Company: AYR
Filing Date: 2025-07-10
Form Type: 10-Q
Source: 0001628280-25-034715
Chunk: 9

Company: Aircastle LTD
Filing Date: 2025-07-10
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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 the three months ended May 31, 2025, the Company recorded transactional impairment charges totaling $5.1 million related to engine redeliveries and 1 aircraft lease termination.  The Company recognized $18.7 million of revenue related to maintenance, security deposits, and the reversal of lease incentive liabilities for these engines and aircraft during the three months ended May 31, 2025.Recoverability AssessmentWe perform a recoverability assessment of all our aircraft and other flight equipment on a quarterly basis and annually during the third quarter of each fiscal year.We perform a recoverability test when events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an aircraft or other flight equipment may not be recoverable.  For assets with indicators of impairment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted lease rentals 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.Management assumptions are 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.If our estimates or assumptions change, including those related to our customers that have entered judicial insolvency proceedings or similar-type proceedings or restructurings, 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.

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Aircastle Limited and SubsidiariesNotes to Unaudited Consolidated Financial Statements(Dollars in thousands, except per share amounts)May 31, 2025

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 three months ended May 31, 2025:Amount