SEC EDGAR · 10-Q

10-Q – 2026-05-01 – ftai-20260331.htm

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Omsättning

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 58
Revenues | Aerospace products revenue 2 $ 522,585 $ 264,425 | MRE Contract revenue 2, 10 221,230 100,638
Aerospace products revenue 2 $ 522,585 $ 264,425 | MRE Contract revenue 2, 10 221,230 100,638 | Lease income 2 39,892 68,440
Lease income 2 39,892 68,440 | Maintenance revenue 2 30,599 49,607 | Asset sales revenue 2 10,184 18,939
Maintenance revenue 2 30,599 49,607 | Asset sales revenue 2 10,184 18,939 | Other revenue (1)
Asset sales revenue 2 10,184 18,939 | Other revenue (1) | 6,207 31
Expenses | Cost of sales 524,268 248,714 | Operating expenses 2 64,987 32,438
(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.

EBITDA

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 in
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 in | 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 shar
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 in | 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 shar
The following table sets forth a reconciliation of net income (loss) attributable to shareholders to Adjusted EBITDA:
Add: Internalization fee to affiliate — — — | Add: Pro-rata share of Adjusted EBITDA from unconsolidated entities (2) | 20,227 41 20,186
Adjusted EBITDA (non-GAAP) $ 325,577 $ 268,558 $ 57,019
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.
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

Periodens resultat

9 31,460 22,859 | Net income | 137,899 102,386
Less: Loss on redemption of preferred shares — 6,327 | Net income attributable to shareholders | $ 134,190 $ 89,944
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
Equity - December 31, 2024 $ 1,026 $ 117 $ 153,328 $ ( 73,103 ) $ 81,368 | Net income | 102,386 102,386
Cash flows from operating activities: | Net income $ 137,899 $ 102,386 | Adjustments to reconcile net income to net cash used in 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)
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.
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 allocatio | 20

Resultat per aktie

Note 12: Earnings per Share and Equity | 27
Earnings per share: | 12
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 %).
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, 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.
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.
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):
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):

Kassaflöde

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 | 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.
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
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:
(in thousands) 2026 2025 | Cash Flow Data: | Net cash used in operating activities $ (160,076) $ (25,966)
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 cas
Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. Interest rate risk is highly sensitive to many factors, including the U.S. government’s monetary and tax policies, global economic factors and other factors beyond our control. We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposure relates to our R | Certain borrowing agreements of ours require payments based on a variable interest rate index, such as SOFR. Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our leases. We may elect to manage our exposure to interest rate movements through the use of interest rate derivatives (interest rate swaps and caps). | The following discussion about the potential effects of changes in interest rates is based on a sensitivity analysis, which models the effects of hypothetical interest rate shifts on our financial condition and results of operations. Although we believe a sensitivity analysis provides the most meaningful analysis permitted by the rules and regulations of the SEC, it is constrained by several factors, including the necessity to conduct the analysis based on a single point in time and by the inabi
• increases in supply levels of assets in the market due to the sale or merging of operating lessors. | These and other related factors are generally outside of our control and could lead to (i) persistence of, or increase in, the oversupply of the types of assets that we acquire, maintain, repair or exchange or (ii) decreased utilization of our assets, either of which could materially adversely affect our results of operations and cash flow. | 43
We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness. | As of March 31, 2026, we had $3.5 billion of indebtedness outstanding. Our ability to make payments on our indebtedness depends on our ability to generate cash flow in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient free cash flow to satisfy our debt obligations, including interest payments and the payment of principal at maturity, we may

Fritt kassaflöde

We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness. | As of March 31, 2026, we had $3.5 billion of indebtedness outstanding. Our ability to make payments on our indebtedness depends on our ability to generate cash flow in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient free cash flow to satisfy our debt obligations, including interest payments and the payment of principal at maturity, we may
We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness. | As of March 31, 2026, we had $3.5 billion of indebtedness outstanding. Our ability to make payments on our indebtedness depends on our ability to generate cash flow in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient free cash flow to satisfy our debt obligations, including interest payments and the payment of principal at maturity, we may | Our use of joint ventures or partnerships may present unforeseen obstacles or costs.

Likvida medel

Current Assets | Cash and cash equivalents 2 $ 412,240 $ 300,476 | Accounts receivable, net (1)
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
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
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
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 impa | 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.
• 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
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:

Nettoskuld

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)
Other liabilities 23,536 ( 3,460 ) | Net cash used in operating activities ( 160,076 ) ( 25,966 )
5,430 44,303 | Net cash provided by (used in) investing activities $ 317,018 $ ( 27,627 )
Cash dividends - preferred shares ( 3,709 ) ( 6,115 ) | Net cash (used in) provided by financing activities $ ( 45,178 ) $ 50,610
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 | 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 mark | 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.
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 | 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.
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 | 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 transf
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 transf | 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.

Eget kapital

Retained earnings 375,671 282,513 | Shareholders' equity 431,676 334,174 | Total liabilities and equity $ 4,528,911 $ 4,373,758

Antal aktier

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ | There were 102,582,972 ordinary shares outstanding at April 29, 2026.
Weighted average shares outstanding: | Basic 102,575,500 102,552,436
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):
$ 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
Weighted Average Ordinary Shares Outstanding - Basic 102,575,500 102,552,436 | Weighted Average Ordinary Shares Outstanding - Diluted 104,255,902 103,159,051

Antal anställda

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.
Options | During the three months ended March 31, 2026 and 2025, the Company did not issue any options to employees. | 18
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 %).
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
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.
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.
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 cr | 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, includi | The following table summarizes the Company’s reimbursements to the Former Manager (unaudited):
We could be negatively impacted by environmental, social, and governance (ESG) and sustainability-related matters. | Governments, investors, customers, lessees, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving. We have announced, and may in the future announce, sustainability-focused investments, partnerships and other initiatives and goals. These initiatives, aspirations, targets or objectives reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Our efforts | In addition, the standards for tracking and reporting on ESG matters are relatively new, have not been harmonized and continue to evolve. Our selection of disclosure frameworks that seek to align with various voluntary reporting standards may change from time to time and may result in a lack of comparative data from period to period. Moreover, our processes and controls may not always align with evolving voluntary standards for identifying, measuring, and reporting ESG metrics, our interpretatio

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

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

For the quarterly period ended  March 31, 2026
OR

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

For the transition period from ____ to ____
Commission file number 001-37386

FTAI AVIATION LTD.
(Exact name of registrant as specified in its charter)

Cayman Islands 98-1420784
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

405 West 13th Street, 3rd Floor New York NY 10014
(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code)  ( 332 ) 239-7600
(Former name, former address and former fiscal year, if changed since last report) N/A
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Trading Symbol: Name of exchange on which registered:
Ordinary shares, $0.01 par value per share FTAI The Nasdaq Global Select Market
8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares FTAIN The Nasdaq Global Select Market
9.50% F ixed-Rate Reset Series D Cumulative Perpetual Redeemable Preferred Shares
FTAIM The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   þ No  ¨  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   þ No  ¨  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company ¨
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No  þ
There were 102,582,972 ordinary shares outstanding at April 29, 2026.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact but instead are based on our present beliefs and assumptions and on information currently available to us. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us, that the future plans, estimates or expectations contemplated by us will be achieved.
Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. The following is a summary of the principal risk factors that make investing in our securities risky and may materially adversely affect our business, financial condition, results of operations and cash flows. This summary should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in Part II, Item 1A. “Risk Factors” of this report. We believe that these factors include, but are not limited to:
• changes in economic conditions generally and specifically in our industry sectors, and other risks relating to the global economy, including, but not limited to, the Russia-Ukraine conflict, war in the Middle East, and any related responses or actions by businesses and governments;
• reductions in cash flows received from our assets, as well as contractual limitations on the use of our aviation assets to secure debt for borrowed money;
• our ability to take advantage of acquisition opportunities at favorable prices;
• our ability to realize the anticipated benefits of our strategic initiatives;
• a lack of liquidity surrounding our assets, which could impede our ability to vary our portfolio in an appropriate manner;
• the relative spreads between the yield on the assets we acquire and the cost of financing;
• adverse changes in the financing markets we access affecting our ability to finance our acquisitions;
• customer or lessee defaults on their obligations;
• our ability to renew existing contracts and enter into new contracts with existing or potential lessees;
• the availability and cost of capital for future acquisitions;
• risks involving our Strategic Capital Initiative;
• concentration of a particular type of asset or in a particular sector;
• competition within the aviation industry;
• the competitive market for acquisition opportunities;
• risks related to operating through joint ventures, partnerships, consortium arrangements or other collaborations with third parties;
• our ability to successfully integrate acquired businesses;
• obsolescence of our assets or our ability to sell, re-lease or re-charter our assets;
• exposure to uninsurable losses and force majeure events;
• the impact of trade disputes, including the imposition of new or increased tariffs, sanctions or other restrictions, and the legislative/regulatory environment and exposure to increased economic regulation;
• exposure to the oil and gas industry’s volatile oil and gas prices;
• difficulties in obtaining effective legal redress in jurisdictions in which we operate with less developed legal systems;
• our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”) and the fact that maintaining such exemption imposes limits on our operations;
• our ability to successfully utilize leverage in connection with our investments;
• foreign currency risk and risk management activities;
• effectiveness of our internal control over financial reporting;
• exposure to environmental risks, including natural disasters, increasing environmental legislation and the broader impacts of climate change;
• changes in interest rates and/or credit spreads, as well as the success of any hedging strategy we may undertake in relation to such changes;
• actions taken by national, state, or provincial governments, including nationalization, or the imposition of new taxes, could materially impact the financial performance or value of our assets;
2

• our ability to attract and retain highly skilled management and other personnel;
• volatility in the market price of our shares;
• the inability to pay dividends to our shareholders in the future;
• impacts from our past and future acquisitions, and our ability to successfully integrate acquired assets and assumed liabilities; and
• other risks described in the “Risk Factors” section of this report.
These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We do not undertake any obligation to publicly update or review any forward-looking statement except as required by law, whether as a result of new information, future developments or otherwise.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.
3

FTAI AVIATION LTD.
INDEX TO FORM 10-Q

PART I - FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements of FTAI Aviation Ltd.
5

Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025
5

Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025
6

Consolidated Statements of Changes in Equity for the three months ended March 31, 2026 and 2025
7

Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025
8

Notes to Consolidated Financial Statements
10

Note 1: Organization
10

Note 2: Summary of Significant Accounting Policies
10

Note 3: Leasing Equipment, net
14

Note 4: Investments
15

Note 5: Intangible Assets and Liabilities, net
16

Note 6: Debt, net
17

Note 7: Fair Value Measurements
17

Note 8: Equity-Based Compensation
18

Note 9: Income Taxes
19

Note 10: Affiliate Transactions and Former Management Agreement
20

Note 11: Segment Information
22

Note 12: Earnings per Share and Equity
27

Note 13: Commitments and Contingencies
27

Note 14: Subsequent Events
27

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
28

Item 3. Quantitative and Qualitative Disclosures About Market Risk
41

Item 4. Controls and Procedures
42

PART II - OTHER INFORMATION
Item 1. Legal Proceedings
42

Item 1A. Risk Factors
42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
58

Item 3. Defaults Upon Senior Securities
58

Item 4. Mine Safety Disclosures
58

Item 5. Other Information
58

Item 6. Exhibits
59

4

PART I—FINANCIAL INFORMATION
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

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of changes in value of a financial instrument, caused by fluctuations in interest rates and foreign exchange rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. We are exposed to the market risks described below.
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Interest Rate Risk
Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. Interest rate risk is highly sensitive to many factors, including the U.S. government’s monetary and tax policies, global economic factors and other factors beyond our control. We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposure relates to our Revolving Credit Facility.
Certain borrowing agreements of ours require payments based on a variable interest rate index, such as SOFR. Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our leases. We may elect to manage our exposure to interest rate movements through the use of interest rate derivatives (interest rate swaps and caps).
The following discussion about the potential effects of changes in interest rates is based on a sensitivity analysis, which models the effects of hypothetical interest rate shifts on our financial condition and results of operations. Although we believe a sensitivity analysis provides the most meaningful analysis permitted by the rules and regulations of the SEC, it is constrained by several factors, including the necessity to conduct the analysis based on a single point in time and by the inability to include the extraordinarily complex market reactions that normally would arise from the market shifts modeled. Although the following results of a sensitivity analysis for changes in interest rates may have some limited use as a benchmark, they should not be viewed as a forecast. This forward-looking disclosure also is selective in nature and addresses only the potential interest expense impacts on our financial instruments and, in particular, does not address the mark-to-market impact on our interest rate derivatives, if any. It also does not include a variety of other potential factors that could affect our business as a result of changes in interest rates.
As of March 31, 2026, assuming we do not hedge our exposure to interest rate fluctuations related to our outstanding floating rate debt, a hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would not have increased or decreased interest expense over the next 12 months.

Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of and for the period covered by this report.
Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings
We are and may become involved in legal proceedings, including but not limited to regulatory investigations and inquiries, in the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of any litigation, regulatory investigation or inquiry, in the opinion of management, we do not expect our current and any threatened legal proceedings to have a material adverse effect on our business, financial position or results of operations. Given the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material adverse effect on our financial results.

Item 1A. Risk Factors
You should carefully consider the following risks and other information in this Form 10-Q in evaluating us and our shares. Any of the following risks, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, could materially and adversely affect our results of operations or financial condition. The risk factors generally have been separated into the following categories: risks related to our business, risks related to taxation and risks related to the Company’s shares. However, these categories do overlap and should not be considered exclusive.
Risks Related to Our Business
Uncertainty relating to macroeconomic conditions, including those that affect the commercial aviation industry, may reduce the demand for our assets, result in non-performance of contracts by our lessees or charterers, limit our ability to obtain additional capital to finance new investments, or have other unforeseen negative effects.
Uncertainty and negative trends in general economic conditions in the United States and abroad, including significant tightening of credit markets and commodity price volatility, historically have created and continue to create difficult operating environments
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for owners and operators in the aviation industry. As a provider of products and services to the commercial aviation industry, we are greatly affected by the overall economic conditions and other trends that affect our customers and lessees in that industry, including any projected market growth that may not materialize or be sustainable and any lasting effects of tariffs. The commercial aviation industry is historically cyclical and has been negatively affected in the past, and could be negatively affected in future periods, by geopolitical events, natural disasters, pandemics, supply chain disruptions, labor issues, environmental concerns (including climate change), lack of capital, cost inflation, and weak or volatile economic conditions. A number of governments have implemented, or are considering implementing, a broad variety of governmental actions or new regulations for the financial markets and international trade. In addition, limitations on the availability of capital, higher costs of capital for financing expenditures or the desire to preserve liquidity, may cause our current or prospective customers and lessees to make reductions in future capital budgets and spending.
Further, demand for our assets is related to passenger and cargo traffic growth, which in turn is dependent on general business and economic conditions. Global economic downturns could have an adverse impact on passenger and cargo traffic levels and consequently our customers’ and lessees’ business, which may in turn result in a significant reduction in revenues, earnings and cash flows, difficulties accessing capital and a deterioration in the value of our assets. We have in the past been exposed to increased credit risk from our customers and lessees and third parties who have obligations to us, which resulted in non-performance of contracts by our customers and lessees and adversely impacted our business, financial condition, results of operations and cash flows. We cannot assure you that similar loss events may not occur in the future.
Instability in geographies where we have assets or where we derive revenue could have a material adverse effect on our business, customers, lessees, operations and financial results.
Economic, civil, military and political uncertainty exists and may increase in regions where we operate and derive our revenue. Various countries in which we operate are experiencing and may continue to experience military action and civil and political unrest. We have assets in the emerging market economies of Eastern Europe and in the Middle East, including some assets in Russia. In late February 2022, Russian military forces launched significant military action against Ukraine. The conflict remains ongoing and sustained conflict and disruption in the region is likely. Following missile strikes in Iran in February 2026, there has been increased instability in the Middle East, and global oil prices have been fluctuating. The related regional impacts, as well as actions taken by other countries, including new and stricter export controls and sanctions by other countries and organizations against officials, individuals, regions, and industries in Russia and Ukraine and Iran, and each country’s potential response to such sanctions, tensions and military actions, could have a material adverse effect on our business and delay or prevent us from accessing certain of our assets. We are actively monitoring the security of our remaining assets in the regions.
The aviation industry has experienced periods of oversupply during which lease rates and asset values have declined, particularly during economic downturns, and any future oversupply could materially adversely affect our results of operations and cash flows.
The oversupply of a specific asset is likely to depress lease rates for and the value of that type of asset and result in decreased utilization of our assets, and the aviation industry has experienced periods of oversupply during which rates and asset values have declined, particularly during economic downturns. Factors that could lead to such oversupply include, without limitation:
• general demand for the type of assets that we purchase;
• general macroeconomic conditions, including market prices for commodities that our assets may serve;
• geopolitical events, including war, prolonged armed conflict and acts of terrorism;
• outbreaks of communicable diseases and natural disasters;
• governmental regulation, including on international trade;
• interest rates;
• the availability of credit;
• potential reduced cash flows and financial condition, including potential liquidity restraints;
• restructurings and bankruptcies of companies in the industries in which we operate, including our customers and lessees;
• manufacturer production levels and technological innovation;
• manufacturers merging or exiting the industry or ceasing to produce certain asset types;
• retirement and obsolescence of the assets that we own, maintain, repair or exchange; and
• increases in supply levels of assets in the market due to the sale or merging of operating lessors.
These and other related factors are generally outside of our control and could lead to (i) persistence of, or increase in, the oversupply of the types of assets that we acquire, maintain, repair or exchange or (ii) decreased utilization of our assets, either of which could materially adversely affect our results of operations and cash flow.
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The aviation industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer.
Governmental agencies throughout the world, including the Federal Aviation Administration (“FAA”), Transport Canada, and European Union Aviation Safety Agency, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. If any material authorization or approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.
The FAA and equivalent regulatory agencies in other jurisdictions in which we operate have increasingly focused on the need to assure that airline industry products are designed with sufficient cybersecurity controls to protect against unauthorized access or other unwanted compromise. A failure to meet these evolving expectations could negatively impact sales into the industry and expose us to legal or contractual liability.
From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which often are more stringent than existing regulations. If such proposals are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition and results of operations.
The retirement or prolonged grounding of commercial aircraft could reduce our revenues and the value of any related inventory.
We sell aircraft components and replacement parts. If aircraft or engines for which we offer aircraft components and replacement parts are retired or grounded for prolonged periods of time and there are fewer aircraft that require these components or parts, our revenues may decline as well as the value of any related inventory.
Contractual defaults may adversely affect our business, prospects, financial condition, results of operations and cash flows by decreasing revenues and increasing storage, positioning, collection, recovery and lost equipment expenses.
The success of our business depends in large part on the success of the operators in the sectors in which we participate. Cash flows from our assets are substantially impacted by our ability to collect compensation and other amounts to be paid in respect of such assets from the lessees with whom we enter into leases or other contractual arrangements with lessees or customers. Inherent in the nature of the leases and other arrangements for the use of such assets is the risk that we may not receive, or may experience delay in realizing, such amounts to be paid. While we target the entry into contracts with credit-worthy counterparties, no assurance can be given that such counterparties will perform their obligations during the term of the leases or other contractual arrangements. In addition, when counterparties default, we may fail to recover all of our assets, and the assets we do recover may be returned in damaged condition or to locations where we will not be able to efficiently lease or sell them. In most cases, we maintain, or require our lessees to maintain, certain insurances to cover the risk of damages or loss of our assets. However, these insurance policies may not be sufficient to protect us against a loss.
Depending on the specific sector, the risk of contractual defaults may be elevated due to excess capacity as a result of oversupply during the most recent economic downturn. We lease assets to our lessees pursuant to fixed-price contracts, and our lessees then seek to utilize those assets to transport goods and provide services. If the price at which our lessees receive for their transportation services decreases as a result of an oversupply in the marketplace, then our lessees may be forced to reduce their prices in order to attract business (which may have an adverse effect on their ability to meet their contractual lease obligations to us), or may seek to renegotiate or terminate their contractual lease arrangements with us to pursue a lower-priced opportunity with another lessor, which may have a direct, adverse effect on us. See “-The aviation industry has experienced periods of oversupply during which lease rates and asset values have declined, particularly during economic downturns, and any future oversupply could materially adversely affect our results of operations and cash flows.” Any default by a material customer or lessee would have a significant impact on our profitability at the time the customer or lessee defaulted, which could materially adversely affect our operating results and growth prospects. In addition, some of our counterparties may reside in jurisdictions with legal and regulatory regimes that make it difficult and costly to enforce such counterparties’ obligations.
We acquire a high concentration of CFM56-5B, CFM56-7B and V2500 engines and related parts and our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.
We acquire a high concentration of CFM56-5B, CFM56-7B and V2500 engines and related parts and our business and financial results could be adversely affected by sector-specific or asset-specific factors. If the market demand for such engines and related parts declines, it is redesigned or replaced by its manufacturer or it experiences design or technical problems, the value and rates relating to such asset may decline, and we may be unable to lease or sell such engines or related parts on favorable terms, if at all. Any decrease in the value and rates of our assets may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
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We operate in highly competitive markets.
The markets for our products and services are highly competitive. Market competition for opportunities to acquire aviation assets includes traditional transportation companies, commercial and investment banks, as well as a growing number of non-traditional participants, such as hedge funds, private equity funds and other private investors. Some of these competitors may have access to greater amounts of capital and/or to capital that may be committed for longer periods of time or may have different return thresholds than us, and thus these competitors may have certain advantages not shared by us. In addition, competitors may have incurred, or may in the future incur, leverage to finance their debt investments at levels or on terms more favorable than those available to us. Strong competition for investment opportunities could result in fewer such opportunities for us, as certain of these competitors have established and are establishing investment vehicles that target the same types of assets that we intend to purchase.
Market competition for our Aerospace Products business includes engine manufacturers, engine component and parts manufacturers, airline and aircraft service companies, companies providing maintenance, repair and overhaul services and aircraft spare parts distributors and redistributors.
Some of our competitors may have longer operating histories, greater financial resources and lower costs of capital than us, and consequently, may be able to compete more effectively in one or more of our target markets. We likely will not always be able to compete successfully with our competitors and competitive pressures or other factors may also result in significant price competition, particularly during industry downturns, which could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
The success of our Aerospace Products segment is dependent upon our ability to manage our operational footprint.
We currently perform maintenance, repair and exchange activities at our maintenance facilities in the United States, Canada and Europe. Our maintenance facilities could become unavailable either temporarily or permanently due to labor disruptions at any of our facilities or other circumstances that may be beyond our control, such as geopolitical developments or logistical complications arising from catastrophic and weather-related events.
Potential logistical complications resulting from circumstances beyond our control may include, but are not limited to, power loss, telecommunication and information systems failures, or other internal or external system or service failures, accidents or incidents arising from acts of war, terrorism, cyber-attacks, weather, global climate change, earthquakes, hurricanes, fires, floods, tornadoes, explosions or other natural disasters or pandemics, including public health crises.
If any of these events were to occur at or around any of our facilities, this could result in potential damage to physical assets and we may be unable to shift work to other facilities or to make up for lost work, which could result in a prolonged interruption of our business, significant delays in shipments of products, the loss of sales and customers and large expenses to repair or replace the facility or facilities. We may not have insurance to adequately compensate us for any of these events. If insurance or other risk transfer mechanisms, such as existing disaster recovery and business continuity plans, are insufficient to recover all costs, we could experience a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
Certain liens may arise on our assets.
Certain of our assets are currently subject to liens under our fourth amended and restated revolving credit facility (the “Revolving Credit Facility”). In the event of a default under the Revolving Credit Facility, the lenders thereunder would be permitted to take possession of or sell such assets. In addition, our currently owned assets and assets that we purchase in the future may be subject to other liens based on the industry practices relating to such assets. Until they are discharged, these liens could impair our ability to repossess, re-lease or sell our assets, and to the extent our lessees do not comply with their obligations to discharge any liens on the applicable assets, we may find it necessary to pay the claims secured by such liens in order to repossess such assets. Such payments could materially adversely affect our operating results and growth prospects.
The values of our assets may fluctuate due to various factors.
The fair market values of our assets may decrease or increase depending on a number of factors, including the prevailing level of charter or lease rates from time to time, general economic and market conditions affecting our target markets, type and age of assets, supply and demand for assets, competition, new governmental or other regulations and technological advances, all of which could impact our profitability and our ability to lease, develop, operate, or sell such assets. In addition, our assets depreciate as they age and may generate lower revenues and cash flows. We must be able to replace such older, depreciated assets with newer assets, or our ability to maintain or increase our revenues and cash flows will decline. In addition, if we dispose of an asset for a price that is less than the depreciated book value of the asset on our balance sheet or if we determine that an asset’s value has been impaired, we will recognize a related charge in our Consolidated Statement of Operations and such charge could be material.
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We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness.
As of March 31, 2026, we had $3.5 billion of indebtedness outstanding. Our ability to make payments on our indebtedness depends on our ability to generate cash flow in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient free cash flow to satisfy our debt obligations, including interest payments and the payment of principal at maturity, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot provide assurance that any refinancing would be possible, that any assets could be sold, or, if sold, of the timeliness and amount of proceeds realized from those sales, that additional financing could be obtained on acceptable terms, if at all, or that additional financing would be permitted under the terms of our various debt instruments then in effect. Furthermore, our ability to refinance would depend upon the condition of the finance and credit markets. Our inability to generate sufficient free cash flow to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms or on a timely basis, would materially affect our business, financial condition and results of operations.
Our use of joint ventures or partnerships may present unforeseen obstacles or costs.
We have acquired and may in the future acquire interests in certain assets in cooperation with third-party partners or co-investors through jointly-owned acquisition vehicles, joint ventures or other structures. In these co-investment situations, our ability to control the management of such assets depends upon the nature and terms of the joint arrangements with such partners and our relative ownership stake in the asset, each of which will be determined by negotiation at the time of the investment. Such arrangements present risks not present with wholly-owned assets, such as the possibility that a co-investor becomes bankrupt, develops business interests or goals that conflict with our interests and goals in respect of the assets, all of which could materially adversely affect our business, prospects, financial condition, results of operations and cash flows.
In addition, we expect to utilize third-party contractors to perform services and functions related to the operation and leasing of our assets. These functions may include billing, collections, recovery and asset monitoring. Because we do not directly control these third parties, there can be no assurance that the services they provide will be delivered at a level commensurate with our expectations, or at all. The failure of any such third-party contractors to perform in accordance with our expectations could materially adversely affect our business, prospects, financial condition, results of operations and cash flows.
Our Strategic Capital Initiative involves certain risks which could adversely affect our business, prospects, financial condition, results of operations and cash flows.
On December 30, 2024, we announced the launch of a Strategic Capital Initiative in collaboration with third-party institutional investors. The first partnership under the initiative, the 2025 Partnership, focuses on acquiring 737NG and A320ceo aircraft. The Strategic Capital Initiative, and its related partnerships, allow us to maintain an asset-light business model while the partnerships actively acquire on-lease narrowbody aircraft at scale. The 2025 Partnership, and follow-on partnerships, is the primary buyer of all future on-lease 737NG and A320ceo aircraft. We provide aircraft management services to the 2025 Partnership, and the Company receives customary, market-based compensation for providing such services. The Company has also made a minority capital commitment and will make additional commitments in the 2025 Partnership. We expect to provide aircraft management services to, and make minority investments in, future partnerships. Our Strategic Capital Initiative is subject to certain risks, which include, but are not limited to:
• Market Risk . Difficult market conditions may adversely affect our Strategic Capital Initiative in many ways, including by negatively impacting the 2025 Partnership and future partnerships’ ability to raise or deploy capital, lowering servicing fees and profit participation distributions, increasing the cost of financial instruments and executing transactions and adversely affecting the performance of the partnerships’ investments. In addition, market or idiosyncratic factors may make it difficult to raise new capital from investors into the Strategic Capital Initiative. Any of these circumstances could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
• Liquidity Risk . Our Strategic Capital Initiative may invest in relatively high-risk, illiquid assets and may fail to realize any profits from these activities for a considerable period of time, if at all.
• Valuation Risk . Valuation methodologies for certain assets held by our Strategic Capital Initiative are subject to significant subjectivity and the values established pursuant to such methodologies may never be realized, which could result in significant losses from our Strategic Capital Initiative.
• Key Personnel Risk . Our business and financial condition may be materially adversely impacted by the loss of any of the key investment professionals involved in our Strategic Capital Initiative. Our ability to retain and attract investment professionals is critical to the success and growth of our Strategic Capital Initiative. In addition, evaluating transactions for our Strategic Capital Initiative may divert the time and attention of our management from other parts of our business.
• Litigation Risk . One of our subsidiaries is the Servicer of the 2025 Partnership and we expect to serve as Servicer of future partnerships. As Servicer, we may be subject to the risk of litigation by third parties, including investors in our Strategic Capital Initiative dissatisfied with our management of the 2025 Partnership and future partnerships or the performance thereof.
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