FTAI Aviation Ltd - FXDFR PRF PERPETUAL USD 25 - Ser B

Q2 performance: strong momentum in Aerospace Products and progress in Power commercialization - Aerospace Products: revenue +78% YoY; Q2 adjusted EBITDA $250m (also +51% YoY, +12% QoQ), 29% EBITDA margin (in line with prior quarter). - Production: refurbished 296 CFM56 modules in Q2 (+61% vs Q2’25); first-half production 566 modules, ahead of midyear target. - Power: Mod-1 prototype testing progressing (moved from Montreal to Miami, “excellent” performance); commercial launch remains targeted for Q4 2026. - Strategic/customer signal: Power JV (J&F Power Systems) signed a 5-year master supply agreement with a U.S. hyperscaler, plus an initial PO of $1.465B for 2027 Mod-1 deliveries.

Market share acceleration in CFM56: demand is strong, but supply-constrained—driving an asset-light shift - CFM56 market share: grew 12% → 14% in Q2 (improvement driven by production capability, parts procurement strategy, and MRE customer adoption). - Management frames the environment as “supply constrained, not demand constrained”; module allocation is increasingly directed to third-party customers rather than FTAI’s leasing pool. - Strategic implication (good): strengthens long-term customer relationships + “asset-light balance sheet.” - Strategic implication (bad/near-term): reduces near-term contribution from aviation leasing due to less module output going back into the leasing fleet.

Forecast updates for 2026: EBITDA guidance revised lower for Aviation Leasing - Aerospace Products 2026 EBITDA: reaffirmed at $1.05B. - Aviation Leasing 2026 EBITDA: revised to $475M (from earlier guidance), reflecting the shift toward third-party module sales and reduced leasing earnings until SCI scales. - Total business EBITDA implied (2027 guidance also given): investors should expect a mix shift as SCI ramps. - Free cash flow: full-year adjusted free cash flow reduced to $878M (from $915M) due to reallocation of module production and additional $30M R&D for Power capability, partly offset by improved aerospace scale/working capital.