Company: AYR
Filing Date: 2025-07-10
Form Type: 10-Q
Source: 0001628280-25-034715
Chunk: 95

Company: Aircastle LTD
Filing Date: 2025-07-10
Form: 10-Q
Item: Part I, Item 2
Chunk 95
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0 million.

Operating expenses

Total operating expenses increased $9.1 million, attributable to:

Depreciation expense increased $6.5 million, primarily attributable to an increase of $15.8 million related to 57 aircraft acquired since March 1, 2024.  This increase was partially offset by a decrease of $9.9 million related to 39 aircraft sold since March 1, 2024.

Interest, net increased $4.0 million due to a higher average cost of borrowing and a higher weighted average debt outstanding of $273.1 million.

Impairment of flight equipment.  During 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.

During the three months ended May 31, 2024, the Company recorded a transactional impairment charge of $5.2 million related to a scheduled aircraft lease expiration.  The Company recognized $18.0 million of maintenance revenue for this aircraft during the three months ended May 31, 2024.

Other expense

Total other expense increased by $3.1 million.  During the three months ended May 31, 2025, we recognized a $3.0 million loss on the early extinguishment of one of our secured term financings and the related write-off of unamortized financing costs.

Income tax provision

Our income tax provision was $12.7 million and $3.6 million, and our effective tax rate was 20.6% and 18.7% for the three months ended May 31, 2025 and 2024, respectively.  The increase in the income tax provision is primarily attributable to the mix of profits between the various jurisdictions in which we operate.

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Aircraft Valuation

For complete information on impairment of flight equipment, refer to Note 2 in the Notes to the Unaudited Consolidated Financial Statements and “Comparative Results of Operations” above.

28

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

See Note 1 – “Summary of Significant Accounting Policies – Organization and Basis of Presentation” in the Notes to the Unaudited Consolidated Financial Statements above.

RECENT UNADOPT