Company: AYR
Filing Date: 2025-01-10
Form Type: 10-Q
Source: 0001628280-25-001098
Chunk: 36

Company: Aircastle LTD
Filing Date: 2025-01-10
Form: 10-Q
Item: Part I, Item 1
Chunk 36
---
see to be primarily responsible for maintaining the aircraft.  Maintenance reserves are generally paid by the lessee to provide for future maintenance events.  Provided a lessee performs scheduled maintenance of the aircraft, we are required to reimburse the lessee for scheduled maintenance payments.  In certain cases, we are also required to make lessor contributions, in excess of amounts a lessee may have paid, towards the costs of maintenance events performed by or on behalf of the lessee.  We may incur additional maintenance and modification 

33

costs in the future in the event we are required to remarket an aircraft or a lessee fails to meet its maintenance obligations under the lease agreement.

Actual maintenance payments to us by lessees in 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” in our Annual Report on Form 10-K for the year ended February 29, 2024.

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 November 30, 2024, the Net Book Value of its 9 aircraft was $261.5 million.

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

Foreign Currency Risk and Foreign Operations

At November 30, 2024, approximately 99% of our leases were 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 nine months ended November 30, 2024, expenses, such as personnel and office