0001362988-21-000014 | 10-K | XBRL Viewer

Cover Page - USD ($) $ in Millions	12 Months Ended
Cover Page - USD ($) $ in Millions	Feb. 28, 2021	Apr. 15, 2021	Aug. 31, 2020
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Feb. 28, 2021
Document Transition Report	false
Entity File Number	001-32959
Entity Registrant Name	AIRCASTLE LIMITED
Entity Incorporation, State or Country Code	D0
Entity Tax Identification Number	98-0444035
Entity Address, Address Line One	c/o Aircastle Advisor LLC
Entity Address, Address Line Two	201 Tresser Boulevard, Suite 400
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06901
City Area Code	203
Local Phone Number	504-1020
Title of 12(b) Security	Common Shares, par value $0.01 per share
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,048
Entity Central Index Key	0001362988
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--02-28
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 0

Consolidated Balance Sheets - USD ($) $ in Thousands	Feb. 28, 2021	Feb. 29, 2020	Dec. 31, 2019
ASSETS
Cash and cash equivalents	$ 578,004	$ 166,083	$ 140,882
Restricted Cash and Cash Equivalents	2,594	5,354	14,561
Accounts receivable	82,572	27,269	18,006
Flight equipment held for lease, net of accumulated depreciation of $2,076,972, $1,542,938 and $1,501,664, respectively	6,492,471	7,142,987	7,375,018
Net investment in leases, net of allowance for credit losses of $864, $6,558 and $0, respectively	195,376	426,252	419,396
Unconsolidated equity method investments	35,377	33,470	32,974
Other assets	311,944	206,617	201,209
Total assets	7,698,338	8,008,032	8,202,046
LIABILITIES
Borrowings from secured financings, net of debt issuance costs	768,850	1,012,518	1,129,345
Borrowings from unsecured financings, net of debt issuance costs	4,366,261	3,884,235	3,932,491
Accounts payable, accrued expenses and other liabilities	174,267	207,114	172,114
Lease rentals received in advance	58,013	107,944	108,060
Security deposits	80,699	109,663	124,954
Maintenance payments	519,178	650,369	682,398
Total liabilities	5,967,268	5,971,843	6,149,362
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Preference shares, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding	0	0	0
Common shares, $0.01 par value, 250,000,000 shares authorized, 14,048 shares issued and outstanding at February 28, 2021; 75,076,794 shares issued and outstanding at February 29, 2020; and 75,122,129 shares issued and outstanding at December 31, 2019	0	751	751
Additional paid-in capital	1,485,777	1,456,977	1,446,664
Retained earnings	245,293	578,461	605,269
Accumulated other comprehensive loss	0	0	0
Total shareholders’ equity	1,731,070	2,036,189	2,052,684
Total liabilities and shareholders’ equity	$ 7,698,338	$ 8,008,032	$ 8,202,046

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Feb. 28, 2021	Mar. 27, 2020	Feb. 29, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Accumulated depreciation on flight equipment held for lease	$ 2,076,972		$ 1,542,938	$ 1,501,664
Common shares, par value	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Common shares, shares authorized	250,000,000	250,000,000	250,000,000	250,000,000
Common shares, shares issued	14,048		75,076,794	75,122,129
Common shares, shares outstanding	14,048	14,048	75,076,794	75,122,129
Preference shares, par value	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Preference shares, shares authorized	50,000,000	50,000,000	50,000,000	50,000,000
Preference shares, shares issued	0		0	0
Preference shares, shares outstanding	0		0	0
Beginning balance	$ 864		$ 6,558	$ 0

Consolidated Statements of Income - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Feb. 29, 2020	Feb. 28, 2021	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Lease rental revenue	$ 131,119	$ 611,421	$ 777,403	$ 722,694
Direct financing and sales-type lease revenue	4,447	18,215	32,295	35,132
Amortization of lease premiums, discounts and incentives	(3,669)	(22,842)	(22,636)	(15,269)
Total lease revenue	173,111	779,462	862,049	848,295
Gain on sale of flight equipment	15,354	33,536	45,532	36,766
Total revenues	197,648	832,288	917,938	890,351
Operating expenses:
Depreciation	59,853	347,517	356,021	310,850
Interest, net	41,038	235,338	258,070	234,504
Selling, general and administrative (including non-cash share-based payment expense of $28,049, $10,678, $15,830 and $11,488, respectively)	23,189	93,671	77,034	76,025
Impairment of aircraft	62,657	425,579	7,404	0
Maintenance and other costs	1,703	20,005	24,828	8,961
Total operating expenses	188,440	1,122,110	723,357	630,340
Other income (expense):
Gain (Loss) on Extinguishment of Debt	(3,955)	(2,640)	(7,577)	0
Merger Expenses	(321)	(32,605)	(7,372)	0
Other	(94)	(191)	(4,492)	1,636
Total other income (expense)	(4,370)	(35,436)	(19,441)	1,636
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	4,838	(325,258)	175,140	261,647
Income tax provision	1,675	10,236	22,667	5,642
Earnings (loss) of unconsolidated equity method investment, net of tax	496	2,326	4,102	(8,086)
Net income (loss)	3,659	(333,168)	156,575	247,919
Derivatives used in Net Investment Hedge, Gain (Loss), Reclassified to Earnings, Net of Tax	0	0	184	1,166
Other Comprehensive Income, Other, Net of Tax	0	0	184	1,166
Total comprehensive income	3,659	(333,168)	156,759	249,085
Maintenance revenue
Revenues:
Revenue from contract with customer	41,214	172,668	74,987	105,738
Other revenue
Revenues:
Revenue from contract with customer	$ 9,183	$ 19,290	$ 10,357	$ 5,290

Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
	Feb. 29, 2020	Feb. 28, 2021	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Non-cash share-based payment expense	$ 10,678	$ 28,049	$ 15,830	$ 11,488

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
	Feb. 29, 2020	Feb. 28, 2021	Dec. 31, 2019	Dec. 31, 2018
Cash and Cash Equivalents, at Carrying Value	$ 166,083	$ 578,004	$ 140,882	$ 152,719
Repayments of Long-term Debt	268,799	1,697,662	1,817,558	969,139
Payment for Debt Extinguishment or Debt Prepayment Cost	2,685	1,524	7,183	0
Restricted Cash and Cash Equivalents	5,354	2,594	14,561	15,134
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	171,437	580,598	155,443	167,853
Net income	3,659	(333,168)	156,575	247,919
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	59,853	347,517	356,021	310,850
Amortization of deferred financing costs	2,446	14,791	14,578	14,627
Amortization of lease premiums, discounts and incentives	3,669	22,842	22,636	15,269
Deferred income taxes	1,453	6,506	20,223	(496)
Non-cash share-based payment expense	10,678	28,049	15,830	11,488
Cash flow hedges reclassified into earnings	0	0	184	1,166
Sales-type and Direct Financing Leases, Profit (Loss)	5,658	16,859	25,842	0
Security deposits and maintenance payments included in earnings	(47,293)	(135,115)	(49,029)	(80,628)
Gain on the sale of flight equipment	(15,354)	(33,536)	(45,532)	(36,766)
Gain (Loss) on Extinguishment of Debt	3,955	2,640	7,577	0
Impairment of aircraft	62,657	425,579	7,404	0
Provision for Loan and Lease Losses	288	5,258	0	0
Other	(402)	(2,305)	206	3,032
Changes on certain assets and liabilities:
Accounts receivable	(6,377)	(57,292)	(13,162)	(12,328)
Other assets	5,786	(66,290)	2,594	5,065
Accounts payable, accrued expenses and other liabilities	10,205	(13,655)	(5,483)	10,526
Lease rentals received in advance	143	(53,658)	19,954	32,868
Net Cash and Restricted Cash Provided by (Used in) Operating Activities	101,024	175,022	536,418	522,592
Cash flows from investing activities:
Acquisition and improvement of flight equipment	(23,035)	(145,589)	(1,172,370)	(1,317,497)
Proceeds from sale of flight equipment	103,679	180,342	361,747	338,831
Net investment in direct financing and sales-type leases	0	0	0	(15,783)
Proceeds from Collection of Finance Receivables	0	0	0	29,961
Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits	(4,614)	(13,024)	760	(15,494)
Unconsolidated equity method investment and associated costs	0	0	(15,175)	(3,350)
Distributions from unconsolidated equity method investment in excess of earnings	0	419	36,750	3,900
Other	(56)	(676)	4,259	4,745
Net cash and restricted cash provided by (used in) investing activities	75,974	21,472	(784,029)	(974,687)
Cash flows from financing activities:
Repurchase of shares	(2,370)	(25,536)	(36,739)	(71,421)
Proceeds from Contributions from Parent	0	25,536	0	0
Proceeds from secured and unsecured debt financings	100,000	1,932,943	2,116,848	1,413,901
Repayments of secured and unsecured debt financings	(268,799)	(1,697,662)	(1,817,558)	(969,139)
Deferred financing costs	0	(12,832)	(13,800)	(11,642)
Security deposits and maintenance payments received	29,806	87,510	202,833	203,925
Payment for Debt Extinguishment or Debt Prepayment Cost	(2,685)	(1,524)	(7,183)	0
Security deposits and maintenance payments returned	(16,956)	(71,743)	(117,872)	(90,803)
Dividends paid	0	(24,025)	(91,328)	(88,730)
Net cash and restricted cash provided by (used in) financing activities	(161,004)	212,667	235,201	386,091
Net increase (decrease) in cash and restricted cash	15,994	409,161	(12,410)	(66,004)
Cash and restricted cash at beginning of year	155,443	171,437	167,853	233,857
Cash and restricted cash at end of year	171,437	580,598	155,443	167,853
Supplemental disclosures of cash flow information:
Cash paid during the year for interest	21,487	241,011	246,026	214,350
Cash paid (received) during the year for income taxes	(15)	1,469	(656)	6,254
Supplemental disclosures of non-cash investing activities:
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets settled in sale of flight equipment	7,873	70,716	90,397	71,837
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets assumed in asset acquisitions	16,693	29,869	31,958	63,432
Transfers from Flight equipment held for lease to Net investment in direct financing and sales-type leases and Other assets	$ 31,821	$ 90,352	$ 104,838	$ 11,202

Consolidated Statements of Changes in Shareholders’ Equity - USD ($) $ in Thousands	Total	Restricted Stock Awards	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-In Capital	Retained Earnings (Deficit)	Retained Earnings (Deficit) Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)
Stockholders' Equity Attributable to Parent	$ 1,907,564		$ (188)	$ 787	$ 1,527,796	$ 380,331	$ (188)	$ (1,350)
Common Stock, Shares, Outstanding				78,707,963
Proceeds from Contributions from Parent	0
Issuance of common shares to stockholders, directors and employees	0			$ 4	(4)
Stock issued during period, shares, new issues				423,202
Repurchase of common shares from stockholders', directors and employees (in shares)				(3,676,654)
Net income	247,919					247,919
Repurchase of common shares from stockholders, directors and employees	(71,421)			$ (37)	(71,384)
Amortization of share-based payments	10,523				10,523
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	1,848				1,848
Dividends declared	(88,730)					(88,730)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax	1,166							1,166
Stockholders' Equity Attributable to Parent	2,008,681		690	$ 754	1,468,779	539,332	690	(184)
Common Stock, Shares, Outstanding				75,454,511
Proceeds from Contributions from Parent	0
Issuance of common shares to stockholders, directors and employees	0			$ 13	(13)
Stock issued during period, shares, new issues				1,281,598
Repurchase of common shares from stockholders', directors and employees (in shares)				(1,613,980)
Net income	156,575					156,575
Repurchase of common shares from stockholders, directors and employees	(36,739)			$ (16)	(36,723)
Amortization of share-based payments	13,825				13,825
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	796				796
Dividends declared	(91,328)					(91,328)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax	184							(184)
Stockholders' Equity Attributable to Parent	$ 2,052,684		$ (6,442)	$ 751	1,446,664	605,269	$ (6,442)	0
Common Stock, Shares, Outstanding	75,122,129			75,122,129
Proceeds from Contributions from Parent	$ 0
Issuance of common shares to stockholders, directors and employees	0			$ 1	(1)
Stock issued during period, shares, new issues				28,568
Repurchase of common shares from stockholders', directors and employees (in shares)				(73,903)
Net income	3,659					3,659
Repurchase of common shares from stockholders, directors and employees	(2,370)			$ (1)	(2,369)
Amortization of share-based payments	10,678				10,678
APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition	2,005				2,005
Dividends declared	(24,025)					(24,025)
Stockholders' Equity Attributable to Parent	$ 2,036,189			$ 751	1,456,977	578,461		0
Common Stock, Shares, Outstanding	75,076,794			75,076,794
Proceeds from Contributions from Parent	$ 25,536
Proceeds from Contributions from Parent	25,536
Net income	(333,168)					(333,168)
Amortization of share-based payments	$ 28,049				28,049
Number of non-vested equity instruments purchased on Merger Date	(25,536,000)	(101,809)
Shares canceled at Merger Date, value	$ 0			$ (750)	750
Shares Canceled at Merger Date	(74,960,937)
Payments for Unvested equity based instruments on Merger Date				(1)	(25,535)
Common Stock, Shares, Outstanding	14,048
Stockholders' Equity Attributable to Parent	$ 1,731,070			$ 0	$ 1,485,777	$ 245,293		$ 0
Common Stock, Shares, Outstanding	14,048			14,048

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
	Feb. 29, 2020	Feb. 28, 2021	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss)
Tax effect of change in fair value of derivatives	$ 0	$ 0	$ 0	$ 0

Summary of Significant Accounting Policies	12 Months Ended
Summary of Significant Accounting Policies	Feb. 28, 2021
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	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 commercial jet aircraft. On March 27, 2020, the Company successfully completed its merger (the “Merger”) and is now controlled by affiliates of Marubeni Corporation and Mizuho Leasing Company, Limited (“Mizuho Leasing”). As previously disclosed, on September 30, 2020, the Company’s Board of Directors unanimously agreed to change the Company’s fiscal year end to the twelve-month period ending on the last day in February. This change better aligns the Company’s financial reporting period with the financial reporting cycle of its shareholders, Marubeni Corporation and Mizuho Leasing. Aircastle is a holding company that conducts its business through subsidiaries. Aircastle directly or indirectly owns all the outstanding common shares of its subsidiaries. The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Company manages, analyzes and reports on its business and results of operations on the basis of one operating segment: leasing, financing, selling and managing commercial flight equipment. Our chief executive officer is the chief operating decision maker. Effective January 1, 2020, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326, Financial Instruments - Credit Losses (“ASC 326”). The standard applies to entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The standard affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and other financial assets not excluded from the scope that have the contractual right to receive cash. Net investment in leases comprised the Company’s financial asset principally affected by the standard. Operating lease receivables are not within the scope of ASC 326. Upon the Company’s adoption of ASC 326, our net investment in leases was recorded in the consolidated financial statements net of an allowance for credit losses. This allowance for credit losses reflects the Company’s estimate of lessee default probabilities and loss given default percentages. The estimate of expected credit losses considers relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of reported amounts. Our allowance also considers the potential loss due to non-credit risk related to unguaranteed residual values. We adopted the standard using the “modified retrospective” approach with a January 1, 2020 adjustment to retained earnings. The adoption of the standard did not have a material impact on our consolidated financial statements or related disclosures. Effective January 1, 2020, the Company adopted the FASB Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The standard modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The adoption of the standard did not have a material impact on our consolidated financial statements or related disclosures. Effective January 1, 2020, the Company adopted the FASB ASU No. 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. The standard requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use-software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The adoption of the standard did not have a material impact on our consolidated financial statements or related disclosures. Effective January 1, 2020, the Company adopted the FASB ASU No. 2018-17, Consolidation (Topic 810), Targeted Improvements to Related Party Guidance for Variable Interest Entities. The standard changes how all entities evaluate decision-making fees under the variable interest entity guidance. The standard is applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The adoption of the standard did not have a material impact on our consolidated financial statements or related disclosures. The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of February 28, 2021 through the date on which the consolidated financial statements included in this Annual Report were issued. Principles of Consolidation The consolidated financial statements include the accounts of Aircastle and all its subsidiaries. Aircastle consolidates two 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 financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying 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 U.S. 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 consist 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. Virtually all our cash and cash equivalents and restricted cash and cash equivalents are held or managed by three 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% to 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 manufacturer’s 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 assets or 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. For purchase and lease back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the fair value of the aircraft and lease. The fair value of the lease may include a maintenance premium and a lease premium or discount. 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 annually during the second quarter. In addition, a recoverability assessment is performed whenever events or changes in circumstances, or indicators, suggest 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 change in aircraft model’s storage levels, 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 lease rental and maintenance payments, future projected lease rates, transition costs, estimated down time, estimated residual or scrap values for an aircraft, economic conditions and other factors. 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 projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors. We are closely monitoring the impact of COVID-19 on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We will focus on our customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, aircraft with near-term lease expirations, and certain aircraft variants that are more susceptible to the impact of COVID-19 and value deterioration. Net Investment in Direct Financing and Sales-Type Leases If a lease meets specific criteria at lease commencement or at the effective date of a lease modification, we recognize the lease as a direct financing or sales-type lease. The net investment in direct financing and sales-type leases consists of the lease receivable, estimated unguaranteed residual value of the lease flight equipment at lease-end and, for direct financing leases, deferred selling profit. For sales-type leases, we recognize the difference between the net book value of the aircraft and the net investment in the lease as a gain or loss on sale of flight equipment. Selling profit on a direct financing lease is deferred and amortized over the lease term, and a selling loss is recognized at lease commencement. Interest income on our net investment in leases is recognized as Direct financing and sales-type leases revenue over the lease term in a manner that produces a constant rate of return on the net investment in the lease. The net investment in leases is recorded net of an allowance for credit losses. The allowance for credit losses is recorded upon the initial recognition of the net investment in the lease based on the Company’s estimate of expected credit losses over the lease term. The allowance reflects the Company’s estimate of lessee default probabilities and loss given default percentages. When determining the credit loss allowance, we consider relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the net investment in the lease. The allowance also considers potential losses due to non-credit risk related to unguaranteed residual values. A provision for credit losses is recorded as a component of Selling, general, and administrative expenses to adjust the allowance for changes to management’s estimate of expected credit losses. 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. The investment may also reflect an equity loss in the event that circumstances indicate an other-than-temporary impairment. 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 or termination. If a lease is terminated, we recognize security deposits in excess of outstanding lease payments as other revenue. Maintenance Payments Typically, under an operating lease, the lessee is responsible for performing all maintenance but they may also 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 than 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 typically 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 most monthly maintenance payments until we are able to determine the amount, if any, by which the monthly maintenance payments received from a lessee exceed costs to be incurred by that lessee in performing heavy maintenance, which generally occurs at or near the end of the lease. 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. The assumptions supporting these estimates are re-evaluated annually. 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. Lease Revenue Recognition We lease flight equipment under net operating leases with lease terms typically ranging from three to seven 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 lease term using the prevailing rate at lease commencement. Changes to rate-based lease rentals are recognized in the statements of income (loss) in the period of change. In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within Other assets. If we determine that the collectability of rental payments is no longer probable (including any deferral thereof), we recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue. COVID-19 has had an unprecedented negative impact on the global economy, and in particular on the aviation sector. As a result of COVID-19, there has been a dramatic slowdown in air traffic, with many markets in near complete shutdown. According to the International Air Transport Association (“IATA”), as of February 2021, air travel was down to approximately 30% of normal levels and a full recovery to pre-pandemic levels is not expected for several years. Substantially all the world’s airlines are experiencing financial difficulties and liquidity challenges. While we believe the long-term demand for air travel will return to historical trends over time, the near-term impacts of COVID-19’s economic shock are material; the extent and duration of which cannot currently be determined. Airlines have been seeking to preserve liquidity through a combination of requesting government support, raising debt and equity, delaying or canceling new aircraft orders, furloughing employees, as well as requesting deferrals from lessors. We have agreed to defer near-term lease payments with certain of our airline customers, which they are obliged to repay over time. As of April 15, 2021, we have agreed to defer approximately $108,400 in near-term lease payments of which approximately $87,400 are included in Accounts receivable or Other assets as of February 28, 2021. This represents approximately 17% of Lease rental and Direct financing and sales-type lease revenues for the twelve months ended February 28, 2021. These deferrals have been agreed to with 26 airlines, representing 35% of our customer base, for an average deferral of five months of lease rentals. In certain situations, we have agreed to broader restructurings of contractual terms, for example obtaining better security packages, term extensions, or other valuable considerations in exchange for short-term economic concessions. If air traffic remains depressed over an extended period and if our customers are unable to obtain sufficient funds from private, governmental or other sources, we may need to grant additional deferrals to our customers or extend the periods of repayment for deferrals we have already made. We may ultimately not be able to collect all the amounts we have deferred. As of April 15, 2021, seven of our customers are subject to judicial insolvency proceedings or similar protection. We lease 23 aircraft to these customers, which comprise 14% of our net book value of flight equipment (including Flight equipment held for lease and Net investment in leases) and 12% of our Lease rental and direct financing and sales-type lease revenue as of and for the year ended February 28, 2021. One of these customers is LATAM, our second largest customer, which represents 8% of our net book value of flight equipment and 6% of our Lease rental revenue as of and for the year ended February 28, 2021. Based on historic experience, the judicial process can take anywhere from twelve months to eighteen months to be resolved. We are actively engaged in the various judicial proceedings to protect our economic interests. As a result of these proceedings, the recognition of lease rental revenue for certain customers may be done on a cash basis of accounting rather than the accrual method depending on the customers lease security arrangements. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other gains and losses, net of income taxes, if any, affecting shareholders’ equity that, under U.S. GAAP, are excluded from net income (loss). Share-Based Compensation Aircastle recognized compensation cost relating to share-based payment transactions in the financial statements based on the fair value of the equity instruments issued. Aircastle used the straight-line method of accounting for compensation cost on share-based payment awards that contained pro-rata vesting provisions. Deferred Financing Costs Deferred financing costs, which are included in borrowings from secured and unsecured financings, net of debt issuance costs, in the Consolidated Balance Sheets, are amortized using the interest method for amortizing loans over the lives of the relevant related debt. Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard applies to entities that have contracts, such as debt agreements, lease agreements or derivative instruments, which reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Entities can elect not to apply certain modification accounting requirements for contract modifications that replace a reference rate affected by reference rate reform. If elected, such contracts are accounted for as a continuation of the existing contract and no reassessments or re-measurements are required. The standard is effective for all entities from March 12, 2020 through December 31, 2022 and does not apply to contract modifications made after December 31, 2022. We have not adopted ASC 848 and are currently evaluating the election available to us under the standard and the impact it may have on our financial statements. In April 2020, the FASB Staff issued a question-and-answer document (the “Q&A”) regarding accounting for lease concessions related to the effects of the COVID-19 pandemic. The Q&A provides that entities may elect to apply or not apply the lease modification guidance in ASC 842, “Leases,” for lease concessions provided by lessors as a result of the COVID-19 pandemic. The Company has elected not to apply the lease modification guidance in ASC 842 for such lease concessions – see “Lease Revenue Recognition” above.

Fair Value Measurements Fair Value Measurements (Notes)

12 Months Ended

Feb. 28, 2021

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

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 February 28, 2021, February 29, 2020 and December 31, 2019 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 February 28, 2021		Fair Value Measurements at February 28, 2021 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3		Valuation Technique
Assets:
Cash and cash equivalents	$	578,004	$	578,004	$	—	$	—	Market
Restricted cash and cash equivalents	2,594		2,594		—		—		Market

Total	$	580,598	$	580,598	$	—	$	—


	Fair Value as of February 29, 2020		Fair Value Measurements at February 29, 2020 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3		Valuation Technique
Assets:
Cash and cash equivalents	$	166,083	$	166,083	$	—	$	—	Market
Restricted cash and cash equivalents	5,354		5,354		—		—		Market
Derivative assets	19		—		19		—		Market
Total	$	171,456	$	171,437	$	19	$	—


	Fair Value as of December 31, 2019		Fair Value Measurements at December 31, 2019 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3		Valuation Technique
Assets:
Cash and cash equivalents	$	140,882	$	140,882	$	—	$	—	Market
Restricted cash and cash equivalents	14,561		14,561		—		—		Market
Derivative assets	115		—		115		—		Market
Total	$	155,558	$	155,443	$	115	$	—

Our cash and cash equivalents, along with our restricted cash and cash equivalents, consist largely of money market securities that are 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 derivative included in Level 2 consists of United States dollar-denominated interest rate cap, and its fair value is based on the market comparisons for similar instruments. We also considered the credit rating and risk of the counterparty providing the interest rate cap based on quantitative and qualitative factors.

For the years ended February 28, 2021, the two months ended February 29, 2020 and the year ended December 31, 2019, we had no transfers into or out of Level 3.

We measure the fair value of certain assets and liabilities on a non-recurring basis, when U.S. GAAP requires the application of fair value, including events or changes in circumstances that indicate the carrying amounts of these assets may not be recoverable. Assets subject to these measurements include our investment in unconsolidated joint ventures and aircraft. 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 the average of the market approach that uses Level 2 inputs, which include third party appraisal data and an income approach that uses Level 3 inputs, which include the Company’s assumptions and appraisal data as to future cash proceeds from leasing and selling aircraft discounted using the Company’s weighted average cost of capital.

We account for our investment in unconsolidated joint ventures under the equity method of accounting. Investments are recorded at cost and are adjusted by undistributed earnings and losses and the distributions of dividends and capital. These investments are also reviewed for impairment whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary.

Aircraft Valuation

Impairment of Flight Equipment

During the year ended February 28, 2021, the Company recorded impairment charges totaling $425,579, of which $378,247 were transactional impairments, which primarily related to seventeen narrow-body and eight wide-body aircraft. The Company recognized $157,014 of maintenance revenue and security deposits into revenue related to these 25 aircraft during the year ended February 28, 2021. The impairment charges were attributable to early lease terminations, scheduled lease expirations, lessee defaults and/or judicial insolvency proceedings, or as a result of our annual recoverability assessment – refer to the section below for additional details.

In February 2020, the Company initiated a process to accept the redelivery of four wide-body aircraft prior to their scheduled lease expirations due to a lessee default. As a result, the Company recorded impairment charges of $62,657 and recognized $47,367 of maintenance revenue and security deposits into revenue during the first two months of 2020.

During the year ended December 31, 2019, the Company recognized net maintenance revenue of $17,554 related to the early lease terminations of seven narrow-body aircraft due to lessee default. We recorded impairment charges of $7,404 related to two of these seven narrow-body aircraft. We did not record any transactional impairments during 2018.

Annual Recoverability Assessment

We completed our annual recoverability assessment of our aircraft in the second quarter. Of the $425,579 impairment charges recorded for the year ended February 28, 2021, we recorded $43,041 related to one narrow-body and one wide-body aircraft as a result our annual recoverability assessment. Although we have completed our annual recoverability assessment, we continue to monitor the developments of COVID-19. We are closely monitoring the impact of COVID-19 on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on our customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, aircraft with near-term lease expirations, and certain aircraft variants that are more susceptible to the impact of COVID-19 and value deterioration.

The 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.

If our estimates or assumptions change, including those related to our customers that have entered judicial insolvency proceedings, we may revise our cash flow assumptions and record future impairment charges. While we believe that the estimates and related assumptions used in the annual recoverability assessment, and subsequent assessments, are appropriate, actual results could differ from those estimates.

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 value of our senior notes is estimated using quoted market prices. The fair values of all our other financings are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements.

The carrying amounts and fair values of our financial instruments at February 28, 2021, February 29, 2020 and December 31, 2019 are as follows:


	February 28, 2021				February 29, 2020				December 31, 2019
	Carrying Amount of Liability		Fair Value of Liability		Carrying Amount of Liability		Fair Value of Liability		Carrying Amount of Liability		Fair Value of Liability
Credit Facilities	$	—	$	—	$	100,000	$	100,000	$	150,000	$	150,000
Unsecured Term Loan	215,000		210,290		215,000		215,000		215,000		215,000
ECA Financings	36,423		37,942		50,745		52,593		147,644		150,805
Bank Financings	738,353		740,086		971,693		1,002,620		993,593		1,010,482
Senior Notes	4,200,000		4,402,722		3,600,000		3,807,956		3,600,000		3,787,268

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

Feb. 28, 2021

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 February 28, 2021 were as follows:


Year Ended February 28/29,	Amount
2022	$	649,983
2023	572,094
2024	506,232
2025	373,664
2026	224,947
Thereafter	323,066
Total	$	2,649,986

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


	Year Ended February 28,		Two Months Ended February 29,		Year Ended December 31,
Region	2021		2020		2019		2018
Asia and Pacific	40	%	43	%	43	%	36	%
Europe	31	%	26	%	27	%	28	%
Middle East and Africa	6	%	7	%	10	%	11	%
North America	12	%	11	%	9	%	9	%
South America	11	%	13	%	11	%	16	%

Total	100	%	100	%	100	%	100	%

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

The following table shows the number of lessees with lease rental revenue of at least 5% of total lease rental revenue and their combined total percentage of lease rental revenue for the periods indicated:


	Year Ended February 28,			Two Months Ended February 29,			Year Ended December 31,
	2021			2020			2019		2018
	Number of Lessees	Combined % of Lease Rental Revenue		Number of Lessees	Combined % of Lease Rental Revenue		Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue
Largest lessees by lease rental revenue	4	30	%	3	21	%	2	16%	3	18%

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


	Year Ended February 28,				Two Months Ended February 29,				Year Ended December 31,
	2021				2020				2019				2018
Country	Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue		Revenue		% of Total Revenue
Brazil(1)	$	—	—	%	$	—	—	%	$	—	—	%	$	116,527	13	%
India(2)	99,522		12	%	—		—	%	115,865		13	%	—		—	%
Indonesia(3)	—		—	%	25,373		13	%	—		—	%	—		—
Mexico(4)	89,314		11	%	—		—	%	—		—	%	—		—
South Africa(5)	—		—	%	50,781		26	%	—		—	%	—		—

______________

(1)For the year ended December 31, 2018, total revenue attributable to Brazil included $72,242 of maintenance revenue due to early lease terminations as a result of lessee default. Total revenue attributable to Brazil was less than 10% for the years ended February 28, 2021 and December 31, 2019, and for the two months ended February 29, 2020.

(2)For the year ended February 28, 2021 total revenue attributable to India included maintenance and other revenue, including early lease termination fees and security deposits recognized into revenue, totaling $19,138. For the year ended December 31, 2019, total revenue attributable to India included maintenance revenue of $14,915. Total revenue attributable to India was less than 10% for the year ended December 31, 2018 and for the two months ended February 29, 2020.

(3)For the two months ended February 29, 2020, total revenue attributable to Indonesia included $14,987 of gain on sale of flight equipment. Total revenue attributable to Indonesia was less than 10% for the years ended February 28, 2021, and December 31, 2019 and 2018.

(4)For the year ended February 28, 2021, total revenue attributable to Mexico included maintenance and other revenue, including early lease termination fees and security deposits recognized into revenue, totaling $79,799. Total revenue attributable to Mexico was less than 10% for the years ended December 31, 2019 and 2018, and for the two months ended February 29, 2020.

(5)For the two months ended February 29, 2020, total revenue attributable to South Africa included $47,367 of maintenance revenue and security deposits recognized into revenue. Total revenue attributable to South Africa was less than 10% for the years ended February 28, 2021, and December 31, 2019 and 2018.

Geographic concentration of net book value of flight equipment (including flight equipment held for lease and net investment in direct financing and sales-type leases, or “net book value”) was as follows:


	February 28, 2021				February 29, 2020				December 31, 2019
Region	Number of Aircraft		Net Book Value %		Number of Aircraft		Net Book Value %		Number of Aircraft		Net Book Value %
Asia and Pacific	79		37	%	90		38	%	94		38	%
Europe	92		27	%	99		27	%	99		26	%
Middle East and Africa	11		4	%	15		6	%	16		7	%
North America	28		12	%	40		13	%	40		13	%
South America	26		13	%	26		15	%	26		15	%
Off-lease	16	(1)	7	%	2	(2)	1	%	3	(3)	1	%
Total	252		100	%	272		100	%	278		100	%

______________

(1)Consisted of one Airbus A320-200 and one Airbus A330-200 aircraft subject to executed leases with a customer in Europe, four Boeing 737-800 aircraft subject to executed leases or confirmed letters of intent with customers in Europe,, one Boeing 737-800 aircraft consigned for sale and four Airbus A320-200, three Airbus A330-200, and two Boeing 737-800 aircraft which we are marketing for lease or sale.

(2)Consisted of one Airbus A330-200 aircraft, which was delivered to a customer in Europe in August 2020, and one Boeing 737-800 aircraft, which is subject to a confirmed letter intent to lease with a customer in Europe.

(3)Consisted of one Airbus A320-200 aircraft, which was delivered on lease to a customer in Europe in February 2020, one Airbus A330-200 aircraft, which was delivered to a customer in Europe in the second quarter of 2020, and one Boeing 737-800 aircraft, which was sold in February 2020.

The following table sets forth net book value of flight equipment (includes net book value of flight equipment held for lease and net investment in direct financing and sales-type leases) 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:


	February 28, 2021				February 29, 2020				December 31, 2019
Region	Net Book Value		Net Book Value %	Number of Lessees	Net Book Value		Net Book Value %	Number of Lessees	Net Book Value		Net Book Value %	Number of Lessees
India	$	756,514	11%	3	$	917,793	12%	4	$	924,190	12%	4

At February 28, 2021, February 29, 2020 and December 31, 2019, the amounts of lease incentive liabilities recorded in maintenance payments on the Consolidated Balance Sheets were $14,673, $10,076 and $9,176, respectively.

Unconsolidated Equity Method Investment

12 Months Ended

Feb. 28, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Unconsolidated Equity Method Investment

Unconsolidated Equity Method Investment

We have a joint venture with Mizuho Leasing that has nine aircraft with a net book value of $312,029 at February 28, 2021.


	Amount
Investment in joint ventures at December 31, 2019	$	32,974
Earnings from joint venture, net of tax	496
Investment in joint ventures at February 29, 2020	33,470
Distributions	(419)
Earnings from joint venture, net of tax	2,326

Investment in joint ventures at February 28, 2021	$	35,377

Variable Interest Entities	12 Months Ended
Variable Interest Entities	Feb. 28, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities	Variable Interest Entities Aircastle consolidates two VIEs (the “Air Knight VIEs”), of which it is the primary beneficiary. The operating activities of these Air Knight VIEs are limited to acquiring, owning, leasing, maintaining, operating and, under certain circumstances, selling the two aircraft discussed below. During February 2020, we repaid the export credit agency (the “ECA Financings”) for four of the six aircraft owned by the Air Knight VIEs, which included principal and accrued interest amounts outstanding of $95,128 and incurred early extinguishment costs of $3,955. In June 2020, the leases of the four aircraft subject to the ECA Financings were formally terminated and the aircraft were released as security under such financings. The only assets that the Air Knight VIEs have on their books are net investments in leases that are eliminated in the consolidated financial statements. The related aircraft, with a net book value as of February 28, 2021 of $89,320, were included in our flight equipment held for lease. The consolidated debt outstanding, net of debt issuance costs, of the Air Knight VIEs as of February 28, 2021 is $36,058.

Borrowings from Secured and Unsecured Debt Financings

12 Months Ended

Feb. 28, 2021

Debt Disclosure [Abstract]

Borrowings from Secured and Unsecured Debt Financings

The outstanding amounts of our secured and unsecured term debt financings were as follows:


	At February 28, 2021					At February 29, 2020		At December 31, 2019
Debt Obligation	Outstanding Borrowings		Number of Aircraft	Interest Rate	Final Stated Maturity	Outstanding Borrowings		Outstanding Borrowings
Secured Debt Financings:
ECA Financings(1)	$	36,423	2	3.49% to 3.96%	12/03/21 to 11/30/24	$	50,745	$	147,644
Bank Financings(2)	738,353		31	2.31% to 4.55%	06/17/23 to 03/06/25	971,693		993,593
Less: Debt Issuance Costs	(5,926)					(9,920)		(11,892)
Total secured debt financings, net of debt issuance costs and discounts	768,850		33			1,012,518		1,129,345
Unsecured Debt Financings:
Senior Notes due 2020(3)	—			7.625%	04/15/20	300,000		300,000
Senior Notes due 2021(4)	—			5.125%	03/15/21	500,000		500,000
Senior Notes due 2022	500,000			5.500%	02/15/22	500,000		500,000
Senior 5.00% Notes due 2023	500,000			5.000%	04/01/23	500,000		500,000
Senior 4.40% Notes due 2023	650,000			4.400%	09/25/23	650,000		650,000
Senior Notes due 2024	500,000			4.125%	05/01/24	500,000		500,000
Senior Notes due 2025	650,000			5.250%	08/11/25	—		—
Senior Notes due 2026	650,000			4.250%	06/15/26	650,000		650,000
Senior Notes due 2028	750,000			2.850%	01/26/28	—		—
Unsecured Term Loan	215,000			1.683%	03/07/22 to 03/07/24	215,000		215,000
Revolving Credit Facilities	—			1.25% to 2.00%	7/30/21 to 06/27/22	100,000		150,000
Less: Debt issuance costs and discounts	(48,739)					(30,765)		(32,509)
Total unsecured debt financings, net of debt issuance costs and discounts	4,366,261					3,884,235		3,932,491

Total secured and unsecured debt financings, net of debt issuance costs and discounts	$	5,135,111				$	4,896,753	$	5,061,836

_______________

(1)The borrowings under these financings at February 28, 2021 have a weighted-average rate of interest of 3.58%. During February 2020, the Company repaid the ECA Financings for four aircraft owned by the Air Knight VIEs, which were released as security for such financings during the second quarter of 2020 – see Note 6.

(2)The borrowings under these financings at February 28, 2021 have a weighted-average fixed rate of interest of 3.24%.

(3)Repaid on April 15, 2020.

(4)Repaid on February 25, 2021.

Secured Debt Financings:

Bank Financings

During the fourth quarter of 2021, we prepaid bank financings secured by three wide-body aircraft, which included principal amounts outstanding of $145,934 and incurred early extinguishment costs of $1,148, primarily related to the write-off of deferred financing costs.

Unsecured Debt Financings:

Senior Notes due 2020

On April 15, 2020, the Company repaid $300,000 aggregate principal amount of 7.625% Senior Notes due 2020 due at their final stated maturity date.

Senior Notes due 2025

On August 11, 2020, the Company issued $650,000 aggregate principal amount of Senior Notes due 2025 (the “Senior Notes due 2025”) at an issue price of 99.057%. The Senior Notes due 2025 will mature on August 11, 2025 and bear interest at a rate of 5.25% per annum, payable semi-annually on February 11 and August 11 of each year, commencing on February 11, 2021. Interest accrues on the Senior Notes due 2025 from August 11, 2020.

Senior Notes due 2028 and 2021

On January 26, 2021, the Company issued $750,000 aggregate principal amount of Senior Notes due 2028 (the “Senior Notes due 2028”) at an issue price of 98.543%. The Senior Notes due 2028 will mature on January 26, 2028 and bear interest at a rate of 2.85% per annum, payable semi-annually on January 26 and July 26 of each year, commencing on July 26, 2021. Interest accrues on the Senior Notes due 2028 from January 26, 2021. The net proceeds from the issuance were used to redeem the balance of our 5.125% Senior Notes due 2021, including accrued interest of $11,389 and call premium of $1,265, on February 25, 2021.

Revolving Credit Facility

On July 30, 2020, the Company entered into a $150,000 unsecured revolving credit facility with Mizuho Bank Ltd., a related party. The facility bears interest at a rate of LIBOR plus 2%, or a base rate plus 1%, matures on July 31, 2021 and includes a one-year extension option. This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.

As of February 28, 2021, we had no borrowings outstanding under our revolving credit facilities and had $1,250,000 available.

Maturities of the secured and unsecured debt financings over the next five years and thereafter are as follows:


Year Ending February 28/29,	Amount
2022	$	646,943
2023	81,611
2024	1,532,697
2025	800,859
2026	727,666
Thereafter	1,400,000
Total	$	5,189,776

As of February 28, 2021, we were in compliance with all applicable covenants in our financings.

Shareholders' Equity and Share Based Payment	12 Months Ended
Shareholders' Equity and Share Based Payment	Feb. 28, 2021
Shareholders’ Equity and Share Based Payment [Abstract]
Shareholders’ Equity and Share Based Payment	Shareholders’ Equity and Share-Based Payment On March 27, 2020 (the “Merger Date”), the total authorized share capital of the Company was $3,000, comprised of 250,000,000 common shares of $0.01 each and 50,000,000 preference shares of $0.01 each, and the issued share capital of the Company was comprised of 14,048 common shares of $0.01 each. In December 2019, the Company accelerated the vesting of certain restricted common share awards and the vesting and payment of certain Performance Share Units (“PSUs”) held by the Company’s executive officers, initially granted under the Aircastle Limited Amended and Restated 2014 Omnibus Incentive Plan. Share-based compensation expense of $914 related to restricted common shares and $4,247 related to PSUs represents the cost of this accelerated vesting from March 1, 2020 through the Merger Date. As per the Agreement and Plan of Merger, dated as of November 5, 2019 (the “Merger Agreement”), on the Merger Date, the Company paid $4,063 and $21,473 representing the payment for 126,971 unvested restricted common shares and 671,030 unvested PSUs, respectively. Concurrently, the Company received $25,536 from MM Air Limited, which was recorded as an additional paid-in-capital as of the Merger Date. Included in share-based compensation expense for the year ended February 28, 2021 is $3,921 and $18,967 related to remaining outstanding restricted common shares and remaining outstanding PSUs, respectively, that were accelerated and paid out (in the case of PSUs, at the maximum level of performance) in accordance with the Merger Agreement. On February 13, 2020, the Company declared a dividend of $0.32 per common share and paid $24,025 on March 6, 2020, to all shareholders of record as of February 28, 2020.

Related Party Disclosures	12 Months Ended
Related Party Disclosures	Feb. 28, 2021
Related Party Transactions [Abstract]
Related Party Transactions Disclosure	Related Party Transactions On April 10, 2020, we sold two engines to Magellan Aviation Group LLLP, an affiliate of Marubeni, for $5,355 for a minimal gain. This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy. On July 30, 2020, the Company entered into a $150,000 unsecured revolving credit facility with Mizuho Bank Ltd., a related party – see Note 7 for additional information. On February 24, 2021, the Company entered into an intra-company service agreement with Marubeni, whereby Marubeni will provide management services, strategy consultancy, and general administrative support to the Company for an annual fee of $1,680.

Income Taxes

12 Months Ended

Feb. 28, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned. The Company received an assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035. Consequently, the provision for income taxes relates to income earned by certain subsidiaries of the Company which are located in, or earn income in, jurisdictions that impose income taxes, primarily the United States and Ireland.

The sources of income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment for the year ended February 28, 2021, the two months ended February 29, 2020, and the years ended December 31, 2019 and 2018, were as follows:


	Year Ended February 28,		Two Months Ended February 29,		Year Ended December 31,
	2021		2020		2019		2018
U.S. operations	$	31,848	$	3,084	$	9,085	$	8,104
Non-U.S. operations	(357,106)		1,754		166,055		253,543
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	$	(325,258)	$	4,838	$	175,140	$	261,647

The components of the income tax provision from continuing operations for the year ended February 28, 2021, the two months ended February 29, 2020, and the years ended December 31, 2019 and 2018, consisted of the following:


	Year Ended February 28,		Two Months Ended February 29,		Year Ended December 31,
	2021		2020		2019		2018
Current:
United States:
Federal	$	(1,232)	$	6	$	782	$	2,446
State	121		—		437		(136)
Non-U.S.	4,842		217		1,225		3,828
Current income tax provision	3,731		223		2,444		6,138
Deferred:
United States:
Federal	3,150		1,578		7,205		2,901
State	1,598		561		2,018		759
Non-U.S.	1,757		(687)		11,000		(4,156)
Deferred income tax provision (benefit)	6,505		1,452		20,223		(496)
Total	$	10,236	$	1,675	$	22,667	$	5,642

Significant components of the Company’s deferred tax assets and liabilities at February 28, 2021, February 29, 2020, and December 31, 2019 and 2018, consisted of the following:


	Year Ended February 28,		Two Months Ended February 29,		Year Ended December 31,
	2021		2020		2019		2018
Deferred tax assets:
Non-cash share-based payments	$	—	$	215	$	614	$	2,182
Net operating loss carry forwards	95,462		74,045		69,806		48,660

Other	37,612		54,259		72,732		1,795
Total deferred tax assets	133,074		128,519		143,152		52,637
Deferred tax liabilities:
Accelerated depreciation	(170,382)		(140,363)		(136,268)		(95,107)
Other	(37,179)		(53,448)		(70,551)		(338)
Total deferred tax liabilities	(207,561)		(193,811)		(206,819)		(95,445)

Net deferred tax liabilities	$	(74,487)	$	(65,292)	$	(63,667)	$	(42,808)

The Company had $86,365 of federal net operating loss (“NOL”) carry forwards available at February 28, 2021 to offset future taxable income subject to U.S. graduated tax rates. If not utilized, $45,821 of these carry forwards will expire by 2037, with $40,544 of these carry forwards having no expiration date. The Company also had NOL carry forwards of $567,657 with no expiration date to offset future Irish taxable income. Deferred tax assets and liabilities are included in Other assets and Accounts payable and accrued liabilities, respectively.

We do not expect to incur income taxes on future distributions of undistributed earnings of non-U.S. subsidiaries and accordingly, no deferred income taxes have been provided for the distributions of such earnings. As of February 28, 2021, we have elected to permanently reinvest our accumulated undistributed U.S. earnings of $36,503. Accordingly, no U.S. withholding taxes have been provided. Withholding tax of $1,825 would be due if such earnings were remitted.

Our aircraft-owning subsidiaries that are recognized as corporations for U.S. tax purposes are primarily non-U.S. corporations. These subsidiaries generally earn income from sources outside the United States and typically are not subject to U.S. federal, state or local income taxes. The aircraft owning subsidiaries resident in Ireland, Mauritius and the U.S. are subject to tax in those respective jurisdictions.

We have a U.S.-based subsidiary which provides management services to our subsidiaries and is subject to U.S. federal, state and local income taxes. We also have Ireland and Singapore based subsidiaries which provide management services to our non-U.S. subsidiaries and are subject to tax in those respective jurisdictions.

Differences between statutory income tax rates and our effective income tax rates applied to pre-tax income from continuing operations for the year ended February 28, 2021, the two months ended February 29, 2020, and the years ended December 31, 2019 and 2018, consisted of the following:


	Year Ended February 28,		Two Months Ended February 29,		Year Ended December 31,
	2021		2020		2019		2018
Notional U.S. federal income tax expense at the statutory rate:	$	(68,304)	$	1,016	$	36,779	$	54,946
U.S. state and local income tax, net	1,723		390		1,549		525
Non-U.S. operations:
Bermuda	82,190		(1,845)		(16,950)		(41,064)
Ireland	1,545		(1,147)		(99)		(2,567)
Singapore	75		(6)		(28)		(3,232)
Other low tax jurisdictions	(381)		2,533		(2,504)		(3,246)
Non-deductible expenses in the U.S.	(1,904)		734		3,581		157
Other	(4,708)		—		339		123

Provision for income taxes	$	10,236	$	1,675	$	22,667	$	5,642

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.

We conduct business globally and, as a result, the Company and its subsidiaries or branches are subject to foreign, U.S. federal and various state and local income taxes, as well as withholding taxes. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Ireland and the United States.

Our policy is that we will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the year.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Interest, Net

12 Months Ended

Feb. 28, 2021

Interest Income (Expense), Net [Abstract]

Interest, Net

The following table shows the components of interest, net for the year ended February 28, 2021, the two months ended February 29, 2020, and the years ended December 31, 2019 and 2018:


	Year Ended February 28,		Two Months Ended February 29,		Year Ended December 31,
	2021		2020		2019		2018
Interest on borrowings, net settlements on interest rate derivatives, and other liabilities	$	221,246	$	38,915	$	245,673	$	221,987

Amortization of deferred losses related to interest rate derivatives	—		—		184		1,166
Amortization of deferred financing fees and debt discount	14,791		2,446		14,578		14,627
Interest expense	236,037		41,361		260,435		237,780
Less: Interest income	(523)		(323)		(2,365)		(2,943)
Less: Capitalized interest	(176)		—		—		(333)
Interest, net	$	235,338	$	41,038	$	258,070	$	234,504

Commitments and Contingencies

12 Months Ended

Feb. 28, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Rent expense, primarily for the corporate office and sales and marketing facilities, was $1,626, $278, $1,601 and $2,865 for the year ended February 28, 2021, the two months ended February 29, 2020, and the years ended December 31, 2019 and 2018, respectively.

As of February 28, 2021, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in Stamford, Connecticut; Dublin, Ireland; and Singapore for future minimum lease payments as follows:


Year Ending February 28/29,	Amount
2022	$	1,928
2023	1,787
2024	1,719
2025	1,750
2026	1,781
Thereafter	4,063
Total	$	13,028

At February 28, 2021, we had commitments to acquire 25 new E-Jet E2 aircraft from Embraer S.A. for $825,119.

Remaining commitments, including $101,933 of progress payments, contractual price escalations and other adjustments for these aircraft at February 28, 2021, net of amounts already paid, are as follows:


Year Ending February 28/29,	Amount
2022	$	199,990
2023	347,979
2024	125,825
2025	39,404
2026	111,921
Thereafter	—
Total	$	825,119

As of April 15, 2021, we have commitments to acquire 25 aircraft for $825,119.

Other Assets

12 Months Ended

Feb. 28, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

The following table describes the principal components of Other assets on our Consolidated Balance Sheets as of:


	February 28,		February 29,		December 31,
	2021		2020		2019
Deferred income tax asset	$	637	$	636	$	1,007
Lease incentives and premiums, net of accumulated amortization of $75,126, $63,010 and $71,851, respectively	75,169		103,161		112,923
Flight equipment held for sale	53,289		13,083		333
Aircraft purchase deposits and Embraer E-2 progress payments	52,092		39,038		33,754


Right-of-use asset(1)	8,056		9,148		9,329
Deferred rent receivable	69,103		4,494		—
Other assets	53,598		37,057		43,863

Total other assets	$	311,944	$	206,617	$	201,209

______________

(1)Net of lease incentives and tenant allowances.

Accounts Payable, Accrued Expenses and Other Liabilities

12 Months Ended

Feb. 28, 2021

Payables and Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts Payable, Accrued Expenses and Other LiabilitiesThe following table describes the principal components of Accounts payable, accrued expenses and other liabilities recorded on our Consolidated Balance Sheets as of:


	February 28,		February 29,		December 31,
	2021		2020		2019
Accounts payable and accrued expenses	$	43,088	$	64,034	$	47,228
Deferred income tax liability	75,124		65,928		64,674
Accrued interest payable	43,676		62,196		44,694
Lease liability	11,003		12,510		12,800
Lease discounts, net of accumulated amortization of $44,887, $44,968 and $44,696, respectively	1,376		2,446		2,718


Total accounts payable, accrued expenses and other liabilities	$	174,267	$	207,114	$	172,114

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Feb. 28, 2021
Accounting Policies [Abstract]
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 commercial jet aircraft.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Aircastle and all its subsidiaries. Aircastle consolidates two 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.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. 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, Restricted Cash and Cash Equivalents	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 consist 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. Virtually all our cash and cash equivalents and restricted cash and cash equivalents are held or managed by three major financial institutions.
Lessor, Leases [Policy Text Block]	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% to 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 manufacturer’s 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 assets or 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. For purchase and lease back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the fair value of the aircraft and lease. The fair value of the lease may include a maintenance premium and a lease premium or discount. 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. 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. The assumptions supporting these estimates are re-evaluated annually. 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.
Impairment of Flight Equipment	Impairment of Flight Equipment We perform a recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis annually during the second quarter. In addition, a recoverability assessment is performed whenever events or changes in circumstances, or indicators, suggest 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 change in aircraft model’s storage levels, 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 lease rental and maintenance payments, future projected lease rates, transition costs, estimated down time, estimated residual or scrap values for an aircraft, economic conditions and other factors. 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 projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors. We are closely monitoring the impact of COVID-19 on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We will focus on our customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, aircraft with near-term lease expirations, and certain aircraft variants that are more susceptible to the impact of COVID-19 and value deterioration.
Net Investment in Finance Leases	Net Investment in Direct Financing and Sales-Type Leases If a lease meets specific criteria at lease commencement or at the effective date of a lease modification, we recognize the lease as a direct financing or sales-type lease. The net investment in direct financing and sales-type leases consists of the lease receivable, estimated unguaranteed residual value of the lease flight equipment at lease-end and, for direct financing leases, deferred selling profit. For sales-type leases, we recognize the difference between the net book value of the aircraft and the net investment in the lease as a gain or loss on sale of flight equipment. Selling profit on a direct financing lease is deferred and amortized over the lease term, and a selling loss is recognized at lease commencement. Interest income on our net investment in leases is recognized as Direct financing and sales-type leases revenue over the lease term in a manner that produces a constant rate of return on the net investment in the lease. The net investment in leases is recorded net of an allowance for credit losses. The allowance for credit losses is recorded upon the initial recognition of the net investment in the lease based on the Company’s estimate of expected credit losses over the lease term. The allowance reflects the Company’s estimate of lessee default probabilities and loss given default percentages. When determining the credit loss allowance, we consider relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the net investment in the lease. The allowance also considers potential losses due to non-credit risk related to unguaranteed residual values. A provision for credit losses is recorded as a component of Selling, general, and administrative expenses to adjust the allowance for changes to management’s estimate of expected credit losses.
Unconsolidated Equity Method Investment	Unconsolidated Equity Method InvestmentAircastle 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.
Security Deposits	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 or termination. If a lease is terminated, we recognize security deposits in excess of outstanding lease payments as other revenue.
Maintenance Payments	Maintenance Payments Typically, under an operating lease, the lessee is responsible for performing all maintenance but they may also 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 than 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 typically 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 most monthly maintenance payments until we are able to determine the amount, if any, by which the monthly maintenance payments received from a lessee exceed costs to be incurred by that lessee in performing heavy maintenance, which generally occurs at or near the end of the lease. 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.
Income Taxes	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.
Lease Revenue Recognition	Lease Revenue Recognition We lease flight equipment under net operating leases with lease terms typically ranging from three to seven 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 lease term using the prevailing rate at lease commencement. Changes to rate-based lease rentals are recognized in the statements of income (loss) in the period of change. In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within Other assets. If we determine that the collectability of rental payments is no longer probable (including any deferral thereof), we recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue. COVID-19 has had an unprecedented negative impact on the global economy, and in particular on the aviation sector. As a result of COVID-19, there has been a dramatic slowdown in air traffic, with many markets in near complete shutdown. According to the International Air Transport Association (“IATA”), as of February 2021, air travel was down to approximately 30% of normal levels and a full recovery to pre-pandemic levels is not expected for several years. Substantially all the world’s airlines are experiencing financial difficulties and liquidity challenges. While we believe the long-term demand for air travel will return to historical trends over time, the near-term impacts of COVID-19’s economic shock are material; the extent and duration of which cannot currently be determined. Airlines have been seeking to preserve liquidity through a combination of requesting government support, raising debt and equity, delaying or canceling new aircraft orders, furloughing employees, as well as requesting deferrals from lessors. We have agreed to defer near-term lease payments with certain of our airline customers, which they are obliged to repay over time. As of April 15, 2021, we have agreed to defer approximately $108,400 in near-term lease payments of which approximately $87,400 are included in Accounts receivable or Other assets as of February 28, 2021. This represents approximately 17% of Lease rental and Direct financing and sales-type lease revenues for the twelve months ended February 28, 2021. These deferrals have been agreed to with 26 airlines, representing 35% of our customer base, for an average deferral of five months of lease rentals. In certain situations, we have agreed to broader restructurings of contractual terms, for example obtaining better security packages, term extensions, or other valuable considerations in exchange for short-term economic concessions. If air traffic remains depressed over an extended period and if our customers are unable to obtain sufficient funds from private, governmental or other sources, we may need to grant additional deferrals to our customers or extend the periods of repayment for deferrals we have already made. We may ultimately not be able to collect all the amounts we have deferred. As of April 15, 2021, seven of our customers are subject to judicial insolvency proceedings or similar protection. We lease 23 aircraft to these customers, which comprise 14% of our net book value of flight equipment (including Flight equipment held for lease and Net investment in leases) and 12% of our Lease rental and direct financing and sales-type lease revenue as of and for the year ended February 28, 2021. One of these customers is LATAM, our second largest customer, which represents 8% of our net book value of flight equipment and 6% of our Lease rental revenue as of and for the year ended February 28, 2021. Based on historic experience, the judicial process can take anywhere from twelve months to eighteen months to be resolved. We are actively engaged in the various judicial proceedings to protect our economic interests. As a result of these proceedings, the recognition of lease rental revenue for certain customers may be done on a cash basis of accounting rather than the accrual method depending on the customers lease security arrangements.
Comprehensive Income	Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other gains and losses, net of income taxes, if any, affecting shareholders’ equity that, under U.S. GAAP, are excluded from net income (loss).
Share Based Compensation	Share-Based Compensation Aircastle recognized compensation cost relating to share-based payment transactions in the financial statements based on the fair value of the equity instruments issued. Aircastle used the straight-line method of accounting for compensation cost on share-based payment awards that contained pro-rata vesting provisions.
Deferred Financing Costs	Deferred Financing Costs Deferred financing costs, which are included in borrowings from secured and unsecured financings, net of debt issuance costs, in the Consolidated Balance Sheets, are amortized using the interest method for amortizing loans over the lives of the relevant related debt.
Recent Unadopted Accounting Pronouncements	Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The standard applies to entities that have contracts, such as debt agreements, lease agreements or derivative instruments, which reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Entities can elect not to apply certain modification accounting requirements for contract modifications that replace a reference rate affected by reference rate reform. If elected, such contracts are accounted for as a continuation of the existing contract and no reassessments or re-measurements are required. The standard is effective for all entities from March 12, 2020 through December 31, 2022 and does not apply to contract modifications made after December 31, 2022. We have not adopted ASC 848 and are currently evaluating the election available to us under the standard and the impact it may have on our financial statements. In April 2020, the FASB Staff issued a question-and-answer document (the “Q&A”) regarding accounting for lease concessions related to the effects of the COVID-19 pandemic. The Q&A provides that entities may elect to apply or not apply the lease modification guidance in ASC 842, “Leases,” for lease concessions provided by lessors as a result of the COVID-19 pandemic. The Company has elected not to apply the lease modification guidance in ASC 842 for such lease concessions – see “Lease Revenue Recognition” above.