Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Feb. 14, 2014	Jun. 30, 2013
Document And Entity Information [Abstract]
Entity Registrant Name	Aircastle LTD
Entity Central Index Key	0001362988
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,064.4
Entity Common Stock, Shares Outstanding		80,767,562

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 654,613	$ 618,217
Accounts receivable	2,825	5,625
Restricted cash and cash equivalents	122,773	111,942
Restricted liquidity facility collateral	107,000	107,000
Flight equipment held for lease, net of accumulated depreciation of $1,305,064 and $1,430,325	5,044,410	4,662,661
Net investment in finance leases	145,173	119,951
Unconsolidated equity method investment	21,123	0
Aircraft purchase deposits	10,000	131
Other assets	143,976	186,633
Total assets	6,251,893	5,812,160
LIABILITIES
Borrowings from secured financings (including borrowings of ACS Ireland VIEs of $207,926 and $152,545, respectively)	1,586,835	1,848,034
Borrowings from unsecured financings	2,150,527	1,750,642
Accounts payable, accrued expenses and other liabilities	111,661	108,593
Lease rentals received in advance	49,235	53,189
Liquidity facility	107,000	107,000
Security deposits	118,804	87,707
Maintenance payments	442,432	379,391
Fair value of derivative liabilities	39,992	61,978
Total liabilities	4,606,486	4,396,534
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Preference shares, $.01 par value, 50,000,000 shares authorized, no shares issued and outstanding	0	0
Common shares, $.01 par value, 250,000,000 shares authorized, 68,639,729 shares issued and outstanding at December 31, 2012; and 80,806,975 shares issued and outstanding at December 31, 2013	808	686
Additional paid-in capital	1,562,106	1,360,555
Retained earnings	158,398	180,675
Accumulated other comprehensive loss	(75,905)	(126,290)
Total shareholders’ equity	1,645,407	1,415,626
Total liabilities and shareholders’ equity	$ 6,251,893	$ 5,812,160

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accumulated depreciation on flight equipment held for lease	$ 1,430,325	$ 1,305,064
Borrowings from secured financings	1,586,835	1,848,034
Common shares, par value	$ 0.01	$ 0.01
Common shares, shares authorized	250,000,000	250,000,000
Common shares, shares issued	80,806,975	68,639,729
Common shares, shares outstanding	80,806,975	68,639,729
Preference shares, par value	$ 0.01	$ 0.01
Preference shares, shares authorized	50,000,000	50,000,000
Preference shares, shares issued	0	0
Preference shares, shares outstanding	0	0
Variable Interest Entity, Primary Beneficiary \| ACS Ireland
Borrowings from secured financings	$ 152,545	$ 207,926

Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenues:
Lease rental revenue	$ 644,929	$ 623,503	$ 580,209
Finance lease revenue	16,165	8,393	0
Amortization of net lease discounts and lease incentives	(32,411)	(12,844)	(16,445)
Maintenance revenue	68,342	53,320	36,954
Total lease rentals	697,025	672,372	600,718
Other revenue	11,620	14,200	4,479
Total revenues	708,645	686,572	605,197
Expenses:
Depreciation	284,924	269,920	242,103
Interest, net	243,757	222,808	204,150
Selling, general and administrative (including non-cash share based payment expense of $5,786, $4,232 and $4,569, respectively)	53,436	48,370	45,953
Impairment of aircraft	117,306	96,454	6,436
Maintenance and other costs	13,631	14,656	13,277
Total expenses	713,054	652,208	511,919
Other income (expense):
Gain on sale of flight equipment	37,220	5,747	39,092
Other	6,132	602	(268)
Total other income (expense)	43,352	6,349	38,824
Income from continuing operations before income taxes and earnings of unconsolidated equity method investment	38,943	40,713	132,102
Income tax provision	9,215	7,845	7,832
Earnings of unconsolidated equity method investment, net of tax	53	0	0
Net income	$ 29,781	$ 32,868	$ 124,270
Earnings per common share — Basic:
Net income per share (in dollars per share)	$ 0.40	$ 0.46	$ 1.64
Earnings per common share — Diluted:
Net income per share (in dollars per share)	$ 0.40	$ 0.46	$ 1.64
Dividends declared per share (in dollars per share)	$ 0.695	$ 0.615	$ 0.50

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement of Comprehensive Income [Abstract]
Net income	$ 29,781	$ 32,868	$ 124,270
Other comprehensive income, net of tax:
Net change in fair value of derivatives, net of tax expense of $857, $586 and $482, respectively	17,120	30,614	37,461
Net derivative loss reclassified into earnings	33,265	30,777	23,078
Other comprehensive income	50,385	61,391	60,539
Total comprehensive income	$ 80,166	$ 94,259	$ 184,809

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

- Definition

Amount after tax of increase (decrease) in accumulated gain (loss) from derivative instruments designated and qualifying as the effective portion of cash flow hedges and an entity's share of an equity investee's increase (decrease) in deferred hedging gain (loss).

+ References+ Details

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement of Cash Flows [Abstract]
Net income	$ 29,781	$ 32,868	$ 124,270
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	284,924	269,920	242,103
Amortization of deferred financing costs	14,719	12,449	15,271
Amortization of net lease discounts and lease incentives	32,411	12,844	16,445
Deferred income taxes	4,416	6,828	5,615
Non-cash share based payment expense	4,569	4,232	5,786
Net derivative loss reclassified into earnings	33,265	30,777	23,078
Ineffective portion of cash flow hedges	371	2,893	(101)
Security deposits and maintenance payments included in earnings	(60,112)	(54,180)	(35,500)
Gain on the sale of flight equipment	(37,220)	(5,747)	(39,092)
Impairment of aircraft	117,306	96,454	6,436
Earnings of unconsolidated equity method investment, net of tax	(53)	0	0
Other	(5,641)	(2,218)	742
Changes on certain assets and liabilities:
Accounts receivable	3,397	(2,530)	(4,818)
Restricted cash and cash equivalents related to operating activities	0	0	4,418
Other assets	1,164	919	(2,675)
Accounts payable, accrued expenses and other liabilities	3,016	17,732	(1,848)
Lease rentals received in advance	(2,276)	4,036	(753)
Net cash provided by operating activities	424,037	427,277	359,377
Cash flows from investing activities:
Acquisition and improvement of flight equipment	(1,263,706)	(693,227)	(776,750)
Proceeds from sale of flight equipment	568,045	61,489	489,196
Restricted cash and cash equivalents related to sale of flight equipment	0	35,762	(35,762)
Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits	(6,094)	(20,553)	(122,069)
Net investment in finance leases	(11,595)	(91,500)	0
Collections on finance leases	9,508	3,852	0
Unconsolidated equity method investment and associated costs	(20,189)	0	0
Purchase of debt investment	0	(43,626)	0
Principal repayments on debt investment	42,001	6,585	0
Other	(903)	(691)	(35)
Net cash used in investing activities	(682,933)	(741,909)	(445,420)
Cash flows from financing activities:
Issuance of shares net of repurchases	197,437	(44,180)	(91,610)
Proceeds from notes and term debt financings	563,230	1,459,690	669,047
Securitization and term debt financing repayments	(510,162)	(847,415)	(390,945)
Deferred financing costs	(10,865)	(31,691)	(20,179)
Restricted secured liquidity facility collateral	0	(3,000)	35,000
Secured liquidity facility collateral	0	(3,000)	35,000
Restricted cash and cash equivalents related to security deposits and maintenance payments	(10,831)	99,748	(25,056)
Security deposits received	20,889	17,453	20,574
Security deposits returned	(5,104)	(6,152)	(7,914)
Maintenance payments received	179,789	142,122	122,050
Maintenance payments returned	(77,033)	(57,822)	(89,300)
Payments for terminated cash flow hedges and payment for option	0	(50,757)	0
Dividends paid	(52,058)	(43,669)	(45,059)
Net cash provided by financing activities	295,292	637,327	141,608
Net increase in cash and cash equivalents	36,396	322,695	55,565
Cash and cash equivalents at beginning of year	618,217	295,522	239,957
Cash and cash equivalents at end of year	654,613	618,217	295,522
Supplemental disclosures of cash flow information:
Cash paid during the year for interest, net of capitalized interest	195,350	167,069	162,938
Cash paid during the year for income taxes	487	2,468	2,054
Supplemental disclosures of non-cash investing activities:
Security deposits, maintenance liabilities and other liabilities settled in sale of flight equipment	58,862	4,135	21,585
Advance lease rentals, security deposits and maintenance reserves assumed in asset acquisitions	88,882	24,261	5,666
Term debt financings assumed in asset acquisitions	$ 84,721	$ 0	$ 0

Consolidated Statements of Changes in Shareholders’ Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2010	$ 1,342,718	$ 796	$ 1,485,841	$ 104,301	$ (248,220)
Beginning Balance (in shares) at Dec. 31, 2010		79,640,285
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common shares to stockholders, directors and employees		3	(3)
Issuance of common shares to stockholders, directors and employees (in shares)		330,382
Repurchase of common shares from directors and employees	(91,610)	(76)	(91,534)
Repurchase of common shares from directors and employees (in shares)		(7,712,195)
Amortization of share based payments	5,786		5,786
Dividends declared	(37,095)			(37,095)
Net income	124,270			124,270
Net change in fair value of derivatives, net of tax expense of $857, $586 and $482, respectively	37,461				37,461
Net derivative loss reclassified into earnings	23,078				23,078
Beginning Balance at Dec. 31, 2011	1,404,608	723	1,400,090	191,476	(187,681)
Beginning Balance (in shares) at Dec. 31, 2011		72,258,472
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common shares to stockholders, directors and employees		2	(2)
Issuance of common shares to stockholders, directors and employees (in shares)		270,412
Repurchase of common shares from directors and employees	(44,180)	(39)	(44,141)
Repurchase of common shares from directors and employees (in shares)		(3,889,155)
Amortization of share based payments	4,232		4,232
Excess tax benefit from stock based compensation	376		376
Dividends declared	(43,669)			(43,669)
Net income	32,868			32,868
Net change in fair value of derivatives, net of tax expense of $857, $586 and $482, respectively	30,614				30,614
Net derivative loss reclassified into earnings	30,777				30,777
Beginning Balance at Dec. 31, 2012	1,415,626	686	1,360,555	180,675	(126,290)
Beginning Balance (in shares) at Dec. 31, 2012	68,639,729	68,639,729
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common shares to stockholders, directors and employees	205,258	128	205,130
Issuance of common shares to stockholders, directors and employees (in shares)		12,796,051
Repurchase of common shares from directors and employees	(7,821)	(6)	(7,815)
Repurchase of common shares from directors and employees (in shares)		(628,805)
Amortization of share based payments	4,569		4,569
Excess tax benefit from stock based compensation	(333)		(333)
Dividends declared	(52,058)			(52,058)
Net income	29,781			29,781
Net change in fair value of derivatives, net of tax expense of $857, $586 and $482, respectively	17,120				17,120
Net derivative loss reclassified into earnings	33,265				33,265
Beginning Balance at Dec. 31, 2013	$ 1,645,407	$ 808	$ 1,562,106	$ 158,398	$ (75,905)
Beginning Balance (in shares) at Dec. 31, 2013	80,806,975	80,806,975

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Organization and Basis of Presentation

Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda exempted company that was incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act of 1981 of Bermuda. Aircastle’s business is investing in aviation assets, including acquiring, leasing, managing and selling high-utility commercial jet aircraft. From time to time, we also make investments in other aviation assets, including debt investments secured by commercial jet aircraft.

Aircastle is a holding company that conducts its business through subsidiaries. Aircastle directly or indirectly owns all of the outstanding common shares of its subsidiaries. The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). We operate in one segment.

The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure since the balance sheet date of December 31, 2013 through the date on which the consolidated financial statements included in this Form 10-K were issued.

Effective January 1, 2013, the Company adopted Financial Accounting Standards Board (the "FASB") Accounting Standards Update ("ASU") 2013-02 (“ASU 2013-02”) Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU requires that companies present reclassification adjustments for each component of accumulated other comprehensive income (“AOCI”) either on the face of the financial statements or in the notes, provided that all required information is presented in a single location. ASU 2013-02 is effective for interim and annual reporting periods beginning after December 15, 2012 and should be applied prospectively. The adoption of ASU 2013-02 did not have a material impact on the Company's consolidated financial statements.

Effective January 1, 2013, the Company adopted ASU 2011-11 (“ASU 2011-11”) Balance Sheet (Topic 210) Disclosures about Offsetting Assets and Liabilities. This ASU requires that companies disclose information to enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on its financial position. ASU 2011-11 is effective for interim and annual reporting periods beginning on or after January 1, 2013 and should be applied retrospectively for all periods presented on the balance sheet. The adoption of ASU 2011-11 did not have a material impact on the Company's consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Aircastle and all of its subsidiaries. Aircastle consolidates eight Variable Interest Entities (“VIEs”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We consolidate VIEs in which we have determined that we are the primary beneficiary. We use judgment when deciding (a) whether an entity is subject to consolidation as a VIE, (b) who the variable interest holders are, (c) the potential expected losses and residual returns of the variable interest holders, and (d) which variable interest holder is the primary beneficiary. When determining which enterprise is the primary beneficiary, we consider (1) the entity’s purpose and design, (2) which variable interest holder has the power to direct the activities that most significantly impact the entity’s economic performance, and (3) 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. When certain events occur, we reconsider whether we are the primary beneficiary of VIEs. We do not reconsider whether we are a primary beneficiary solely because of operating losses incurred by an entity.

Risk and Uncertainties

In the normal course of business, Aircastle encounters several significant types of economic risk including credit, market, aviation industry and capital market risks. Credit risk is the risk of a lessee’s inability or unwillingness to make contractually required payments and to fulfill its other contractual obligations. Market risk reflects the change in the value of derivatives and financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying derivatives and financings. Aviation industry risk is the risk of a downturn in the commercial aviation industry which could adversely impact a lessee’s ability to make payments, increase the risk of unscheduled lease terminations and depress lease rates and the value of the Company’s aircraft. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of our business or to refinance existing debt facilities.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While Aircastle believes that the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Aircastle considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Restricted cash and cash equivalents consists primarily of rent collections, maintenance payments and security deposits received from lessees pursuant to the terms of various lease agreements held in lockbox accounts in accordance with our financings. Changes in restricted cash and cash equivalents related to rent collections are reflected within operating activities of our consolidated statements of cash flows for non-cash trapped financings. Changes in restricted cash and cash equivalents related to rent collections are reflected within financing activities of our consolidated statements of cash flows for cash trapped financings. Changes in restricted cash related to the sale of flight equipment are reflected within investing activities of our consolidated statements of cash flows. Changes in restricted cash and cash equivalents related to maintenance payments and security deposits are reflected within financing activities of our consolidated statements of cash flows.

Virtually all of our cash and cash equivalents and restricted cash and cash equivalents are held by six major financial institutions.

Flight Equipment Held for Lease and Depreciation

Flight equipment held for lease is stated at cost and depreciated using the straight-line method, typically over a 25-year life from the date of manufacture for passenger aircraft and over a 30- to 35-year life for freighter aircraft, depending on whether the aircraft is a converted or purpose-built freighter, to estimated residual values. Estimated residual values are generally determined to be approximately 15% of the manufacturer’s estimated realized price for passenger aircraft when new and 5% - 10% for freighter aircraft when new. Management may make exceptions to this policy on a case-by-case basis when, in its judgment, the residual value calculated pursuant to this policy does not appear to reflect current expectations of value. Examples of situations where exceptions may arise include but are not limited to:


•	flight equipment where estimates of the manufacturer’s realized sales prices are not relevant (e.g., freighter conversions);


•	flight equipment where estimates of the manufacturers’ realized sales prices are not readily available; and


•	flight equipment which may have a shorter useful life due to obsolescence.

Major improvements and modifications incurred in connection with the acquisition of aircraft that are required to get the aircraft ready for initial service are capitalized and depreciated over the remaining life of the flight equipment.

For planned major maintenance activities for aircraft off-lease, the Company capitalizes the actual maintenance costs by applying the deferral method. Under the deferral method, we capitalize the actual cost of major maintenance events, which are depreciated on a straight-line basis over the period until the next maintenance event is required.

In accounting for flight equipment held for lease, we make estimates about the expected useful lives, the fair value of attached leases, acquired maintenance liabilities and the estimated residual values. In making these estimates, we rely upon actual industry experience with the same or similar aircraft types and our anticipated lessee’s utilization of the aircraft.

When we acquire an aircraft with a lease, determining the fair value of attached leases requires us to make assumptions regarding the current fair values of leases for specific aircraft. We estimate a range of current lease rates of like aircraft in order to determine if the attached lease is within a fair value range. If a lease is below or above the range of current lease rates, we present value the estimated amount below or above the fair value range over the remaining term of the lease. The resulting lease discount or premium is amortized into lease rental income over the remaining term of the lease.

Impairment of Flight Equipment

We perform a recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis, at least annually. In addition, a recoverability assessment is performed whenever events or changes in circumstances, or indicators, indicate that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant air traffic decline, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. When we perform a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the aircraft exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted leases, future projected lease rates, transition costs, estimated down time and estimated residual or scrap values for an aircraft. In the event that an aircraft does not meet the recoverability test, the aircraft will be adjusted to fair value, resulting in an impairment charge. See Note 2. — Fair Value Measurements.

Management develops the assumptions used in the recoverability analysis based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third party industry sources. The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in contracted lease rates, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors.

In monitoring the aircraft in our fleet for impairment charges, we identify those aircraft that are most susceptible to failing the recoverability assessment and monitor those aircraft more closely, which may result in more frequent recoverability assessments. The recoverability in the value of these aircraft is more sensitive to changes in contractual cash flows, future cash flow estimates and residual values or scrap values for each aircraft. These are typically older aircraft for which lessee demand is declining.

Net Investment in Finance Leases

If a lease meets specific criteria at the inception of a new lease or at any lease modification date, we recognize the lease as a Net investment in finance leases on our Consolidated Balance Sheets. The Net investment in finance leases consists of lease receivables, less the unearned income, plus the estimated unguaranteed residual value of the leased flight equipment at the lease end date. The unearned income is recognized as Finance lease revenue in our Consolidated Statements of Income over the lease term in a manner that produces a constant rate of return on the Net investment in finance lease.

Collectability of finance leases is evaluated periodically on an individual customer level. The evaluation of the collectability of the finance leases considers the credit of the lessee and the value of the underlying aircraft. An allowance for credit losses is established if there is evidence that we will be unable to collect all amounts due according to the original contractual terms of the Net investment in finance leases. At December 31, 2013, we had no allowance for credit losses for our Net investment in finance leases.

Unconsolidated Equity Method Investment

Aircastle accounts for its interest in an unconsolidated joint venture using the equity method as we do not control the joint venture entity. Under the equity method, the investment is initially recorded at cost and the carrying amount is affected by its share of the unconsolidated joint venture's undistributed earnings and losses, and distributions of dividends and capital.

Capitalization of Interest

We capitalize interest related to progress payments made in respect of flight equipment on forward order and on prepayments made in respect of the conversion of passenger-configured aircraft to freighter-configured aircraft, and add such amount to prepayments on flight equipment. The amount of interest capitalized is the actual interest costs incurred on funding specific assets or the amount of interest costs which could have been avoided in the absence of such payments for the related assets.

Security Deposits

Most of our operating leases require the lessee to pay Aircastle a security deposit or provide a letter of credit. Security deposits represent cash received from the lessee that is held on deposit until lease expiration. Aircastle’s operating leases also obligate the lessees to maintain flight equipment and comply with all governmental requirements applicable to the flight equipment, including without limitation, operational, maintenance, registration requirements and airworthiness directives.

Maintenance Payments

Typically, under an operating lease, the lessee is responsible for performing all maintenance but might be required to make payments to us for heavy maintenance, overhaul or replacement of certain high-value components of the aircraft. These maintenance payments are based on hours or cycles of utilization or on calendar time, depending upon the component, and are required to be made monthly in arrears or at the end of the lease term. Whether to permit a lessee to make maintenance payments at the end of the lease term, rather than requiring such payments to be made monthly, depends on a variety of factors, including the creditworthiness of the lessee, the level of security deposit which may be provided by the lessee and market conditions at the time we enter into the lease. If a lease requires monthly maintenance payments, we would typically be obligated to reimburse the lessee for costs they incur for heavy maintenance, overhaul or replacement of certain high-value components to the extent of maintenance payments received in respect of the specific maintenance event, usually shortly following completion of the relevant work. If a lease requires end of lease term maintenance payments, typically the lessee would be required to pay us for its utilization of the aircraft during the lease; however, in some cases, we may owe a net payment to the lessee in the event heavy maintenance is performed and paid for by the lessee during the lease term and the aircraft is returned to us in better condition that at lease inception.

We record monthly maintenance payments by the lessee as accrued maintenance payments liabilities in recognition of our contractual commitment to refund such receipts. In these contracts, we do not recognize such maintenance payments as maintenance revenue during the lease. Reimbursements to the lessee upon the receipt of evidence of qualifying maintenance work are charged against the existing accrued maintenance payments liability. We currently defer maintenance revenue recognition of all monthly maintenance payments collected until the end of the lease, when we are able to determine the amount, if any, by which the monthly maintenance payments payments received from a lessee exceed costs to be incurred by that lessee in performing heavy maintenance. End of lease term maintenance payments made to us are recognized as maintenance revenue, and end of lease term maintenance payments we make to a lessee are recorded as contra maintenance revenue.

Lease Incentives and Amortization

Many of our leases contain provisions which may require us to pay a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. We account for these expected payments as lease incentives, which are amortized as a reduction of revenue over the life of the lease. We estimate the amount of our portion for such costs, typically for the first major maintenance event for the airframe, engines, landing gear and auxiliary power units, expected to be paid to the lessee based on assumed utilization of the related aircraft by the lessee, the anticipated amount of the maintenance event cost and the estimated amounts the lessee is responsible to pay.

This estimated lease incentive is not recognized as a lease incentive liability at the inception of the lease. We recognize the lease incentive as a reduction of lease revenue on a straight-line basis over the life of the lease, with the offset being recorded as a lease incentive liability which is included in maintenance payments on the balance sheet. The payment to the lessee for the lease incentive liability is first recorded against the lease incentive liability, and any excess above the lease incentive liability is recorded as a prepaid lease incentive asset, which is included in other assets on the balance sheet and continues to amortize over the remaining life of the lease.

Lease acquisition costs related to reconfiguration of the aircraft cabin, other lessee specific modifications and other direct costs are capitalized and amortized into revenue over the initial life of the lease, assuming no lease renewals, and are included in other assets.

Income Taxes

Aircastle uses an asset and liability based approach in accounting for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount estimated by us to be realizable. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. We did not have any unrecognized tax benefits.

Derivative Financial Instruments

In the normal course of business we utilize interest rate derivatives to manage our exposure to interest rate risks. Specifically, our interest rate derivatives are hedging variable rate interest payments on our various debt facilities. If certain conditions are met, an interest rate derivative may be specifically designated as a cash flow hedge. All of our designated interest rate derivatives are cash flow hedges. We have one interest rate derivative that is not designated for accounting purposes.

On the date that we enter into an interest rate derivative, we formally document the intended use of the interest rate derivative and its designation as a cash flow hedge, if applicable. We also assess (both at inception and on an ongoing basis) whether the interest rate derivative has been highly effective in offsetting changes in the cash flows of the variable rate interest payments on our debt and whether the interest rate derivative is expected to remain highly effective in future periods. If it were to be determined that the interest rate derivative is not (or has ceased to be) highly effective as a cash flow hedge, we would discontinue cash flow hedge accounting prospectively.

At inception of an interest rate derivative designated as a cash flow hedge, we establish the method we will use to assess effectiveness and the method we will use to measure any ineffectiveness. We have one hedge designated using the “change in variable cash flows method” for both. This method involves a comparison of the present value of the cumulative change in the expected future cash flows on the variable leg of the interest rate derivative against the present value of the cumulative change in the expected future interest cash flows on the variable-rate debt. When the change in the interest rate derivative’s variable leg exceeds the change in the debt’s variable-rate interest cash flows, the calculated ineffectiveness is recorded in interest expense on our consolidated statement of income. Effectiveness is assessed by dividing the change in the interest rate derivative variable leg by the change in the debt’s variable-rate interest cash flows.

We have five hedges which are designated using the “hypothetical derivative method” for assessment of effectiveness and calculation of ineffectiveness. The hypothetical derivative method involves a comparison of the change in the fair value of the interest rate derivative to the change in the fair value of a hypothetical interest rate derivative with critical terms that reflect the hedged variable-rate debt. The effectiveness of these relationships is assessed by regressing historical changes in the interest rate derivative against historical changes in the hypothetical interest rate derivative. When the change in the interest rate derivative exceeds the change in the hypothetical interest rate derivative, the calculated ineffectiveness is recorded in interest expense on our consolidated statement of income.

All interest rate derivatives are recognized on the balance sheet at their fair value. We determine fair value for our United States dollar-denominated interest rate derivatives by calculating reset rates and discounting cash flows based on cash rates, futures rates and swap rates in effect at the period close. See Note 2 — Fair Value Measurements for more information.

For our interest rate derivatives designated as cash flow hedges, the effective portion of the interest rate derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings when the interest payments on the debt are recorded in earnings. The ineffective portion of the interest rate derivative is calculated and recorded in interest expense on our consolidated statement of income at each quarter end. For any interest rate derivative not designated as a cash flow hedge, the gain or loss is recognized in other income (expense) on our consolidated statement of income.

We may choose to terminate certain interest rate derivatives prior to their contracted maturities. Any related net gains or losses in accumulated other comprehensive income at the date of termination are not reclassified into earnings if it remains probable that the interest payments on the debt will occur. The amounts in accumulated other comprehensive income are reclassified into earnings as the interest payments on the debt affect earnings. Terminated interest rate derivatives are reviewed periodically to determine if the forecasted transactions remain probable of occurring. To the extent that the occurrence of the interest payments on the debt are deemed remote, the related portion of the accumulated other comprehensive income balance is reclassified into earnings immediately.

Lease Revenue Recognition

We lease flight equipment under net operating leases with lease terms typically ranging from 3 to 7 years. We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals. Operating lease rentals that adjust based on a London Interbank Offered Rate (“LIBOR”) index are recognized on a straight-line basis over the period the rentals are fixed and accruable. Revenue is not recognized when collection is not reasonably assured. When collectability is not reasonably assured, the customer is placed on non-accrual status, and revenue is recognized when cash payments are received.

Comprehensive Income

Comprehensive income consists of net income and other gains and losses, net of income taxes, if any, affecting shareholders’ equity that, under US GAAP, are excluded from net income. At December 31, 2012 and 2013, such amount consists of the effective portion of fluctuations in the fair value of derivatives designated as cash flow hedges.

Share Based Compensation

Aircastle recognizes compensation cost relating to share-based payment transactions in the financial statements based on the fair value of the equity instruments issued. Aircastle uses the straight line method of accounting for compensation cost on share-based payment awards that contain pro-rata vesting provisions.

Deferred Financing Costs

Deferred financing costs, which are included in other assets in the Consolidated Balance Sheet, are amortized using the interest method for amortizing loans over the lives of the relevant related debt.

Leasehold Improvements, Furnishings and Equipment

Improvements made in connection with the leasing of office facilities are capitalized as leasehold improvements and are amortized on a straight line basis over the minimum lease period. Furnishings and equipment are capitalized at cost and are amortized over the estimated life of the related assets or remaining lease terms, which range between 3 and 5 years.

Proposed Accounting Pronouncements

In May 2013, the FASB issued re-exposure draft, “Leases” (the “Lease Re-ED”), which would replace the existing guidance in the Accounting Standards Codification (“ASC”) 840 (“ASC 840”), Leases. The FASB decided that leases would be classified as either leases of real property (Type B) or leases of assets other than real property (Type A). Leases of real property will continue to use operating lease accounting. Leases of other than real property would use the receivable residual approach. Under the receivable residual approach, a lease receivable would be recognized for the lessor's right to receive lease payments, a portion of the carrying amount of the underlying asset would be allocated between the right of use granted to the lessee and the lessor's residual value and profit or loss would only be recognized at commencement if it is reasonably assured. The comment period for the Lease Re-ED ended on September 13, 2013. We anticipate that the final standard may have an effective date no earlier than 2017. When and if the proposed guidance becomes effective, it may have a significant impact on the Company's consolidated financial statements. Although we believe the presentation of our financial statements, and those of our lessees could change, we do not believe the accounting pronouncement will change the fundamental economic reasons for which the airlines lease aircraft. Therefore, we do not believe it will have a material impact on our business.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References+ Details

Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

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 us to develop our 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:


•	The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.


•	The income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectation about those future amounts.


•	The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).

The following tables set forth our financial assets and liabilities as of December 31, 2012 and 2013 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.



	Fair Value as of December 31, 2012		Fair Value Measurements at December 31, 2012 Using Fair Value Hierarchy
	Fair Value as of December 31, 2012		Level 1		Level 2		Level 3		Valuation Technique
Assets:
Cash and cash equivalents	$	618,217	$	618,217	$	—	$	—	Market
Restricted cash and cash equivalents	111,942		111,942		—		—		Market
Debt investments	40,388		—		—		40,388		Income
Total	$	770,547	$	730,159	$	—	$	40,388



Liabilities:
Derivative liabilities	$	61,978	$	—	$	61,978	$	—	Income



	Fair Value as of December 31, 2013		Fair Value Measurements at December 31, 2013 Using Fair Value Hierarchy
	Fair Value as of December 31, 2013		Level 1		Level 2		Level 3		Valuation Technique
Assets:
Cash and cash equivalents	$	654,613	$	654,613	$	—	$	—	Market
Restricted cash and cash equivalents	122,773		122,773		—		—		Market
Total	$	777,386	$	777,386	$	—	$	—



Liabilities
Derivative liabilities	$	39,992	$	—	$	39,992	$	—	Income

Our cash and cash equivalents, along with our restricted cash and cash equivalents balances, consist largely of money market securities that are considered to be highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. Our interest rate derivatives included in Level 2 consist of United States dollar-denominated interest rate derivatives, and their fair values are determined by applying standard modeling techniques under the income approach to relevant market interest rates (cash rates, futures rates, swap rates) in effect at the period close to determine appropriate reset and discount rates and incorporates an assessment of the risk of non-performance by the interest rate derivative counterparty in valuing derivative assets and an evaluation of the Company’s credit risk in valuing derivative liabilities.

The following table reflects the activity for the classes of our assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2012 and 2013:



	Assets
	Debt Investments
Balance as of December 31, 2011	$	—
Purchases	43,626
Total gains/(losses), net:
Included in other revenue	3,347
Settlements	(6,585		)
Balance as of December 31, 2012	40,388
Total gains/(losses), net:
Included in other revenue	1,613
Settlements	(42,001		)
Balance as of December 31, 2013	—



	Liabilities
	Derivative Liabilities
Balance as of December 31, 2011	$	(56,229	)
Total gains/(losses), net:
Included in other income (expense)	599
Included in interest expense	73
Included in other comprehensive income	4,800
Settlements	50,757
Balance as of December 31, 2012	—
Total gains/(losses), net:
Included in other income (expense)	—
Included in interest expense	—
Included in other comprehensive income	—
Settlements	—
Balance as of December 31, 2013	$	—

For the year ended December 31, 2012, we had no transfers into or out of Level 3, however we did terminate all Level 3 interest rate derivatives during the second quarter of 2012. For the year ended December 31, 2013, we had no transfers into or out of Level 3; however in 2013, we settled the debt investment during the first quarter of 2013.

We measure the fair value of certain assets and liabilities on a non-recurring basis, when US 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 our investment in an unconsolidated joint venture and aircraft. We account for our investment in an unconsolidated joint venture under the equity method of accounting and record impairment when its fair value is less than its carrying value. We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value measurements for aircraft in impairment tests are based on an income approach which uses Level 3 inputs, which include the Company’s assumptions and appraisal data as to future cash proceeds from leasing and selling aircraft.

Aircraft Valuation

We perform our annual fleet-wide recoverability assessment during the third quarter of each year. This recoverability assessment is a comparison of the carrying value of each aircraft to its undiscounted expected future cash flows. We develop the assumptions used in the recoverability assessment, including those relating to current and future demand for each aircraft type, based on management's experience in the aircraft leasing industry as well as information received from third party sources. Estimates of the undiscounted cash flows for each aircraft type are impacted by changes in contracted and future expected lease rates, residual values, expected scrap values, economic conditions and other factors.

Following completion of the recoverability analysis during the third quarter of 2013, we determined the cash flows expected to be generated by seven of our aircraft did not support carrying values and we wrote down their book values by a total of $97,592. For some of these aircraft we also shortened the expected lives and/or reduced the residual values. More specifically, we wrote down the book values of:


•	Six Boeing 747-400 converted freighter aircraft manufactured between 1990 and 1994 and recorded impairment charges total $88,647; and


•	One Boeing 737-700 aircraft manufactured in 1999 and recorded an impairment charge of $8,945.

In addition, for two McDonnell Douglas MD-11F freighter aircraft manufactured in 1997 that passed the recoverability assessment, we shortened the expected lives from 35 years to 25 years from production date.

In this year's assessment, we lowered our assumptions for the freighter aircraft noted above to reflect the cumulative effect of increasing supply in the wake of stagnating demand over the past three years. More specifically, higher production levels for new, large freighter aircraft together with increased belly freight capacity from the latest generation of wide-body passenger aircraft have resulted in a glut of large freighter aircraft. At the same time, air freight demand has not increased due to modest economic growth rates in certain key economies and structural changes in the freight market (e.g., the evolution of smaller, smarter and lighter electronic devices and modal shifts). The combined effect of these developments has depressed lease rates and driven more converted freighter aircraft into storage, particularly over the past year.

We estimate a decrease in depreciation expense for changes we made to our aircraft for the year ended December 31, 2014 of approximately $4,600.

We also recorded the following transactional impairments, outside the recoverability assessment process, during 2013:


•	We impaired two aircraft, one Airbus A319-100 aircraft and one Boeing 767-300ER aircraft, each of which was returned to us early by the respective lessee. We wrote these aircraft down to their expected sales prices, recording impairment charges totaling $6,199 and recorded maintenance revenue of $9,019 and other revenue of $876.


•	We elected not to invest in engine performance restoration maintenance visits for one Boeing 767-300ER aircraft and instead agreed with the lessee to terminate the lease prior to scheduled expiry and pursue a part-out sale. We recorded impairment charges of $8,544 and we recorded maintenance revenue of $12,056 and other revenue of $875 from an early termination payment.


•	We impaired two Boeing 767-300ER aircraft, each of which was returned to us at the scheduled end of their respective leases. We wrote these aircraft down to their expected sales prices, recording impairment charges totaling $4,970 and recorded maintenance revenue of $7,103 and other revenue of $33.

Other than the aircraft discussed above, management believes that the net book value of each aircraft is currently supported by the estimated future undiscounted cash flows expected to be generated by that aircraft, and accordingly, no other aircraft were impaired as a consequence of this recoverability assessment. However, our lessees may face financial difficulties and return aircraft to us prior to the contractual lease expiry dates which may change our cash flow assumptions and require future impairment charges. While we believe that the estimates and related assumptions used in the recoverability assessment are appropriate, actual results could differ from those estimates.

In the third quarter of 2012, following our recoverability assessment of the aircraft in our fleet at that time, we impaired four Boeing 767-300ER aircraft, eight Boeing 737 “Classic” aircraft, and one Airbus A310-300F freighter aircraft and recorded aggregate impairment charges of $67,370 to write these aircraft down to current market values.

We also made the following transactional impairments, outside the recoverability assessment process, during 2012:


•	We impaired two aircraft, one Boeing 757-200 aircraft that we sold for less than its net book value and one Boeing 767-300ER aircraft which was returned to us following its scheduled lease expiration and which failed its recoverability assessment. For these two aircraft, we recorded impairment charges of $10,111, and we recorded $2,447 of maintenance revenue.

•

We elected not to invest in engine performance restoration maintenance visits for two Airbus A320-200 “Classic” aircraft with older technology engines and instead agreed with the lessee to terminate the leases prior to scheduled expiry and pursue part-out sales. Following agreement with our customer to terminate the leases, these aircraft failed the recoverability assessment and we recorded impairment charges of $12,306 and we recorded $11,104 of maintenance revenue and reversed $1,157 of lease incentives during the third quarter of 2012, for these two aircraft.


•	We elected not to invest in engine performance restoration maintenance visits for one Airbus A320-200 aircraft and instead agreed to pursue part-out sales. Following the scheduled return of the aircraft from the lessee, this aircraft failed the recoverability assessment and we recorded an impairment charge of $6,668 and we recorded $6,509 of maintenance revenue.

Financial Instruments

Our financial instruments, other than cash, consist principally of cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable, amounts borrowed under financings and interest rate derivatives. The fair value of cash, cash equivalents, restricted cash and cash equivalents, accounts receivable and accounts payable approximates the carrying value of these financial instruments because of their short-term nature.

The fair values of our securitizations which contain third party credit enhancements are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates of borrowing arrangements that do not contain third party credit enhancements. The fair values of our ECA term financings and bank financings are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements. The fair value of our Senior Notes is estimated using quoted market prices.

The carrying amounts and fair values of our financial instruments at December 31, 2012 and 2013 are as follows:



	December 31, 2012						December 31, 2013
	Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)			Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)
Securitizations and term debt financings	$	(1,082,368	)	$	(962,960	)	$	(828,871	)	$	(779,901	)
ECA term financings	(652,916		)	(671,966		)	(493,708		)	(506,227		)
Bank financings	(112,750		)	(116,272		)	(264,256		)	(268,435		)
Senior Notes	(1,750,642		)	(1,905,565		)	(2,150,527		)	(2,325,965		)

All of our financial instruments are classified as Level 2 with the exception of our senior Notes, which are classified as Level 1.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Lease Rental Revenues and Flight Equipment Held for Lease

12 Months Ended

Dec. 31, 2013

Leases [Abstract]

Lease Rental Revenues and Flight Equipment Held for Lease

Minimum future annual lease rentals contracted to be received under our existing operating leases of flight equipment at December 31, 2013 were as follows:



Year Ending December 31,	Amount
2014	$	633,778
2015	572,900
2016	485,804
2017	353,853
2018	237,681
Thereafter	774,355
Total	$	3,058,371

Geographic concentration of lease rental revenue earned from flight equipment held for lease was as follows:



	Year Ended December 31,
Region	2011		2012		2013
Europe	45	%	39	%	33	%
Asia and Pacific	24	%	32	%	38	%
North America	13	%	11	%	10	%
Middle East and Africa	11	%	11	%	10	%
South America	7	%	7	%	9	%
Total	100	%	100	%	100	%

The classification of regions in the tables above and the table and discussion below is determined based on the principal location of the lessee of each aircraft.

For the year ended December 31, 2011, one customer accounted for 11% of lease rental revenues, and three additional customers accounted for a combined 19% of lease rental revenues. No other customer accounted for more than 5% of lease rental revenues.

For the year ended December 31, 2012, one customer accounted for 9% of lease rental revenues, and four additional customers accounted for a combined 25% of lease rental revenues. No other customer accounted for more than 5% of lease rental revenues.

For the year ended December 31, 2013, one customer accounted for 8% of lease rental revenues, and three additional customers accounted for a combined 17% of lease rental revenues. No other customer accounted for more than 5% of lease rental revenues.

The following table sets forth revenue attributable to individual countries representing at least 10% of total revenue (including maintenance revenue) in any year based on each lessee’s principal place of business for the years indicated:



	2011				2012				2013
Country	Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue
United States	$	64,195	11	%	$	78,493	11	%	$	74,274	10	%
China⁽¹⁾	69,534		11	%	75,502		11	%	—		—	%

______________


(1)	Total revenue attributable to China was less than 10% for the twelve months ended December 31, 2013.

Geographic concentration of net book value of flight equipment held for lease was as follows:



	December 31, 2012				December 31, 2013
Region	Number of Aircraft		Net Book Value %		Number of Aircraft		Net Book Value %
Europe	68		35	%	64		30	%
Asia and Pacific	50		34	%	56		41	%
North America	17		10	%	19		10	%
South America	14		8	%	14		7	%
Middle East and Africa	8		12	%	7		11	%
Off-lease	2	⁽¹⁾	1	%	2	⁽²⁾	1	%
Total	159		100	%	162		100	%

______________


(1)	Consists of one Boeing 767-300ER aircraft and one Boeing 747-400 converted freighter aircraft that we are marketing for lease or sale.


(2)	Consists of two Boeing 747-400 converted freighter aircraft, one of which is subject to a commitment to lease and the other is being marketed.

The following table sets forth net book value of flight equipment attributable to individual countries representing at least 10% of net book value of flight equipment based on each lessee’s principal place of business as of:



	December 31, 2012					December 31, 2013
Country	Net Book Value		Net Book Value %		Number of Lessees	Net Book Value		Net Book Value %		Number of Lessees
China⁽¹⁾	$	515,194	11	%	4	$	—	—	%	—

______________


(1)	The net book value of flight equipment attributable to China was less than 10% as of December 31, 2013.

At December 31, 2012 and 2013, the amounts of lease incentive liabilities recorded in maintenance payments on the consolidated balance sheets were $15,587 and $28,611, respectively.

- Definition

The entire disclosure for operating leases of a lessor. This may include a general description of lessor's leasing arrangements for operating leases, including the basis on which contingent rental payments are determined, the existence and terms of renewal or purchase options and escalation clauses, restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions.

+ References+ Details

Net Investment in Finance Leases

12 Months Ended

Dec. 31, 2013

Leases [Abstract]

Net Investment in Finance Leases

At December 31, 2013, our net investment in finance leases represents six aircraft leased to a customer in Germany and four aircraft leased to two customer in the United States and one aircraft leased to a customer in Canada. The following table lists the components of our net investment in finance leases at December 31, 2013:



	Amount
Total lease payments to be received	$	137,448
Less: Unearned income	(62,734		)
Estimated residual values of leased flight equipment (unguaranteed)	70,459
Net investment in finance leases	$	145,173

At December 31, 2013, minimum future lease payments on finance leases are as follows:



Year Ending December 31,	Amount
2014	27,042
2015	27,042
2016	27,042
2017	26,128
2018	15,287
Thereafter	14,907
Total lease payments to be received	$	137,448

Unconsolidated Equity Method Investment

12 Months Ended

Dec. 31, 2013

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Unconsolidated Equity Method Investment

Unconsolidated Equity Method Investment

On December 19, 2013, the Company formed a joint venture to invest in leased aircraft with an affiliate of Ontario Teachers' Pension Plan (or "Teachers' ") in which we have a 30% equity interest for a total investment of $21,070, including associated costs and maintenance liability. The joint venture's first investment was two Airbus A330 family aircraft manufactured in 2013 that were purchased from us for $214,159, and which we had acquired earlier in 2013. At December 31, 2013, Teachers' owned approximately 8.5% of our outstanding common shares. As a result of Teachers' holding more than 5% of our common shares, the joint venture and the sale of the initial Airbus A330 family aircraft, was a related party transaction under our related party policy. Accordingly, the formation of the joint venture and the transfer of these aircraft was submitted to, and approved by, our Audit Committee under our Related Party Policy. The assets and liabilities of this joint venture are off our balance sheet and we only record our net investment under the equity method of accounting.

We will source and service these investments and will provide marketing, asset management and administrative services to the joint venture and will be paid market-based fees for those services. The Company is not obligated to source investments for the joint venture or to offer any minimum number of investments to the joint venture, and neither partner is obliged to invest in specific transaction. The Company guarantees to return its portion of partner distributions received related to the joint venture's lessee maintenance payments. The Company recorded a $881 guarantee liability which is reflected in Maintenance payments on the balance sheet.



Investment in joint venture at December 31, 2012	$	—
Investment in joint venture	21,070
Earnings from joint venture, net of tax	53
Investment in joint venture at December 31, 2013	$	21,123

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References+ Details

Variable Interest Entities	12 Months Ended
Variable Interest Entities	Dec. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities	Variable Interest Entities Aircastle consolidates eight VIEs of which it is the primary beneficiary. The operating activities of these VIEs are limited to acquiring, owning, leasing, maintaining, operating and, under certain circumstances, selling the 18 aircraft discussed below. Securitizations In connection with Securitization No. 1, two of our subsidiaries, ACS Aircraft Finance Ireland plc (“ACS Ireland”) and ACS Aircraft Finance Bermuda Limited (“ACS Bermuda”) issued Class A-1 notes, and each has fully and unconditionally guaranteed the other's obligations under the notes. In connection with Securitization No. 2, two of our subsidiaries, ACS Aircraft Finance Ireland 2 Limited (“ACS Ireland 2”) and ACS 2007-1 Limited (“ACS Bermuda 2”) issued Class A-1 notes and each has fully and unconditionally guaranteed the other's obligations under the notes. ACS Bermuda and ACS Bermuda 2 are collectively referred to as the “ACS Bermuda Group.” Aircastle is the primary beneficiary of ACS Ireland and ACS Ireland 2 (collectively, the “ACS Ireland VIEs”), as we have both the power to direct the activities of the VIEs that most significantly impact the economic performance of such VIEs and we bear the significant risk of loss and participate in gains through Class E-1 Securities. Although Aircastle has not guaranteed the ACS Ireland VIEs debt, Aircastle wholly owns the ACS Bermuda Group which has fully and unconditionally guaranteed the ACS Ireland VIEs obligations. The activity that most significantly impacts the economic performance is the leasing of aircraft. Aircastle Advisor (Ireland) Limited (Aircastle's wholly owned subsidiary) is the remarketing servicer and is responsible for the leasing of the aircraft. An Irish charitable trust owns 95% of the common shares of the ACS Ireland VIEs. The Irish charitable trust's risk is limited to its annual dividend of $2 per VIE. At December 31, 2013, the assets of the two VIEs include 10 aircraft transferred into the VIEs at historical cost basis in connection with Securitization No. 1 and Securitization No. 2. The combined assets of the ACS Ireland VIEs as of December 31, 2013 are $311,227. The combined liabilities of the ACS Ireland VIEs, net of $72,068 Class E-1 Securities held by the Company, which is eliminated in consolidation, as of December 31, 2013 are $251,756. ECA Term Financings Aircastle, through various subsidiaries, each of which is owned by a charitable trust (such entities, collectively the “Air Knight VIEs”), entered into eleven different twelve-year term loans, which are supported by guarantees from Compagnie Francaise d’ Assurance pour le Commerce Exterieur, (“COFACE”), the French government sponsored export credit agency (“ECA”). These loans provided for the financing for eleven new Airbus A330-200 aircraft. In June 2011, we repaid one of these loans from the proceeds of the sale of the related aircraft. In June 2013, we repaid two of these loans from the proceeds of the sale of the related aircraft. We sold an additional aircraft in June 2013, and substituted a newly purchased aircraft as collateral for the debt in December 2013. At December 31, 2013, Aircastle had eight outstanding term loans with guarantees from COFACE. We refer to these COFACE-supported financings as “ECA Term Financings.” Aircastle is the primary beneficiary of the Air Knight VIEs, as we have the power to direct the activities of the VIEs that most significantly impact the economic performance of such VIEs and we bear the significant risk of loss and participate in gains through a finance lease. The activity that most significantly impacts the economic performance is the leasing of aircraft of which our wholly owned subsidiary is the servicer and is responsible for managing the relevant aircraft. There is a cross collateralization guarantee between the Air Knight VIEs. In addition, Aircastle guarantees the debt of the Air Knight VIEs. The only assets that the Air Knight VIEs have on their books are financing leases that are eliminated in the consolidated financial statements and deferred financing costs. The related aircraft, with a net book value as of December 31, 2013 were $668,614, are included in our flight equipment held for lease. The consolidated debt outstanding of the Air Knight VIEs as of December 31, 2013 is $493,708.

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Tax effect of change in fair value of derivatives	$ 482	$ 586	$ 857
Accumulated Other Comprehensive Income (Loss)
Tax effect of change in fair value of derivatives	$ 482	$ 586	$ 857