Company: AYR
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001628280-25-019189
Chunk: 140

Company: Aircastle LTD
Filing Date: 2025-04-23
Form: 10-K
Item: Item 7
Chunk 140
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 the future may be less than projected as a result of a number of factors, such as in the event of a lessee default.  Maintenance reserves may not cover the entire amount of actual maintenance expenses incurred and, where these expenses are not otherwise covered by the lessees, there can be no assurance that our operational cash flow and maintenance reserves will be sufficient to fund maintenance requirements, particularly as our aircraft age.  See Item 1A. “Risk Factors — Risks Related to Our Business — Risks related to our leases — If lessees are unable to fund their maintenance obligations on our aircraft, we may incur increased costs at the conclusion of the applicable lease.

Off-Balance Sheet Arrangements

We have an unconsolidated equity method investment in an aircraft leasing entity with Mizuho Leasing.  We hold a 25% equity interest in this entity, which was established to help expand our base of new business opportunities.  As of February 28, 2025, the net book value of its 8 aircraft was $244.3 million.  

The assets and liabilities of this entity are not included in our consolidated balance sheets and we record our investment under the equity method of accounting.  See Note 7 in the Notes to Consolidated Financial Statements.

42

Foreign Currency Risk and Foreign Operations

At February 28, 2025, more than 99% of our leases are payable to us in U.S. dollars.  However, we incur Euro- and Singapore dollar-denominated expenses in connection with our subsidiaries in Ireland and Singapore.  For the year ended February 28, 2025, expenses, such as payroll and office costs, denominated in currencies other than the U.S. dollar totaled $21.9 million in U.S. dollar equivalents and represented approximately 25% of total selling, general and administrative expenses.

Our international operations are a significant component of our business strategy and permit us to more effectively source new aircraft, service the aircraft we own and maintain contact with our lessees.  Therefore, it is likely that our international operations and our exposure to foreign currency risk will increase over time.  Although we have not entered into foreign currency hedges because our exposure to date has not been significant, if our foreign currency exposure increases we may enter into hedging transactions in the future to mitigate this risk.  For the years ended February 28, 2025, February 29, 2024 and February 28, 2023, we incurred