Company: AYR
Filing Date: 2025-01-10
Form Type: 10-Q
Source: 0001628280-25-001098
Chunk: 66

Company: Aircastle LTD
Filing Date: 2025-01-10
Form: 10-Q
Item: Part I, Item 8
Chunk 66
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asured at Fair Value on a Recurring Basis.(2)As of November 30, 2024, we had a $4.0 million allowance for credit losses on certain investments in debt securities that are carried at amortized cost – see Note 15.Aircraft ValuationImpairment of Flight EquipmentDuring the three months ended November 30, 2024, the Company recorded impairments totaling $8.4 million related to flight equipment that was recorded as a component of Other Assets and subject to tear-down and parts sales programs.During the nine months ended November 30, 2024, the Company recorded impairment charges totaling $19.4 million, including $11.0 million of transactional impairment charges related to a scheduled aircraft lease expiration and a lease amendment. The Company recognized $24.0 million of maintenance revenue for these aircraft during the nine months ended November 30, 2024.Annual Recoverability AssessmentWe performed our annual recoverability assessment of all our aircraft and other flight equipment during the three months ended November 30, 2024.We perform a recoverability assessment 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. 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 develops the assumptions used in the recoverability analysis 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 

11

Aircastle Limited and SubsidiariesNotes to Unaudited Consolidated Financial Statements(Dollars in thousands, except per share amounts)November 30, 2024

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