FTAI Aviation Ltd.

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 hastwo 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 overone 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, Bristol and Indianapolis.

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 based on either the variable interest entity (“VIE”) model or voting interest entity (“VOE”) model. All intercompany balances and transactions have been eliminated in consolidation. All adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

When assessing an entity for consolidation, the Company first evaluates whether it has a variable interest in the entity. The Company does not consolidate any entity for which it does not have a variable interest.

The Company next determines whether the entity is a VIE. Under ASC 810-10-15-14, an entity is a VIE if, by design, (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (ii) the holders of the equity investment at risk as a group lack the power to direct the activities that most significantly affect the entity’s economic performance, the obligation to absorb its expected losses, or the right to receive its expected residual returns; or (iii) the voting rights of some investors are not proportionate to their obligations to absorb the entity’s expected losses or rights to receive its expected residual returns, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. For limited partnerships and similar entities, the holders of the equity investment at risk lack the power described in (ii) unless a simple majority or lower threshold of the limited partners (excluding the general partner, entities under common control with the general partner, and other parties acting on behalf of the general partner) hold substantive kick-out rights or participating rights. For this purpose, kick-out rights include the ability to dissolve (liquidate) the partnership without cause.

The Company consolidates a VIE when it concludes it is the primary beneficiary. The primary beneficiary is defined as the variable interest holder with (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company does not consolidate an entity if it is not deemed to be its primary beneficiary.

Entities that do not qualify as VIEs are assessed for consolidation as VOEs. The Company consolidates a VOE when the Company owns the majority of an entity’s voting interests or otherwise has the ability to control the entity. For limited partnerships in which the Company is the general partner, the Company is presumed to control the partnership unless the limited partners hold substantive kick-out or participating rights.

The Company applies the equity method of accounting for investments in entities that it does not control but over which it exercises significant influence. 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 and sale 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.

Revenues—Revenues are within the scope of ASC 606, Revenue from contracts with customersand 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 CFM56-5B, CFM56-7B and V2500 engines, engine modules, spare parts and used material inventory, and are accounted for within the scope of ASC 606. Revenue is recognized 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. In certain transactions, the Company may receive noncash consideration from a customer in the form of engines or modules. Such noncash consideration is measured at fair value at the time of the sale and is included in the transaction price used to recognize revenue. Aerospace products revenue also consists of engine management service contracts, where the Company has a stand-ready obligation to provide replacement CFM56-5B and CFM56-7B engines to customers as they become unserviceable during the contract term. The Company recognizes revenue 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 - affiliate—MRE Contract revenue - affiliate 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 and second partnership of the Strategic Capital Initiative (the “2025 Partnership” and “2026 Partnership”, respectively; collectively the “SCI Partnerships”). The net cash purchase price received by the Company is contractual and customary market-based compensation for fulfilling such performance obligations. MRE Contract revenue - affiliate 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 SCI Partnerships, along with corresponding costs of sales. Refer to Note 10 “Affiliate Transactions and Former Management Agreement” for additional information on the SCI Partnerships 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.

Servicing Fees—The Company provides services to the SCI Partnerships related to acquiring, leasing, remarketing and selling aircraft, administering leases and collections, overseeing lessee maintenance and insurance, and obtaining valuations. The Company receives customary, market-based servicing fees in exchange for the services rendered. Servicing fees are recognized over time as the services are performed and are included in Other revenue on the Company’s Consolidated Statements of Operations.

Research and Development—Research and development (“R&D”) consists of costs incurred for design and testing related to the development of aeroderivative turbines for FTAI Power. R&D costs that have no alternative use are expensed as incurred in accordance with ASC 730.

R&D expense was $22.0 million and $41.5 million for the three and nine months ended September 30, 2026, respectively (2025 - $0.0 million and $0.0 million, respectively).

Other (Expense) Income

Gain on Sale to the 2025 Partnership - affiliate—The 2025 Partnership acquired 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 and nine months ended September 30, 2026,0 and 15 aircraft were sold to the 2025 Partnership for a gain of $0.0 million and $17.6 million, respectively (2025 -8 and 45 aircraft sold for a gain of $4.6 million and $50.1 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 and nine months ended September 30, 2026, the Company recognized $0.0 million and $49.5 million, respectively (2025 - $0.0 million and $54.3 million, respectively), in insurance recoveries in connection with the settlement of claims related to the aircraft and engines located in Russia and recorded the gain within other income.

Concentration of Credit Risk—The Company is subject to concentrations of credit risk with respect to amounts due from customers and lessees. The Company attempts to limit its credit risk by performing ongoing credit evaluations. The Company earned 37%,14% and 14% of its revenue from three customers in the Aerospace Products segment during the three months ended September 30, 2026, and 27% and 20% of its revenue from two customers in the Aerospace Products segment during the nine months ended September 30, 2026. The Company earned 16% and 11% of its revenue from two customers in the Aerospace Products segment during the three months ended September 30, 2025, and 12% of its revenue from one customer in the Aerospace Products segment during the nine months ended September 30, 2025.

As of September 30, 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 as of September 30, 2026 (December 31, 2025 - $28.4 million). There wasno provision for credit losses for the three and nine months ended September 30, 2026, respectively (2025 - $0.1 million and $0.3 million, respectively). The provision for credit losses is included in the Company's operating expenses. Receivables are written off after all reasonable means to collect the full amount have been exhausted. For the three and nine months ended September 30, 2026, the Company recordedno write-offs and recoveries, net of its allowance for doubtful accounts (2025 - $0.1 million and $46.8 million, respectively).

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

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

Contract Liabilities - affiliate—Contract liabilities - affiliate represent cash received from J&F Power Systems LLC ("J&F") in advance of delivery of equipment orders. There wasno contract liability balance as of December 31, 2025 and as a result, no revenue was recognized during the nine months ended September 30, 2026 related to the contract liability balance as of December 31, 2025.

Contract liabilities - affiliate increased by $234.0 million during the nine months ended September 30, 2026, due to an increase in cash consideration received from J&F, which preceded the Company's satisfaction of the associated performance obligations (i.e. delivery of equipment orders) relating to equipment sales expected to be fulfilled in the next 12 months. Refer to Note 10 “Affiliate Transactions and Former Management Agreement” for additional information on J&F.

Dividends—Dividends are recorded if and when declared by the Board of Directors. For the three and nine months ended September 30, 2026, the Board of Directors declared cash dividends of $0.50 and $1.45 per ordinary share, respectively (2025 - $0.35 and $0.95, respectively).

Additionally, for the three months ended September 30, 2026, the Board of Directors declared cash dividends on the Series D Preferred Shares of $0.59 per share (2025 - Series C Preferred Shares of $0.52 and Series D Preferred Shares of $0.59).

Cash Flow Presentation—Included in net cash (used in) provided by operating activities are inflows from the sale of engine modules and parts that were on engines originally purchased and reported as leasing equipment, net. The purchase of the original engine was reported as an outflow in net cash used in investing activities at the time of purchase through the acquisition of leasing equipment line item. As part of the aerospace products business, the Company breaks down generally unserviceable engines with the intent to manufacture modules and parts for creation and sale of new assets. To manufacture the modules and parts and bring them into a salable condition, the Company spends significant costs, often over multiple reporting periods, for new inventory and capitalizable labor (e.g., engineering) that are included in net cash (used in) provided by operating activities as components of the changes in the related working capital accounts.

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

Additionally, the Company buys inventory from third parties with the intent to use the parts in the manufacturing of the items discussed above, which is reported as an outflow in net cash (used in) provided by operating activities. When rebuilding whole engines for resale, for which the cash inflow upon sale is reported as a cash inflow from investing activities, the Company will transfer modules and parts needed (those purchased from third parties as well as parts from engines previously transferred to inventory from leasing equipment and rebuilt as discussed above) in the rebuild from inventory to leasing equipment.

With respect to purchases of aircraft and engines, when the expected predominant source of cash inflows from the acquired leasing equipment at the time of acquisition is from leasing activities, the related cash outflow is reported as an outflow in net cash used in investing activities. When the expected predominant source of cash inflows is from sales transactions, the related cash outflow is reported as an outflow in net cash (used in) provided by operating activities.

The cash and noncash related activities described above during the nine months ended September 30, 2026 and 2025 are detailed below (unaudited):

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 a part 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 did not elect the practical expedient or make the accounting policy election provided by the ASU and, accordingly, the amendments did not 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:

The Company identified certain assets in its leasing equipment portfolio with indicators of impairment. During the three and nine months ended September 30, 2026 and 2025, these indicators of impairment didnot result in the Company recording any transactional impairment charges.

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

4. INVESTMENTS

The following table presents the ownership interests and carrying values of the Company’s investments:

The Company did not recognize any other-than-temporary impairments for the three and nine months ended September 30, 2026 and 2025.

The following table presents the Company’s proportionate share of equity in earnings (losses) (unaudited):

(1)Includes the profit elimination of $(5,055) and $(21,652) for the three and nine months ended September 30, 2026, respectively (2025 - $(3,908) and $(15,793), respectively), for sales to the SCI Partnerships.

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 nine months ended September 30, 2026, the Company invested $95.1 million in the 2025 Partnership, and received $66.8 million in distributions from 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 unaffiliated limited partners hold substantive kick-out rights over the Company as general partner. 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 - affiliate is eliminated through equity method earnings and will be recognized over time as the 2025 Partnership generates income from leasing and sales activities.

2026 Partnership

During the three months ended September 30, 2026, the Company invested $20.0 million in the 2026 Partnership. The 2026 Partnership is an investment focused on acquiring 737NG and A320ceo on-lease narrowbody aircraft, for which the Company is the Servicer and holds a 21% limited partner ownership. The unaffiliated limited partners hold substantive kick-out rights over the Company as general partner. The Company exercises significant influence over this investment and accounts for this as an equity method investment. 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 2026 Partnership under ASC 606. The profit from the MRE Contract revenue - affiliate is eliminated through equity method earnings and will be recognized over time as the 2026 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.

5. INTANGIBLE ASSETS AND LIABILITIES, NET

Intangible assets and liabilities, net are summarized as follows:

The weighted average amortization period of acquired intangible assets during the nine months ended September 30, 2026 is as follows:

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):

As of September 30, 2026, estimated net annual amortization of intangibles is as follows (unaudited):

6. DEBT, NET

The Company’s debt, net is summarized as follows:

(1)Requires a quarterly commitment fee at a rate of 0.15% -0.30% on the average daily unused portion, as well as customary letter of credit fees and agency fees. Both the quarterly commitment fee and the margin for the Base Rate and Adjusted Term SOFR Rate are based upon the debt to EBITDA ratio as of the end of the most recent fiscal quarter.

(2)Includes an unamortized premium of $690 at September 30, 2026 (December 31, 2025 - $995).

(3)Includes an unamortized discount of $2,208 at September 30, 2026 (December 31, 2025 - $2,530).

(4)Includes an unamortized discount of $2,032 at September 30, 2026 (December 31, 2025 - $2,216).

The Company was in compliance with all debt covenants as of September 30, 2026.

Revolving Credit Facility

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.

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.

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:

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 $13.3 million as of September 30, 2026 (December 31, 2025 - $12.0 million), 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 thethree and nine months ended September 30, 2026, the Company recorded a $0.4 million and $1.3 million increase, respectively (2025 - $0.4 million and $2.5 million increase, respectively) related to the change in fair value, which is recorded in Asset sales revenue.

Given variability in the condition of the engines at the end of the lease terms, which range from 2 to 6 years, the maximum potential amount of undiscounted future payments that could be required under the guarantees at September 30, 2026 was $43.0 million, which is not reasonably expected.

During thethree and nine months ended September 30, 2026 and 2025, there were no significant transfers into or out of Level 3.

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, as well as for noncash consideration on sales, 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 September 30, 2026, the Incentive Plan provides for the issuance of up to 5.6 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):

Options

During the nine months ended September 30, 2026 and 2025, the Company didnot issue any options to employees.

Performance Shares

During the nine months ended September 30, 2026, the Company issued performance shares to select officers and employees of the Company with a grant date fair value of $12.2 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 nine months ended September 30, 2025, the Company issued performance shares to select officers and employees of the Company with a grant date fair value of $4.4 million, vesting over a 3 year performance period based on the achievement of relative total shareholder return (50%) and cumulative diluted EPS (50%).

Restricted Shares

During the nine months ended September 30, 2026, the Company issued restricted shares to select officers and employees of the Company with a grant date fair value of $15.2 million, vesting over 3 years.

Additionally, the Company issued restricted shares to the directors of the Company with a grant date fair value of $0.9 million. These awards vest on the earlier of (i) theone-year anniversary of the grant date (May 28, 2027) or (ii) the date of the Company’s next annual general meeting of shareholders occurring after the grant date.

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

Additionally, the Company issued restricted shares to the directors of the Company with a grant date fair value of $0.8 million. These awards vest on the earlier of (i) theone-year anniversary of the grant date (May 29, 2026) or (ii) the date of the Company’s next annual general meeting of shareholders occurring after the grant date.

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):

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 nine months ended September 30, 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.

10. AFFILIATE TRANSACTIONS AND FORMER MANAGEMENT AGREEMENT

Strategic Capital Initiative

As of September 30, 2026, two partnerships have been formed under the Strategic Capital Initiative: the 2025 Partnership and the 2026 Partnership (collectively, the “SCI Partnerships”).

During the three and nine months ended September 30, 2026, the Company recorded $129.4 million and $533.4 million of MRE Contract revenue - affiliate, respectively (2025 - $58.7 million and $228.9 million, respectively), for the sale and purchase of engines and related modules to and from the SCI Partnerships. Refer to Note 2 “Summary of Significant Accounting Policies” for additional information on MRE Contract revenue - affiliate.

During the nine months ended September 30, 2026, on behalf of the SCI Partnerships, the Company paid refundable deposits of $2.9 million (2025 - $23.5 million) to unrelated, third-parties on future purchases of aircraft.

During the nine months ended September 30, 2026, the SCI Partnerships reimbursed the Company $2.9 million (2025 - $42.8 million) in refundable deposits.

The Company provides aircraft management services to the SCI Partnerships, and receives customary, market-based compensation for providing such services, which is included in Other revenue on the Company’s Consolidated Statement of Operations. The Company received servicing fees of $4,704 and $17,553 for the three and nine months ended September 30, 2026, respectively (2025 - $3,035 and $5,635, respectively), from the SCI Partnerships.

2025 Partnership

On June 29, 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 would acquire 15 on-lease 737NG and A320ceo aircraft in addition to the originally committed 45 on-lease 737NG and A320ceo aircraft.

As of September 30, 2026, the Company sold all committed aircraft to the 2025 Partnership. In aggregate, the net purchase price for the committed on-lease 737NG and A320ceo aircraft was approximately $700.0 million. The purchase price of the seed assets were contractual and the Company received customary, market-based compensation for the sale of the seed assets to the 2025 Partnership.

2026 Partnership

During 2026, the Company launched the 2026 Partnership, the second partnership under the Strategic Capital Initiative. Through SPVs, the 2026 partnership will focus on acquiring 737NG and A320ceo aircraft. The SPVs have entered into agreements with third-party institutional investors for the private placement of limited partner interest in the SPVs. The Company also made a minority limited partner investment and will make future investments in the 2026 Partnership in the same proportion relative to third party limited partner investments.

J&F Power Systems LLC

During the three months ended September 30, 2026, the Company invested $2.5 million for a 49% interest in J&F Power Systems LLC ("J&F"), the Company's joint venture with Jereh Group. J&F was established to package, test and distribute modular power generation solutions. The Company exercises significant influence, but not control, over the operating and financial policies of J&F and accounts for it as an equity method investment.

During the three months ended September 30, 2026, the Company received an advanced disbursement of $234.0 million from J&F. The cash received is accounted for as a contract liability on the Company’s Consolidated Balance Sheets. Refer to Note 2 “Summary of Significant Accounting Policies” for additional information on contract liabilities.

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.

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):

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’stwo 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 CFM56-5B, CFM56-7B 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):

I. For the Three Months Ended September 30, 2026

(1)Includes servicing fees of 4,704 for the three months ended September 30, 2026 from the SCI Partnerships.

(2)Includes the profit elimination of $(5,055) for the three months ended September 30, 2026 for sales to the SCI Partnerships within the Aerospace Products segment.

(1)The United States, included in North America, represents 72% of total revenues based on the location of the Company’s customers and lessees. No other country represents more than 10% of total revenues.

II. For the Nine Months Ended September 30, 2026

(1)Includes servicing fees of $17,553 for the nine months ended September 30, 2026 from the SCI Partnerships.

(2)Includes the profit elimination of $(21,652) for the nine months ended September 30, 2026 for sales to the SCI Partnerships within the Aerospace Products segment.

(1)The United States, included in North America, Bermuda, included in North America, and Ireland, included in Europe, represent 51%,12% and 17% of total revenues, respectively, based on the location of our customers and lessees. No other country represents more than 10% of total revenues.

Presented below are the contracted minimum future annual revenues to be received under existing operating leases as of September 30, 2026:

III. For the Three Months Ended September 30, 2025

(1)Includes servicing fees of $3,035 for the three months ended September 30, 2025 from the 2025 Partnership.

(2)Includes the profit elimination of $(3,908) for the three months ended September 30, 2025 for sales to the 2025 Partnership within the Aerospace Products segment.

(1)The United States, included in North America, and Ireland, included in Europe, represent 38% and 14% of total revenues, respectively, based on the location of the Company’s customers and lessees. No other country represents more than 10% of total revenues.

IV. For the Nine Months Ended September 30, 2025

(1)Includes servicing fees of $5,635 for the nine months ended September 30, 2025 from the 2025 Partnership.

(2)Includes the profit elimination of $(15,793) for the nine months ended September 30, 2025 for sales to the 2025 Partnership within the Aerospace Products segment.

(1)The United States, included in North America, and Ireland, included in Europe, represent 33% and 16% of total revenues, respectively, based on the location of the Company’s customers and lessees. No other country represents more than 10% of total revenues.

V. Location of Long-Lived Assets

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

(1)The United States, included in North America, and Chile, included in South America, represents 13% and 14% of property, plant and equipment and leasing equipment, net, respectively, as of September 30, 2026. The United States, included in North America, represented 22% of property, plant and equipment and leasing equipment, net as of December 31, 2025. No other country represents more than 10% of property, plant and equipment and leasing equipment, net.

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):

For the three and nine months ended September 30, 2026,52,791 shares were excluded from the calculation of Diluted EPS (2025 -none).

During the three and nine months ended September 30, 2026, the Company issued 578 and 1,493 ordinary shares, respectively, to certain directors as compensation (2025 -835 and 1,511, respectively).

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.

In June 2026, the Company redeemed in full the outstanding 4,200,000 8.25% Fixed-Rate Reset Series C Cumulative Perpetual Redeemable Preferred Shares at a redemption price equal to $25.00 per share in cash.

Share Repurchases

On September 15, 2026, the Company’s Board of Directors authorized and approved a share repurchase program (the “Share Repurchase Program”) under which the Company may repurchase up to $500 million of its outstanding ordinary shares. The Company’s repurchases under the Share Repurchase Program may be made from time to time at management’s discretion on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations.

During the three months ended September 30, 2026, the Company repurchased and cancelled 260.2 thousand ordinary shares at an aggregate cost of $49.95 million and an average price of $192.00 per ordinary share. At September 30, 2026, $450.05 million remained available for repurchase under the share repurchase program.

Refer to Note 14 “Subsequent Events” for additional information related to the share repurchase program subsequent to September 30, 2026.

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 October 27, 2026, the Company’s Board of Directors declared a cash dividend on its ordinary shares and eligible participating securities of $0.50 per share for the three months ended September 30, 2026, payable on November 23, 2026 to the holders of record on November 10, 2026.

Additionally, on October 27, 2026, the Company’s Board of Directors also declared cash dividends on the Series D Preferred Shares of $0.59 per share, payable on December 15, 2026 to the holders of record on December 1, 2026.

Share repurchases

Subsequent to September 30, 2026 and through the period ended October 30, 2026, the Company repurchased and retired 187.18 thousand ordinary shares at an aggregate cost of $30.00 million and an average price of $160.27 per ordinary share.

Accelerated Share Repurchase

On October 27, 2026, the Company’s Board of Directors approved a $500.0 million increase to the Company’s share repurchase program, bringing the total authorization to $1.0 billion.

In connection with the increased authorization, the Company has entered into an accelerated share repurchase agreement with Royal Bank of Canada to repurchase $500.0 million of its ordinary shares. The Company expects to complete the transaction during the fourth quarter of 2026. Following completion of the ASR, approximately $420.0 million will remain available under the share repurchase program which will expire in 2027.