ayr-20221130
0001362988FALSE2022Q32/28P3Y0M0DSubsequent Event00013629882022-03-012022-11-300001362988us-gaap:CommonStockMember2022-03-012022-11-300001362988us-gaap:PreferredStockMember2022-03-012022-11-3000013629882023-01-06xbrli:shares00013629882022-11-30iso4217:USD00013629882022-02-28iso4217:USDxbrli:shares00013629882022-09-012022-11-3000013629882021-09-012021-11-3000013629882021-03-012021-11-3000013629882021-02-2800013629882021-11-300001362988us-gaap:CommonStockMember2022-02-280001362988us-gaap:PreferredStockMember2022-02-280001362988us-gaap:AdditionalPaidInCapitalMember2022-02-280001362988us-gaap:RetainedEarningsMember2022-02-2800013629882022-03-012022-05-310001362988us-gaap:CommonStockMember2022-05-310001362988us-gaap:PreferredStockMember2022-05-310001362988us-gaap:AdditionalPaidInCapitalMember2022-05-310001362988us-gaap:RetainedEarningsMember2022-05-3100013629882022-05-3100013629882022-06-012022-08-310001362988us-gaap:RetainedEarningsMember2022-06-012022-08-310001362988us-gaap:CommonStockMember2022-08-310001362988us-gaap:PreferredStockMember2022-08-310001362988us-gaap:AdditionalPaidInCapitalMember2022-08-310001362988us-gaap:RetainedEarningsMember2022-08-3100013629882022-08-310001362988us-gaap:CommonStockMember2022-11-300001362988us-gaap:PreferredStockMember2022-11-300001362988us-gaap:AdditionalPaidInCapitalMember2022-11-300001362988us-gaap:RetainedEarningsMember2022-11-300001362988us-gaap:CommonStockMember2021-02-280001362988us-gaap:PreferredStockMember2021-02-280001362988us-gaap:AdditionalPaidInCapitalMember2021-02-280001362988us-gaap:RetainedEarningsMember2021-02-2800013629882021-03-012021-05-310001362988us-gaap:CommonStockMember2021-05-310001362988us-gaap:PreferredStockMember2021-05-310001362988us-gaap:AdditionalPaidInCapitalMember2021-05-310001362988us-gaap:RetainedEarningsMember2021-05-3100013629882021-05-3100013629882021-06-012021-08-310001362988us-gaap:PreferredStockMember2021-06-012021-08-310001362988us-gaap:AdditionalPaidInCapitalMember2021-06-012021-08-310001362988us-gaap:RetainedEarningsMember2021-06-012021-08-310001362988us-gaap:CommonStockMember2021-08-310001362988us-gaap:PreferredStockMember2021-08-310001362988us-gaap:AdditionalPaidInCapitalMember2021-08-310001362988us-gaap:RetainedEarningsMember2021-08-3100013629882021-08-310001362988us-gaap:AdditionalPaidInCapitalMember2021-09-012021-11-300001362988us-gaap:CommonStockMember2021-11-300001362988us-gaap:PreferredStockMember2021-11-300001362988us-gaap:AdditionalPaidInCapitalMember2021-11-300001362988us-gaap:RetainedEarningsMember2021-11-30ayr:segment0001362988us-gaap:FlightEquipmentMemberus-gaap:PropertySubjectToOperatingLeaseMembersrt:MinimumMember2022-11-300001362988us-gaap:FlightEquipmentMemberus-gaap:PropertySubjectToOperatingLeaseMembersrt:MaximumMember2022-11-30xbrli:pure0001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-11-300001362988us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-11-300001362988us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-11-300001362988us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-11-300001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-02-280001362988us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-02-280001362988us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-02-280001362988us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-02-280001362988ayr:ImpairmentsNotRelatedToRussianInvasionOfUkraineMember2022-09-012022-11-300001362988ayr:NarrowbodyMemberayr:TransactionalMember2022-09-012022-11-30ayr:aircraft0001362988ayr:FleetReviewMemberayr:WidebodyMember2022-09-012022-11-300001362988ayr:MaintenanceAndSecurityDepositMember2022-09-012022-11-300001362988ayr:ImpairmentsNotRelatedToRussianInvasionOfUkraineMember2022-03-012022-11-300001362988ayr:NarrowbodyMemberayr:TransactionalMember2022-03-012022-11-300001362988ayr:MaintenanceAndSecurityDepositMember2022-03-012022-11-300001362988ayr:AircraftRemainingInCountryOfBaseOperationsMemberayr:RussianInvasionOfUkraineMemberayr:NarrowbodyMembercountry:RU2022-03-012022-11-300001362988ayr:FreighterMemberayr:AircraftRemainingInCountryOfBaseOperationsMemberayr:RussianInvasionOfUkraineMembercountry:RU2022-03-012022-11-300001362988ayr:RussianInvasionOfUkraineMember2022-03-012022-11-300001362988ayr:MaintenanceAndSecurityDepositMemberayr:RussianInvasionOfUkraineMember2022-03-012022-11-300001362988ayr:TotalWideBodyAndNarrowBodyMemberayr:AircraftRemainingInCountryOfBaseOperationsMemberayr:RussianInvasionOfUkraineMembercountry:RU2022-03-012022-11-300001362988ayr:ImpairmentsNotRelatedToRussianInvasionOfUkraineMember2021-09-012021-11-300001362988ayr:NarrowbodyMemberayr:TransactionalMember2021-09-012021-11-300001362988ayr:TransactionalMemberayr:WidebodyMember2021-09-012021-11-300001362988ayr:TransactionalMember2021-09-012021-11-300001362988ayr:ImpairmentsNotRelatedToRussianInvasionOfUkraineMember2021-03-012021-11-300001362988ayr:NarrowbodyMemberayr:TransactionalMember2021-03-012021-11-300001362988ayr:TransactionalMemberayr:WidebodyMember2021-03-012021-11-300001362988ayr:TransactionalMember2021-03-012021-11-300001362988ayr:FleetReviewMember2022-09-012022-11-300001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel2Memberus-gaap:RevolvingCreditFacilityMember2022-11-300001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel2Memberus-gaap:RevolvingCreditFacilityMember2022-11-300001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel2Memberus-gaap:RevolvingCreditFacilityMember2022-02-280001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel2Memberus-gaap:RevolvingCreditFacilityMember2022-02-280001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberayr:DBJTermLoanMember2022-11-300001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberayr:DBJTermLoanMember2022-11-300001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberayr:DBJTermLoanMember2022-02-280001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberayr:DBJTermLoanMember2022-02-280001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:EcaTermFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-11-300001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:EcaTermFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-11-300001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:EcaTermFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-02-280001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:EcaTermFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-02-280001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:BankFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-11-300001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:BankFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-11-300001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:BankFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-02-280001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SecuredDebtMemberayr:BankFinancingsMemberus-gaap:FairValueInputsLevel2Member2022-02-280001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberus-gaap:SeniorNotesMember2022-11-300001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberus-gaap:SeniorNotesMember2022-11-300001362988us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberus-gaap:SeniorNotesMember2022-02-280001362988us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:UnsecuredDebtMemberus-gaap:FairValueInputsLevel1Memberus-gaap:SeniorNotesMember2022-02-280001362988us-gaap:FlightEquipmentMember2022-02-280001362988us-gaap:FlightEquipmentMember2022-03-012022-11-300001362988us-gaap:FlightEquipmentMember2022-11-300001362988ayr:AircraftRemainingInCountryOfBaseOperationsMembercountry:RU2022-03-012022-11-300001362988ayr:FreighterMembercountry:GBayr:AircraftOutsideCountryOfBaseOperationsMember2022-03-012022-11-300001362988ayr:FreighterMembercountry:GBus-gaap:MaintenanceMember2022-03-012022-11-300001362988ayr:FreighterMember2022-09-012022-11-300001362988ayr:WidebodyMember2022-09-012022-11-300001362988ayr:FreighterAndWidebodyAircraftMember2022-09-012022-11-300001362988country:RU2022-03-012022-11-300001362988country:RU2022-11-300001362988ayr:MaintenancePaymentsMember2022-11-300001362988ayr:MaintenancePaymentsMember2022-02-280001362988srt:AsiaPacificMember2022-11-300001362988srt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2022-03-012022-11-300001362988srt:AsiaPacificMember2022-02-280001362988srt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2021-03-012022-02-280001362988srt:EuropeMember2022-11-300001362988srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2022-03-012022-11-300001362988srt:EuropeMember2022-02-280001362988srt:EuropeMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2021-03-012022-02-280001362988ayr:MiddleEastandAfricaMember2022-11-300001362988ayr:MiddleEastandAfricaMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2022-03-012022-11-300001362988ayr:MiddleEastandAfricaMember2022-02-280001362988ayr:MiddleEastandAfricaMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2021-03-012022-02-280001362988srt:NorthAmericaMember2022-11-300001362988srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2022-03-012022-11-300001362988srt:NorthAmericaMember2022-02-280001362988srt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMemberayr:LeasedAssetsMember2021-03-012022-02-280001362988srt:SouthAmericaMember2022-11-300001362988us-gaap:GeographicConcentrationRiskMembersrt:SouthAmericaMemberayr:LeasedAssetsMember2022-03-012022-11-300001362988srt:SouthAmericaMember2022-02-280001362988us-gaap:GeographicConcentrationRiskMembersrt:SouthAmericaMemberayr:LeasedAssetsMember2021-03-012022-02-280001362988us-gaap:GeographicConcentrationRiskMemberayr:OffLeaseMemberayr:LeasedAssetsMember2022-03-012022-11-300001362988us-gaap:GeographicConcentrationRiskMemberayr:OffLeaseMemberayr:LeasedAssetsMember2021-03-012022-02-2800013629882021-03-012022-02-280001362988ayr:NarrowbodyMemberus-gaap:SubsequentEventMember2023-01-060001362988us-gaap:SubsequentEventMemberayr:WidebodyMember2023-01-060001362988us-gaap:SubsequentEventMemberayr:NumberOfOffLeaseAircraftMarketedForLeaseOrSaleFromPriorYearMemberayr:WidebodyMember2023-01-060001362988country:IN2022-11-300001362988country:IN2022-03-012022-11-30ayr:Lessee0001362988country:IN2022-02-280001362988country:IN2021-03-012022-02-280001362988ayr:LeaseRevenueMembersrt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMember2022-09-012022-11-300001362988ayr:LeaseRevenueMembersrt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMember2021-09-012021-11-300001362988ayr:LeaseRevenueMembersrt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMember2022-03-012022-11-300001362988ayr:LeaseRevenueMembersrt:AsiaPacificMemberus-gaap:GeographicConcentrationRiskMember2021-03-012021-11-300001362988ayr:LeaseRevenueMembersrt:EuropeMemberus-gaap:GeographicConcentrationRiskMember2022-09-012022-11-300001362988ayr:LeaseRevenueMembersrt:EuropeMemberus-gaap:GeographicConcentrationRiskMember2021-09-012021-11-300001362988ayr:LeaseRevenueMembersrt:EuropeMemberus-gaap:GeographicConcentrationRiskMember2022-03-012022-11-300001362988ayr:LeaseRevenueMembersrt:EuropeMemberus-gaap:GeographicConcentrationRiskMember2021-03-012021-11-300001362988ayr:LeaseRevenueMemberayr:MiddleEastandAfricaMemberus-gaap:GeographicConcentrationRiskMember2022-09-012022-11-300001362988ayr:LeaseRevenueMemberayr:MiddleEastandAfricaMemberus-gaap:GeographicConcentrationRiskMember2021-09-012021-11-300001362988ayr:LeaseRevenueMemberayr:MiddleEastandAfricaMemberus-gaap:GeographicConcentrationRiskMember2022-03-012022-11-300001362988ayr:LeaseRevenueMemberayr:MiddleEastandAfricaMemberus-gaap:GeographicConcentrationRiskMember2021-03-012021-11-300001362988ayr:LeaseRevenueMembersrt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMember2022-09-012022-11-300001362988ayr:LeaseRevenueMembersrt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMember2021-09-012021-11-300001362988ayr:LeaseRevenueMembersrt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMember2022-03-012022-11-300001362988ayr:LeaseRevenueMembersrt:NorthAmericaMemberus-gaap:GeographicConcentrationRiskMember2021-03-012021-11-300001362988ayr:LeaseRevenueMemberus-gaap:GeographicConcentrationRiskMembersrt:SouthAmericaMember2022-09-012022-11-300001362988ayr:LeaseRevenueMemberus-gaap:GeographicConcentrationRiskMembersrt:SouthAmericaMember2021-09-012021-11-300001362988ayr:LeaseRevenueMemberus-gaap:GeographicConcentrationRiskMembersrt:SouthAmericaMember2022-03-012022-11-300001362988ayr:LeaseRevenueMemberus-gaap:GeographicConcentrationRiskMembersrt:SouthAmericaMember2021-03-012021-11-300001362988ayr:MajorCustomerGroupOneMember2022-09-012022-11-300001362988ayr:LeaseRevenueMemberus-gaap:CustomerConcentrationRiskMemberayr:MajorCustomerGroupOneMember2022-09-012022-11-300001362988ayr:MajorCustomerGroupOneMember2021-09-012021-11-300001362988ayr:LeaseRevenueMemberus-gaap:CustomerConcentrationRiskMemberayr:MajorCustomerGroupOneMember2021-09-012021-11-300001362988ayr:MajorCustomerGroupOneMember2022-03-012022-11-300001362988ayr:LeaseRevenueMemberus-gaap:CustomerConcentrationRiskMemberayr:MajorCustomerGroupOneMember2022-03-012022-11-300001362988ayr:MajorCustomerGroupOneMember2021-03-012021-11-300001362988ayr:LeaseRevenueMemberus-gaap:CustomerConcentrationRiskMemberayr:MajorCustomerGroupOneMember2021-03-012021-11-300001362988ayr:TotalRevenueMemberus-gaap:GeographicConcentrationRiskMembercountry:US2022-09-012022-11-300001362988country:US2022-09-012022-11-300001362988ayr:TotalRevenueMemberus-gaap:GeographicConcentrationRiskMembercountry:US2022-03-012022-11-300001362988country:US2022-03-012022-11-300001362988us-gaap:EquityMethodInvesteeMember2022-11-300001362988us-gaap:UnsecuredDebtMemberayr:MizuhoLeasing2021UnsecuredLoanFacilityJVMemberus-gaap:CorporateJointVentureMember2022-06-300001362988ayr:EcaTermFinancingsMemberus-gaap:NotesPayableOtherPayablesMember2022-11-300001362988us-gaap:SecuredDebtMemberayr:EcaTermFinancingsMember2022-11-300001362988ayr:EcaTermFinancingsMemberus-gaap:NotesPayableOtherPayablesMember2022-02-280001362988ayr:BankFinancingsMemberus-gaap:NotesPayableToBanksMember2022-11-300001362988us-gaap:SecuredDebtMemberayr:BankFinancingsMember2022-11-300001362988ayr:BankFinancingsMembersrt:MinimumMemberus-gaap:NotesPayableToBanksMember2022-11-300001362988ayr:BankFinancingsMemberus-gaap:NotesPayableToBanksMembersrt:MaximumMember2022-11-300001362988ayr:BankFinancingsMemberus-gaap:NotesPayableToBanksMember2022-02-280001362988us-gaap:SecuredDebtMember2022-11-300001362988us-gaap:SecuredDebtMember2022-02-280001362988ayr:A5.00Memberus-gaap:SeniorNotesMemberayr:SeniorNotesDue2023Member2022-11-300001362988ayr:A5.00Memberus-gaap:SeniorNotesMemberayr:SeniorNotesDue2023Member2022-02-280001362988ayr:A4.40Memberus-gaap:SeniorNotesMemberayr:SeniorNotesDue2023Member2022-11-300001362988ayr:A4.40Memberus-gaap:SeniorNotesMemberayr:SeniorNotesDue2023Member2022-02-280001362988ayr:SeniorNotesDue2024Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:A4125Memberayr:SeniorNotesDue2024Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:SeniorNotesDue2024Memberus-gaap:SeniorNotesMember2022-02-280001362988ayr:SeniorNotesDue2025Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:SeniorNotesDue2025Memberayr:A525Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:SeniorNotesDue2025Memberus-gaap:SeniorNotesMember2022-02-280001362988ayr:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:A4.25Memberayr:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2022-02-280001362988ayr:SeniorNotesDue2028Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:A285Memberayr:SeniorNotesDue2028Memberus-gaap:SeniorNotesMember2022-11-300001362988ayr:SeniorNotesDue2028Memberus-gaap:SeniorNotesMember2022-02-280001362988ayr:FloatingRateTermLoanMemberayr:FloatingRateTermLoanMember2022-11-300001362988ayr:FloatingRateTermLoanMemberus-gaap:NotesPayableToBanksMember2022-11-300001362988ayr:FloatingRateTermLoanMemberayr:FloatingRateTermLoanMember2022-02-280001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-11-300001362988ayr:FloatingRateTermLoanMemberus-gaap:RevolvingCreditFacilityMember2022-11-300001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-02-280001362988us-gaap:UnsecuredDebtMember2022-11-300001362988us-gaap:UnsecuredDebtMember2022-02-280001362988ayr:EcaTermFinancingsMemberus-gaap:NotesPayableOtherPayablesMember2022-03-012022-11-300001362988ayr:BankFinancingsMemberus-gaap:NotesPayableOtherPayablesMember2022-11-300001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMember2022-11-210001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMemberayr:EBITDARatioMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMemberayr:ConsolidatedInterestExpensePaidInCashRatioMemberayr:A2022SecuredFacilityMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMembersrt:MaximumMember2022-11-212022-11-210001362988srt:MinimumMemberus-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMembersrt:MinimumMemberayr:A2022SecuredFacilityMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMembersrt:MaximumMember2022-11-212022-11-210001362988us-gaap:SecuredDebtMemberayr:A2022SecuredFacilityMember2022-11-300001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberayr:DBS2018UnsecuredRevolvingCreditFacilityMember2022-05-24ayr:numberOfRevolvingCreditFacilities0001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberayr:DBS2018UnsecuredRevolvingCreditFacilityMember2022-05-240001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberayr:DBS2018UnsecuredRevolvingCreditFacilityMember2022-11-300001362988us-gaap:RevolvingCreditFacilityMemberayr:TrancheBRevised35mmDBSRevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberayr:DBS2018UnsecuredRevolvingCreditFacilityMember2022-11-300001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberayr:DBS2018UnsecuredRevolvingCreditFacilityMemberayr:TrancheC245mmDBSRevolvingCreditFacilityMember2022-11-300001362988us-gaap:RevolvingCreditFacilityMemberayr:A2016RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-06-272022-06-270001362988us-gaap:RevolvingCreditFacilityMemberus-gaap:RevolvingCreditFacilityMemberayr:A2016RevolvingCreditFacilityMember2022-09-080001362988us-gaap:RevolvingCreditFacilityMemberayr:A2016RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-06-270001362988us-gaap:RevolvingCreditFacilityMemberayr:A2016RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-09-070001362988us-gaap:RevolvingCreditFacilityMemberayr:A2016RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-09-080001362988us-gaap:RevolvingCreditFacilityMemberayr:A2016RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-09-082022-09-080001362988us-gaap:RevolvingCreditFacilityMemberayr:MizuhoBankLtd2020UnsecuredRevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-07-302022-07-300001362988ayr:MarubeniServiceAgreementMember2022-09-012022-11-300001362988ayr:MarubeniServiceAgreementMember2021-09-012021-11-300001362988ayr:MarubeniServiceAgreementMember2022-03-012022-11-300001362988ayr:MarubeniServiceAgreementMember2021-03-012021-11-300001362988ayr:MarubeniAffiliatePartsManagementServicesAndSupplyAgreementMember2022-09-012022-11-300001362988ayr:MarubeniAffiliatePartsManagementServicesAndSupplyAgreementMember2021-09-012021-11-300001362988ayr:MarubeniAffiliatePartsManagementServicesAndSupplyAgreementMember2022-03-012022-11-300001362988ayr:MarubeniAffiliatePartsManagementServicesAndSupplyAgreementMember2021-03-012021-11-300001362988ayr:PreDeliveryPaymentsMember2022-11-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________
FORM 10-Q
_______________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission File number 001-32959
_______________________________________________________________
AIRCASTLE LIMITED
(Exact name of registrant as specified in its charter)
_______________________________________________________________
Bermuda98-0444035
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
c/o Aircastle Advisor LLC
201 Tresser Boulevard, Suite 400
Stamford
Connecticut
06901
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code:     (203) 504-1020
_______________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class                             Trading Symbol Name of Each Exchange on Which Registered
Common Shares, par value $0.01 per share N/A NONE
Preference Shares, par value $0.01 per shareN/ANONE
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  
The aggregate market value of the Registrant’s Common Shares based upon the closing price on the New York Stock Exchange on August 31, 2022 (the last business day of registrant’s most recently completed second fiscal quarter), beneficially owned by non-affiliates of the Registrant was $0 because the Registrant’s Common Shares were not publicly traded as of that date. For purposes of the foregoing calculation, which is required by Form 10-K, the Registrant has included in the shares owned by affiliates those shares owned by directors and executive officers and shareholders owning 10% or more of the outstanding common shares of the Registrant, and such inclusion shall not be construed as an admission that any such person is an affiliate for any purpose.
As of January 6, 2023, there were 14,048 outstanding shares of the registrant’s common shares, par value $0.01 per share.



Aircastle Limited and Subsidiaries
Form 10-Q
Table of Contents
 
  Page
No.
Item 1.
Consolidated Balance Sheets as of November 30, 2022 and February 28, 2022
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and nine months ended November 30, 2022 and 2021
Consolidated Statements of Cash Flows for the nine months ended November 30, 2022 and 2021
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2


PART I. — FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)

November 30,
2022
February 28,
2022
(Unaudited)
ASSETS
Cash and cash equivalents$208,208 $167,891 
Restricted cash and cash equivalents 2,791 
Accounts receivable39,087 63,666 
Flight equipment held for lease, net6,445,141 6,313,950 
Net investment in leases, net125,504 150,325 
Unconsolidated equity method investment40,097 38,317 
Other assets328,978 356,326 
Total assets$7,187,015 $7,093,266 
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Borrowings from secured financings, net$656,032 $684,039 
Borrowings from unsecured financings, net3,842,816 3,835,841 
Accounts payable, accrued expenses and other liabilities208,273 177,424 
Lease rentals received in advance52,688 37,361 
Security deposits64,856 69,189 
Maintenance payments494,058 459,713 
Total liabilities5,318,723 5,263,567 
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Preference shares, $0.01 par value, 50,000,000 shares authorized, 400 (aggregate liquidation preference of $400,000) shares issued and outstanding at November 30, 2022 and February 28, 2022
  
Common shares, $0.01 par value, 250,000,000 shares authorized, 14,048 shares issued and outstanding at November 30, 2022 and February 28, 2022
  
Additional paid-in capital1,878,774 1,878,774 
Accumulated deficit(10,482)(49,075)
Total shareholders’ equity1,868,292 1,829,699 
Total liabilities and shareholders’ equity$7,187,015 $7,093,266 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3


Aircastle Limited and Subsidiaries
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Dollars in thousands)
(Unaudited)
Three Months Ended November 30,Nine Months Ended November 30,
2022202120222021
Revenues:
Lease rental revenue$142,336 $156,088 $432,988 $425,802 
Direct financing and sales-type lease revenue2,087 2,724 6,950 8,377 
Amortization of lease premiums, discounts and incentives(3,763)(8,867)(14,669)(20,026)
Maintenance revenue 56,574 33,510 103,787 81,204 
Total lease revenue197,234 183,455 529,056 495,357 
Gain on sale of flight equipment53,473 7,420 67,209 17,944 
Other revenue6,809 605 10,394 1,641 
Total revenues257,516 191,480 606,659 514,942 
Operating expenses:
Depreciation82,872 84,526 246,296 250,308 
Interest, net50,757 50,515 151,638 163,965 
Selling, general and administrative17,999 17,141 55,358 48,714 
Provision for credit losses854 958 1,543 970 
Impairment of flight equipment29,880 69,111 67,979 110,926 
Maintenance and other costs3,783 8,660 17,010 24,275 
Total operating expenses186,145 230,911 539,824 599,158 
Other income (expense):
Loss on extinguishment of debt  (463)(14,156)
Other1,201 63 3,273 57,682 
Total other income1,201 63 2,810 43,526 
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment72,572 (39,368)69,645 (40,690)
Income tax provision23,071 23,504 22,332 22,877 
Earnings of unconsolidated equity method investment, net of tax603 465 1,780 1,210 
Net income (loss)$50,104 $(62,407)$49,093 $(62,357)
Preference share dividends  (10,500)(5,658)
Net income (loss) available to common shareholders$50,104 $(62,407)$38,593 $(68,015)
Total comprehensive income (loss) available to common shareholders$50,104 $(62,407)$38,593 $(68,015)
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4


Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Nine Months Ended November 30,
20222021
Cash flows from operating activities:
Net income (loss)$49,093 $(62,357)
Adjustments to reconcile net income (loss) to net cash and restricted cash provided by operating activities:
Depreciation246,296 250,308 
Amortization of deferred financing costs10,612 12,483 
Amortization of lease premiums, discounts and incentives14,669 20,026 
Deferred income taxes13,227 8,998 
Collections on net investment in leases5,444 11,727 
Security deposits and maintenance payments included in earnings(35,437)(58,480)
Gain on sale of flight equipment(67,209)(17,944)
Loss on extinguishment of debt463 14,156 
Impairment of flight equipment67,979 110,926 
Provision for credit losses1,543 970 
Other(1,778)(1,210)
Changes in certain assets and liabilities:
Accounts receivable11,368 4,059 
Other assets2,223 (23,305)
Accounts payable, accrued expenses and other liabilities8,947 7,205 
Lease rentals received in advance16,091 (6,127)
Net cash and restricted cash provided by operating activities343,531 271,435 
Cash flows from investing activities:
Acquisition and improvement of flight equipment(688,722)(533,741)
Proceeds from sale of flight equipment334,164 127,584 
Aircraft purchase deposits and progress payments, net of deposits returned and aircraft sales deposits7,765 (11,361)
Other1,500 (64)
Net cash and restricted cash used in investing activities(345,293)(417,582)
Cash flows from financing activities:
Net proceeds from preference share issuance 393,347 
Proceeds from secured and unsecured debt financings139,800  
Repayments of secured and unsecured debt financings(163,543)(566,885)
Debt extinguishment costs(291)(13,372)
Deferred financing costs(8,674)(5,170)
Security deposits and maintenance payments received110,675 63,012 
Security deposits and maintenance payments returned(17,679)(20,696)
Dividends paid(21,000)(5,658)
Net cash and restricted cash provided by (used in) financing activities39,288 (155,422)
Net increase in cash and restricted cash:37,526 (301,569)
Cash and restricted cash at beginning of period170,682 580,598 
Cash and restricted cash at end of period$208,208 $279,029 
The accompanying notes are an integral part of these unaudited consolidated financial statements.



5



Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
(Dollars in thousands)
(Unaudited)
Nine Months Ended November 30,
20222021
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents$208,208 $276,289 
Restricted cash and cash equivalents 2,740 
Unrestricted and restricted cash and cash equivalents$208,208 $279,029 
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized$138,999 $151,743 
Cash paid for income taxes$4,602 $308 
Supplemental disclosures of non-cash investing activities:
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets assumed in asset acquisitions$4,005 $11,570 
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets settled in sale of flight equipment$18,672 $14,765 
Transfers from flight equipment held for lease to Net investment in leases and Other assets
$1,695 $22,134 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
6


Aircastle Limited and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
(Dollars in thousands, except share amounts)
(Unaudited)
 Common SharesPreference SharesAdditional Paid-In CapitalAccumulated DeficitTotal Shareholders’ Equity
SharesAmountSharesAmount
Balance, February 28, 2022
14,048 $ 400 $ $1,878,774 $(49,075)$1,829,699 
Net income— — — — — 7,682 7,682 
Balance, May 31, 2022
14,048 $ 400 $ $1,878,774 $(41,393)$1,837,381 
Net loss— — — — — (8,693)(8,693)
Preference share dividends— — — — — (10,500)(10,500)
Balance, August 31, 2022
14,048 $ 400 $ $1,878,774 $(60,586)$1,818,188 
Net income— — — — — 50,104 50,104 
Balance, November 30, 202214,048 $ 400 $ $1,878,774 $(10,482)$1,868,292 
Common SharesPreference SharesAdditional Paid-In CapitalRetained EarningsTotal Shareholders’ Equity
SharesAmountSharesAmount
Balance, February 28, 202114,048 $  $ $1,485,777 $245,293 $1,731,070 
Net loss— — — — — (9,753)(9,753)
Balance, May 31, 202114,048 $  $ $1,485,777 $235,540 $1,721,317 
Net income— — — — — 9,803 9,803 
Issuance of preference shares— — 400 — 393,362 — 393,362 
Preference share dividends— — — — — (5,658)(5,658)
Balance, August 31, 202114,048 $ 400 $ $1,879,139 $239,685 $2,118,824 
Net loss— — — — — (62,407)(62,407)
Issuance of preference shares— — — — (365)— (365)
Balance, November 30, 202114,048 $ 400 $ $1,878,774 $177,278 $2,056,052 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
7

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022

Note 1. Summary of Significant Accounting Policies
Organization
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 consists of acquiring, leasing, managing and selling commercial jet aircraft.
The Company is controlled by affiliates of Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing”). Aircastle is a holding company and conducts its business through subsidiaries that are wholly-owned, either directly or indirectly, by Aircastle.
Basis of Presentation and Principles of Consolidation
The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
The accompanying consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. However, we believe that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2022.
The consolidated financial statements include the accounts of Aircastle and all its subsidiaries, including any Variable Interest Entity (“VIE”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.
We manage and analyze our business and report on our results of operations based on one operating segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker.
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 November 30, 2022, through the date on which the consolidated financial statements included in this Form 10-Q were issued.
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 to Aircastle. 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 early 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 its 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
8

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
Aircastle believes the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.
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.
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.
Should we determine that the collectability of rental payments is no longer probable, including any deferral thereof, we will 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.
Impairment of Flight Equipment
We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis. A recoverability assessment is also 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 an aircraft type’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 and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft. In the event that an aircraft does not meet the recoverability test, the aircraft will be adjusted to fair value, resulting in an impairment charge. See Note 2 in the Notes to Unaudited Consolidated Financial Statements.
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, such as the location of the aircraft and accessibility to records and technical documentation.
We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, 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 aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.
Recent Accounting Pronouncements
In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2022-06 to defer the sunset date of Reference Rate Reform Topic 848 (“ASC 848”). U.S. GAAP requires
9

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
entities to evaluate whether a contract modification, such as the replacement or change of a reference rate, results in the establishment of a new contract or continuation of an existing contract. ASC 848 allows an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform as entities transition away from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. The standard provides this temporary election through December 31, 2024, and cannot be applied to contract modifications that occur after December 31, 2024. Reference rate reform will primarily impact our lease and debt arrangements for which floating-rate lease rentals and interest expense are based on LIBOR. As of November 30, 2022, less than 1% of our fleet have floating-rate lease rentals and for the three and nine months ended November 30, 2022, 7% and 9%, respectively, of our interest expense was derived from floating-rate debt which is referenced to LIBOR. We have not adopted ASC 848 and are evaluating the election available to us under the standard.
Note 2. 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 the use of unobservable inputs.
The following tables set forth our financial assets as of November 30, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets 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 Measurements at November 30, 2022
Using Fair Value Hierarchy
 
Fair Value as of
November 30, 2022
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Valuation
Technique
Assets:
Cash and cash equivalents$208,208 $208,208 $ $ Market
Total$208,208 $208,208 $ $ 
  
Fair Value Measurements at February 28, 2022
Using Fair Value Hierarchy
 
Fair Value as of February 28, 2022
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Valuation
Technique
Assets:
Cash and cash equivalents$167,891 $167,891 $ $ Market
Restricted cash and cash equivalents2,791 2,791   Market
Total$170,682 $170,682 $ $ 
Our 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.
We had no transfers into or out of Level 3 during the three and nine months ended November 30, 2022.
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 aircraft and investment in unconsolidated joint venture. We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value
10

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
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 venture under the equity method of accounting. Our investment is recorded at cost and is adjusted by undistributed earnings and losses and the distributions of dividends and capital. This investment is 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 three months ended November 30, 2022, the Company recorded impairment charges totaling $29.9 million related to two narrow-body aircraft resulting from a scheduled lease expiration and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $26.3 million of maintenance and lease rentals received in advance into revenue for the two narrow-body aircraft during the three months ended November 30, 2022.
Excluding asset write-offs related to Russia, during the nine months ended November 30, 2022, the Company recorded impairment charges totaling $36.1 million primarily related to three narrow-body aircraft resulting from scheduled lease expirations and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $33.8 million of maintenance and lease rentals received in advance into revenue for the three narrow-body aircraft during the nine months ended November 30, 2022.
The Company wrote off the remaining book values of eight narrow-body and one freighter aircraft in Russia which have not been returned to us. As a result, the Company recorded impairment charges totaling $31.9 million during the nine months ended November 30, 2022 – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. During the nine months ended November 30, 2022, the Company recognized $20.3 million of maintenance and other revenue for these nine aircraft related to payments received on maintenance and general security letters of credit.
During the three months ended November 30, 2021, the Company recorded impairment charges totaling $69.1 million related to two narrow-body and one wide-body aircraft, resulting from a lessee default. The Company recognized $24.3 million of maintenance revenue for these three aircraft.
During the nine months ended November 30, 2021, the Company recorded impairment charges totaling $110.9 million, primarily related to six narrow-body and one wide-body aircraft resulting from early lease terminations, a scheduled lease expiration, and a lessee default. The Company recognized $61.4 million of maintenance revenue for these seven aircraft.
Annual Recoverability Assessment
We performed our annual recoverability assessment of all our aircraft during the third quarter of 2022. We recorded an impairment charge of $6.3 million related to one wide-body aircraft during the three and nine months ended November 30, 2022 as a result of our annual recoverability assessment – see the discussion above for further detail regarding impairment of our flight equipment.
We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, 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 aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.
11

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
The recoverability assessment is a comparison of the carrying value of each aircraft to its estimated undiscounted 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, such as the location of the aircraft and accessibility to records and technical documentation.
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 our recoverability assessments are appropriate, actual results could differ from those estimates.
Financial Instruments
Our financial instruments, other than cash, consist principally of cash equivalents, accounts receivable, accounts payable and amounts borrowed under financings. The fair value of 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 November 30, 2022 and February 28, 2022 were as follows:
 November 30, 2022February 28, 2022
 Carrying  Amount
of Liability
Fair Value
of Liability
Carrying
Amount
of Liability
Fair Value
of Liability
Credit Facilities$20,000 $20,000 $20,000 $20,000 
Unsecured Term Loan155,000 154,824 155,000 152,195 
Export Credit Agency (“ECA”) Financings  21,576 21,931 
Term Financings664,091 641,679 666,258 675,667 
Senior Notes3,700,000 3,467,718 3,700,000 3,776,997 
All our financial instruments are classified as Level 2 except for our senior notes, which are classified as Level 1.
Note 3. Flight Equipment Held for Lease, Net
The following table summarizes the activities for the Company’s flight equipment held for lease for the nine months ended November 30, 2022:
Amount
Balance at February 28, 2022
$6,313,950 
Additions668,221 
Depreciation(245,303)
Disposals and transfers to net investment in leases and held for sale(226,766)
Impairments(64,961)
Balance at November 30, 2022
$6,445,141 
Accumulated depreciation as of November 30, 2022
$2,250,527 

12

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
Write-off of Russian Aircraft
As of November 30, 2022, nine of our aircraft that were previously leased to Russian airlines remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the sanctions imposed on Russia and leasing terminations. While we will continue to pursue repossession, it is unlikely we will regain possession of any of these nine aircraft. As a result, the Company wrote off the remaining book value of these nine aircraft, resulting in impairment charges totaling $31.9 million during the nine months ended November 30, 2022. These nine aircraft have been removed from the Company’s owned fleet count. The Company is vigorously pursuing insurance claims to recover its losses relating to these aircraft and has initiated legal proceedings against its contingent and possessed insurers. The collection, timing and amounts of any insurance recoveries is uncertain.
We also had one freighter aircraft outside of Russia that we successfully repossessed during the three months ended August 31, 2022. Additionally, in response to further sanctions against Russia in the United Kingdom (“U.K.”), the Company terminated the lease of one freighter aircraft with a U.K.-based airline and successfully repossessed that aircraft during the three months ended August 31, 2022. We recognized $18.1 million of maintenance and other revenue as a result of this lease termination. During the three months ended November 30, 2022, we sold these two freighter aircraft and one wide-body aircraft, which was also leased to a Russian airline, for gains totaling $53.5 million.
We received $48.9 million of maintenance and general security letters of credit for our former Russian lessees during the nine months ended November 30, 2022 which we have recognized in maintenance and other revenue. We continue to pursue collection on the remaining letters of credit totaling $0.6 million.
Note 4. Lease Rental Revenues
Minimum future lease rentals contracted to be received under our existing operating leases of flight equipment at November 30, 2022 were as follows:
Year Ending February 28/29,
Amount(1)
2023 (Remainder of fiscal year)$149,970 
2024574,261 
2025486,026 
2026367,340 
2027306,136 
Thereafter900,082 
Total$2,783,815 
_______________
(1)Reflects impact of lessee lease rental deferrals.
At November 30, 2022 and February 28, 2022, the amounts of lease incentive liabilities recorded in maintenance payments on our consolidated balance sheets were $20.2 million and $16.5 million, respectively.

13

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
Note 5. Net Investment in Leases, Net
At November 30, 2022 and February 28, 2022, our net investment in leases consisted of eight and eleven aircraft, respectively. The components of our net investment in leases at November 30, 2022 and February 28, 2022, were as follows:
November 30, 2022February 28, 2022
Lease receivable$46,593 $52,021 
Unguaranteed residual value of flight equipment82,207 100,068 
Net investment leases128,800 152,089 
Allowance for credit losses(3,296)(1,764)
Net investment in leases, net$125,504 $150,325 
The activity in the allowance for credit losses related to our net investment in leases for the nine months ended November 30, 2022 was as follows:
Amount
Balance at February 28, 2022
$1,764 
Provision for credit losses1,543 
Write-offs(11)
Balance at November 30, 2022
$3,296 
At November 30, 2022, future lease payments on net investment in leases are as follows:
Year Ending February 28/29,Amount
2023 (Remainder of fiscal year)$2,824 
202411,343 
20259,364 
20268,233 
20278,370 
Thereafter15,454 
Total lease payments to be received55,588 
Present value of lease payments - lease receivable(46,593)
Difference between undiscounted lease payments and lease receivable$8,995 

14

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
Note 6. Concentration of Risk
The classification of regions in the tables below is based on our customers’ principal place of business.
The geographic concentration of the net book value of our fleet (flight equipment held for lease and net investment in leases, or “Net Book Value”) as of November 30, 2022 and February 28, 2022 was as follows:
 November 30, 2022February 28, 2022
RegionNumber
of
Aircraft
Net Book
Value %
Number
of
Aircraft
Net Book
Value %
Asia and Pacific64 28 %71 32 %
Europe90 30 %98 30 %
Middle East and Africa9 3 %10 4 %
North America37 20 %36 17 %
South America28 14 %25 13 %
Off-lease13 
(1)
5 %11 
(2)
4 %
Total241 100 %251 100 %
_______________
(1)Of the thirteen off-lease aircraft at November 30, 2022, we have three narrow-body aircraft and three wide-body aircraft which we are currently marketing for lease or sale.
(2)Of the eleven off-lease aircraft at February 28, 2022, we have one wide-body aircraft which we are currently marketing for lease or sale.

The following table sets forth individual countries representing at least 10% of our Net Book Value as of November 30, 2022 and February 28, 2022:
 November 30, 2022February 28, 2022
CountryNet Book
Value
Net Book
Value %
Number
of
Lessees
Net Book
Value
Net Book
Value %
Number
of
Lessees
India(1)
$ %$670,523 10%3
_______________
(1) As of November 30, 2022, India represented less than 10% of our Net Book Value.
The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows:
 Three Months Ended November 30,Nine Months Ended November 30,
Region2022202120222021
Asia and Pacific31 %27 %33 %31 %
Europe30 %31 %29 %34 %
Middle East and Africa5 %5 %5 %5 %
North America21 %15 %19 %15 %
South America13 %22 %14 %15 %
Total100 %100 %100 %100 %

15

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
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:
Three Months Ended November 30,Nine Months Ended November 30,
2022202120222021
Number of LesseesCombined % of Lease
Rental Revenue
Number of LesseesCombined % of Lease
Rental Revenue
Number of LesseesCombined % of Lease
Rental Revenue
Number of LesseesCombined % of Lease
Rental Revenue
Largest lessees by lease rental revenue425%434%427%534%
For the three months ended November 30, 2022, total revenue attributable to the United States was 29% and included $13.7 million of maintenance revenue and $47.0 million of gains on sales of aircraft. For the three months ended November 30, 2021, total revenue attributable to the United States was less than 10%.
For the nine months ended November 30, 2022, total revenue attributable to the United States was 18% and included $13.9 million of maintenance revenue and $54.8 million of gains on sales of aircraft. For the nine months ended November 30, 2021, total revenue attributable to the United States was less than 10%.
Note 7. Unconsolidated Equity Method Investment
We have a joint venture with Mizuho Leasing which has nine aircraft with a net book value of $288.6 million at November 30, 2022.
Amount
Unconsolidated equity method investment at February 28, 2022
$38,317 
Earnings of unconsolidated equity method investment, net of tax
1,780 
Unconsolidated equity method investment at November 30, 2022
$40,097 
On June 30, 2022, the Company received full repayment of the unsecured loan facility it provided to the joint venture in the amount of $1.5 million.

16

Aircastle Limited and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(Dollars in thousands, except per share amounts)
November 30, 2022
Note 8. Borrowings from Secured and Unsecured Debt Financings
The outstanding amounts of our secured and unsecured debt financings were as follows:
 
At November 30, 2022
At
February 28, 2022
Debt ObligationOutstanding
Borrowings
Number of AircraftInterest RateFinal Stated
Maturity
Outstanding
Borrowings
Secured Debt Financings:
ECA Financings(1)
$  %N/A$21,576 
Term Financings(2)
664,091 32 
2.36% to 5.69%
06/17/23 to 2/24/32666,258 
Less: Debt issuance costs and discounts(8,059) (3,795)
Total secured debt financings, net of debt issuance costs and discounts656,032 32 684,039 
Unsecured Debt Financings:
Senior 5.00% Notes due 2023500,000 5.00%04/01/23500,000 
Senior 4.40% Notes due 2023650,000 4.40%09/25/23650,000 
Senior Notes due 2024500,000 4.125%05/01/24500,000 
Senior Notes due 2025650,000 5.25%08/11/25650,000 
Senior Notes due 2026650,000 4.25%06/15/26650,000 
Senior Notes due 2028750,000 2.85%01/26/28750,000 
Unsecured Term Loans155,000 4.84%02/27/24155,000 
Revolving Credit Facilities20,000 4.78%2/28/23 to 05/24/2520,000 
   Less: Debt issuance costs and discounts(32,184)(39,159)
Total unsecured debt financings, net of debt issuance costs and discounts3,842,816 3,835,841 
Total secured and unsecured debt financings, net of debt issuance costs and discounts$4,498,848 $4,519,880 
        
(1)In May 2022, we repaid the principal and accrued interest outstanding under our remaining ECA Financing and incurred early extinguishment costs of $0.5 million.
(2)The borrowings under these financings at November 30, 2022 have a weighted-average fixed rate of interest of 4.02%.
Secured Debt Financings:
Term Financings
On November 21, 2022 (“the “Effective Date”), we entered into a full recourse $450.0 million secured financing facility (the “2022 Secured Facility”) with a syndicate of banks in relation to seventeen owned aircraft. The 2022 Secured Facility bears interest at a floating rate under the Term Secured Overnight Funding Rate (“SOFR”) (as defined in the credit agreement governing the 2022 Secured Facility) plus 2.35% per annum and matures on November 21, 2029. The 2022 Secured Facility contains, among other customary provisions, a $1.1 billion minimum net worth covenant, a 2.0:1.0 minimum interest coverage ratio covenant, and a 75% maximum loan-to-value ratio, which reduces to 70% through the term of the facility. The credit commitments under the 2022 Secured Facility will be available for borrowings for three to six months following the Effective Date. As of November 30, 2022, no amounts were borrowed under the 2022 Secured Facility.