709 63,886 (10,177) Add: Interest expense and dividends on preferred shares — — — Add: Internalization fee to affiliate — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) 19,813 (128) 19,941 Less: Equity in (earnings) losses of unconsolidated entities (7,677) 777 (8,454) Adjusted EBITDA (non-GAAP) $ 152,959 $ 161,989 $ (9,030) (1) Includes the following items for the three months ended March 31, 2026 and 2025: (i) depreciation expense of $46,485 and $55,061, (ii) lease intangible amortization of $337 and $3,206 and (iii) amortization for lease incentives of $6,887 and $5,619, respectively. (2) Includes the following items for the three months ended March 31, 2026 and 2025: (i) net income of $7,677 and net loss of $777, (ii) interest expense of $3,496 and $0, (iii) depreciation and amortization of $8,640 and $102, and (iv) acquisition and transaction expense of $0 and $547, respectively. Revenues Comparison of the three months ended March 31, 2026 and 2025 Total reven ue decreased by $50.1 million, driven by the following: • Lease income decreased by $28.5 million, primarily due to decreases in aircraft lease revenue of $24.9 million, driven by the sale of Seed Assets to the 2025 Partnership. • Maintenance revenue decreased by $19.0 million, due to decreases in aircraft maintenance revenue of $8.1 million and engine maintenance revenue of $10.9 million, both driven by a decrease in revenue generating assets on lease. • Asset sales revenue decreased by $8.8 million, primarily due to an overall decrease in the number of sales transactions of commercial aircraft and engines in the current period as compared to the prior period. • Other revenue increased by $6.2 million, primarily as a result of servicing fees earned in our capacity as the Servicer to the 2025 Partnership. Expenses Comparison of the three months ended March 31, 2026 and 2025 Total expenses decreased by $11.1 million, driven by the following: • Depreciation and amortization expense decreased by $8.6 million, primarily driven by the sale of Seed Assets to the 2025 Partnership. • Cost of sales decreased by $6.7 million, primarily due to the decrease in asset sales noted above. • Operating expense increased by $2.8 million, primarily driven by increases in compensation and benefits, equipment leases, and shipping and logistics expenses. Other income (expense) Comparison of the three months ended March 31, 2026 and 2025 Total other income increased by $27.4 million, primarily due (i) a $14.5 million increase in insurance settlements, (ii) an $8.5 million increase in equity in earnings of unconsolidated entities as a result of net income earned by the 2025 Partnership, and (iii) a $4.3 million increase in gain on sale to the 2025 Partnership, driven by the sale of Seed Assets to the 2025 Partnership. 37 Provision for income taxes The provision for income taxes decreased by $1.0 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the respective changes in income discussed above from leasing activities in jurisdictions subject to taxes. Net income Net income decreased by $12.6 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITD A decreased by $9.0 million for the three months ended March 31, 2026, as compared to the prior period, primarily due to the changes noted above. Corporate and Other The following table presents our results of operations: Three Months Ended March 31, Change (in thousands) 2026 2025 Revenues Other revenue $ — $ 4 $ (4) Total revenues — 4 (4) Expenses Operating expenses 43,873 19,325 24,548 General and administrative 2,413 3,116 (703) Acquisition and transaction expenses 12,190 3,255 8,935 Depreciation and amortization 1,126 917 209 Total expenses 59,602 26,613 32,989 Other (expense) income Interest expense (61,407) (62,040) 633 Other income 172 452 (280) Total other expense (61,235) (61,588) 353 Loss before income taxes (120,837) (88,197) (32,640) Benefit from income taxes (20,563) (13,864) (6,699) Net loss (100,274) (74,333) (25,941) Less: Dividends on preferred shares 3,709 6,327 (2,618) Less: Loss on redemption of preferred shares — 6,115 (6,115) Net loss attributable to shareholders $ (103,983) $ (86,775) $ (17,208) 38 The following table sets forth a reconciliation of net loss attributable to shareholders to Adjusted EBITDA: Three Months Ended March 31, Change (in thousands) 2026 2025 Net loss attributable to shareholders $ (103,983) $ (86,775) $ (17,208) Add: Benefit from income taxes (20,563) (13,864) (6,699) Add: Equity-based compensation expense 6,156 4,559 1,597 Add: Acquisition and transaction expenses 12,190 3,255 8,935 Add: Losses on the modification or extinguishment of debt and preferred shares and capital lease obligations — 6,327 (6,327) Add: Asset impairment charges — — — Add: Incentive allocations — — — Add: Depreciation and amortization expense 1,126 917 209 Add: Interest expense and dividends on preferred shares 65,116 68,155 (3,039) Add: Internalization fee to affiliate — — — Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities — — — Less: Equity in losses (earnings) of unconsolidated entities — — — Adjusted EBITDA (non-GAAP) $ (39,958) $ (17,426) $ (22,532) Expenses Comparison of the three months ended March 31, 2026 and 2025 Total expens es increased by $33.0 million, primarily due to the following: • Operating expenses increased $24.5 million, primarily due to an increase in compensation and benefits expense due to an increase in employee headcount and increased overall compensation, technology development costs and general corporate expenses. • Acquisition and transaction expense increased $8.9 million, primarily due to higher professional fees associated with acquisitions and transactions. Benefit from income taxes The benefit from income taxes increased by $6.7 million for the three months ended March 31, 2026, as compared to the prior period. The increase was mainly driven by higher corporate overhead expenses deductible for 2026 tax purposes. Net loss Net loss increased by $25.9 million during the three months ended March 31, 2026, respectively, as compared to the prior period, primarily due to the changes noted above. Adjusted EBITDA (Non-GAAP) Adjusted EBITDA decreased by $22.5 million during the three months ended March 31, 2026, respectively, as compared to the prior period, primarily due to the changes noted above. 39 Liquidity and Capital Resources We believe we have sufficient liquidity to satisfy our cash needs, however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate during various environments. This includes limiting discretionary spending across the organization and re-prioritizing our investments as necessary. On December 30, 2024, the Company announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The Strategic Capital Initiative, and its related partnerships, allows the Company to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The first partnership under the initiative, the 2025 Partnership, focuses on acquiring 737NG and A320ceo aircraft. The 2025 Partnership completed its fundraise in October 2025 with $2.0 billion of equity commitments. The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft. The Company, as the Servicer, manages the aircraft in the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services. 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 Our principal uses of liquidity have been and continue to be (i) acquisitions of aircraft and engines, (ii) dividends to our ordinary and preferred shareholders, (iii) expenses associated with our operating activities, and (iv) debt service obligations associated with our investments. • Cash used for the purpose of making investments was $133.6 million and $339.4 million during the three months ended March 31, 2026 and 2025, respectively. • Distributions to shareholders, including cash dividends, were $44.7 million and $36.9 million during the three months ended March 31, 2026 and 2025, respectively. • Uses of liquidity associated with our operating expenses are captured on a net basis in our cash flows from operating activities. Uses of liquidity associated with our debt obligations are captured in our cash flows from financing activities. Our principal sources of liquidity to fund these uses have been and continue to be (i) revenues from our aviation assets (including finance lease collections and maintenance reserve collections) net of operating expenses, (ii) proceeds from borrowings or the issuance of securities and (iii) proceeds from asset sales. • Cash flows from operating activities, plus the principal collections on finance leases and maintenance reserve collections were $152.6 million and $11.0 million during the three months ended March 31, 2026 and 2025, respectively. • During the three months ended March 31, 2026, additional borrowings and total principal repayments in connection with the Revolving Credit Facility were $125.0 million and $125.0 million, respectively. During the three months ended March 31, 2025, additional borrowings and total principal repayments in connection with the Revolving Credit Facility were $290.0 million and $90.0 million, respectively. • Proceeds from the sale of assets were $409.6 million and $263.1 million during the three months ended March 31, 2026 and 2025, respectively. We are currently evaluating several potential transactions and related financings, including, but not limited to, certain additional debt and equity financings, which could occur within the next 12 months. None of these potential transactions, negotiations, or financings are definitive or included within our planned liquidity needs. We cannot assure if or when any such transaction will be consummated or the terms of any such transaction or related financing. Historical Cash Flow Comparison of the three months ended March 31, 2026 and 2025 The following table compares the historical cash flow for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (in thousands) 2026 2025 Cash Flow Data: Net cash used in operating activities $ (160,076) $ (25,966) Net cash provided by (used in) investing activities 317,018 (27,627) Net cash (used in) provided by financing activities (45,178) 50,610 Net cash used in operating activities increased $134.1 million, primarily reflecting an increase in our Net income of $35.5 million and certain adjustments to reconcile net income to cash used in operating activities, including an: • increase in Gain on sale of assets of $84.0 million • decrease in Changes in net working capital of $49.3 million, • increase in Gain on insurance recoveries of $14.5 million, 40 • decrease in Deferred income taxes of $8.5 million • decrease in Depreciation and amortization of $7.3 million, and • increase in Gain on sale of assets to the 2025 Partnership of $4.3 million. Net cash provided by investing activities increased $344.6 million, primarily due to an: • decrease in Acquisition of leasing equipment of $179.6 million, • increase in Proceeds from the sale of assets of $118.2 million, • increase in Proceeds from the sale of assets to the 2025 partnership of $58.5 million, and • decrease in Investment in unconsolidated entities of $18.7 million. • decrease in Deposits for acquisition of leasing equipment of $9.2 million; partially offset by • decrease in Return of deposits for acquisition of leasing equipment of $38.9 million. Net cash used in financing activities increased $95.8 million, primarily due to a: • decrease in Proceeds from debt of $165.0 million, • increase in Repayment of debt of $35.0 million, • increase in cash dividends on ordinary shares of $10.3 million, and • decrease in receipt of maintenance deposits under operating lease agreements of $7.5 million; partially offset by, • decrease in Redemption of preferred shares of $124.2 million. Contractual Obligations Our material cash requirements include the following contractual and other obligations: Debt Obligations — As of March 31, 2026, we had outstanding principal and interest payment obligations of $3.5 billion and $1.1 billion, respectively, of which only interest payments of $228.8 million are due in the next twelve months. Refer to Note 6, “Debt” in our “Notes to Consolidated Financial Statements” for additional information about our debt obligations. Lease Obligations —As of March 31, 2026, we had outstanding operating and finance lease obligations of $45.4 million, of which $8.2 million is due in the next twelve months. Other Cash Requirements —In addition to our contractual obligations, we pay quarterly cash dividends on our ordinary shares and preferred shares, which are subject to change at the discretion of our Board of Directors. During the last twelve months, we declared cash dividends of $138.5 million and $14.8 million on our ordinary shares and preferred shares, respectively. We expect to meet our future short-term liquidity requirements through cash on hand, unused borrowing capacity or future financings and net cash provided by our current operations. We expect that our operating subsidiaries will generate sufficient cash flow to cover operating expenses and the payment of principal and interest on our indebtedness as they become due. We may elect to meet certain long-term liquidity requirements or to continue to pursue strategic opportunities through utilizing cash on hand, cash generated from our current operations and the issuance of securities in the future. Management believes adequate capital and borrowings are available from various sources to fund our commitments to the extent required. Critical Accounting Estimates and Policies There were no material changes to our critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2025. Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies” in our “Notes to Consolidated Financial Statements” for recent accounting pronouncements.