Company: AYR
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001628280-25-019189
Chunk: 45

Company: Aircastle LTD
Filing Date: 2025-04-23
Form: 10-K
Item: Item 16
Chunk 45
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 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.Use of EstimatesThe 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 the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

F - 8

Aircastle Limited and SubsidiariesNotes to Consolidated Financial Statements(Dollars in thousands, except per share amounts)

Cash and Cash EquivalentsAircastle considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.Virtually all our cash and cash equivalents are held or managed by five major financial institutions.Flight Equipment Held for Lease and DepreciationFlight 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 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