Company: AYR
Filing Date: 2025-10-09
Form Type: 10-Q
Source: 0001628280-25-044676
Chunk: 85

Company: Aircastle LTD
Filing Date: 2025-10-09
Form: 10-Q
Item: Part I, Item 8
Chunk 85
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 method of accounting.  See Note 7 in the Notes to the Unaudited Consolidated Financial Statements.

Foreign Currency Risk and Foreign Operations

At August 31, 2025, 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 six months ended August 31, 2025, expenses, such as payroll and office costs, denominated in currencies other than the U.S. dollar totaled $11.3 million in U.S. dollar equivalents and represented approximately 24% 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, our international operations and our exposure to foreign currency risk will likely increase over time.  Although we have not yet entered into foreign currency hedges, if our foreign currency exposure increases, we may enter into hedging transactions in the future to mitigate this risk.  For the six months ended August 31, 2025 and 2024, we incurred insignificant net gains and losses on foreign currency transactions.

Management’s Use of EBITDA and Adjusted EBITDA

We define EBITDA as income (loss) from continuing operations before interest expense, income taxes, and depreciation and amortization.  We use EBITDA to assess our consolidated financial and operating performance, and we believe this non-U.S. GAAP measure is helpful in identifying trends in our performance.

This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals, as well as achieving optimal financial performance.  It provides an indicator for management to determine if adjustments to current spending decisions are needed.

EBITDA provides us with a measure of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results.  Accordingly, this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure, or expenses, of the organization.  EBITDA is one of the metrics used by senior management and the Board of Directors to review the consolidated financial performance of our business.

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We define