10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________

FORM 10-Q

_______________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File number 001-32959

_______________________________________________________________

AIRCASTLE LIMITED

(Exact name of registrant as specified in its charter)

_______________________________________________________________

Bermuda	98-0444035
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
c/o Aircastle Advisor LLC
201 Tresser Boulevard, Suite 400
Stamford
Connecticut
06901
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code:     (203) 504-1020

_______________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Shares, par value $0.01 per share	N/A	NONE
Preference Shares, par value $0.01 per share	N/A	NONE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☑

The aggregate market value of the Registrant’s Common Shares based upon the closing price on the New York Stock Exchange on August 31, 2022 (the last business day of registrant’s most recently completed second fiscal quarter), beneficially owned by non-affiliates of the Registrant was $0 because the Registrant’s Common Shares were not publicly traded as of that date. For purposes of the foregoing calculation, which is required by Form 10-K, the Registrant has included in the shares owned by affiliates those shares owned by directors and executive officers and shareholders owning 10% or more of the outstanding common shares of the Registrant, and such inclusion shall not be construed as an admission that any such person is an affiliate for any purpose.

As of January 6, 2023, there were 14,048 outstanding shares of the registrant’s common shares, par value $0.01 per share.

Aircastle Limited and Subsidiaries

Form 10-Q

Table of Contents

		Page No.
	PART I. – FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets as of November 30, 2022 and February 28, 2022	3
	Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and nine months ended November 30, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the nine months ended November 30, 2022 and 2021	5
	Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended November 30, 2022 and 2021	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38
Item 4.	Controls and Procedures	38
	PART II. – OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
SIGNATURE		42

2

PART I. — FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

Aircastle Limited and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands, except share data)

	November 30, 2022		February 28, 2022
	(Unaudited)
ASSETS
Cash and cash equivalents	$	208,208	$	167,891
Restricted cash and cash equivalents	—		2,791
Accounts receivable	39,087		63,666
Flight equipment held for lease, net	6,445,141		6,313,950
Net investment in leases, net	125,504		150,325
Unconsolidated equity method investment	40,097		38,317
Other assets	328,978		356,326
Total assets	$	7,187,015	$	7,093,266
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Borrowings from secured financings, net	$	656,032	$	684,039
Borrowings from unsecured financings, net	3,842,816		3,835,841
Accounts payable, accrued expenses and other liabilities	208,273		177,424
Lease rentals received in advance	52,688		37,361
Security deposits	64,856		69,189
Maintenance payments	494,058		459,713
Total liabilities	5,318,723		5,263,567
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Preference shares, $0.01 par value, 50,000,000 shares authorized, 400 (aggregate liquidation preference of $400,000) shares issued and outstanding at November 30, 2022 and February 28, 2022	—		—
Common shares, $0.01 par value, 250,000,000 shares authorized, 14,048 shares issued and outstanding at November 30, 2022 and February 28, 2022	—		—
Additional paid-in capital	1,878,774		1,878,774
Accumulated deficit	(10,482)		(49,075)
Total shareholders’ equity	1,868,292		1,829,699
Total liabilities and shareholders’ equity	$	7,187,015	$	7,093,266

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

Aircastle Limited and Subsidiaries

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Dollars in thousands)

(Unaudited)

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
Revenues:
Lease rental revenue	$	142,336	$	156,088	$	432,988	$	425,802
Direct financing and sales-type lease revenue	2,087		2,724		6,950		8,377
Amortization of lease premiums, discounts and incentives	(3,763)		(8,867)		(14,669)		(20,026)
Maintenance revenue	56,574		33,510		103,787		81,204
Total lease revenue	197,234		183,455		529,056		495,357
Gain on sale of flight equipment	53,473		7,420		67,209		17,944
Other revenue	6,809		605		10,394		1,641
Total revenues	257,516		191,480		606,659		514,942
Operating expenses:
Depreciation	82,872		84,526		246,296		250,308
Interest, net	50,757		50,515		151,638		163,965
Selling, general and administrative	17,999		17,141		55,358		48,714
Provision for credit losses	854		958		1,543		970
Impairment of flight equipment	29,880		69,111		67,979		110,926
Maintenance and other costs	3,783		8,660		17,010		24,275
Total operating expenses	186,145		230,911		539,824		599,158
Other income (expense):
Loss on extinguishment of debt	—		—		(463)		(14,156)
Other	1,201		63		3,273		57,682
Total other income	1,201		63		2,810		43,526
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	72,572		(39,368)		69,645		(40,690)
Income tax provision	23,071		23,504		22,332		22,877
Earnings of unconsolidated equity method investment, net of tax	603		465		1,780		1,210
Net income (loss)	$	50,104	$	(62,407)	$	49,093	$	(62,357)
Preference share dividends	—		—		(10,500)		(5,658)
Net income (loss) available to common shareholders	$	50,104	$	(62,407)	$	38,593	$	(68,015)
Total comprehensive income (loss) available to common shareholders	$	50,104	$	(62,407)	$	38,593	$	(68,015)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

Aircastle Limited and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

	Nine Months Ended November 30,
	2022		2021
Cash flows from operating activities:
Net income (loss)	$	49,093	$	(62,357)
Adjustments to reconcile net income (loss) to net cash and restricted cash provided by operating activities:
Depreciation	246,296		250,308
Amortization of deferred financing costs	10,612		12,483
Amortization of lease premiums, discounts and incentives	14,669		20,026
Deferred income taxes	13,227		8,998
Collections on net investment in leases	5,444		11,727
Security deposits and maintenance payments included in earnings	(35,437)		(58,480)
Gain on sale of flight equipment	(67,209)		(17,944)
Loss on extinguishment of debt	463		14,156
Impairment of flight equipment	67,979		110,926
Provision for credit losses	1,543		970
Other	(1,778)		(1,210)
Changes in certain assets and liabilities:
Accounts receivable	11,368		4,059
Other assets	2,223		(23,305)
Accounts payable, accrued expenses and other liabilities	8,947		7,205
Lease rentals received in advance	16,091		(6,127)
Net cash and restricted cash provided by operating activities	343,531		271,435
Cash flows from investing activities:
Acquisition and improvement of flight equipment	(688,722)		(533,741)
Proceeds from sale of flight equipment	334,164		127,584
Aircraft purchase deposits and progress payments, net of deposits returned and aircraft sales deposits	7,765		(11,361)
Other	1,500		(64)
Net cash and restricted cash used in investing activities	(345,293)		(417,582)
Cash flows from financing activities:
Net proceeds from preference share issuance	—		393,347
Proceeds from secured and unsecured debt financings	139,800		—
Repayments of secured and unsecured debt financings	(163,543)		(566,885)
Debt extinguishment costs	(291)		(13,372)
Deferred financing costs	(8,674)		(5,170)
Security deposits and maintenance payments received	110,675		63,012
Security deposits and maintenance payments returned	(17,679)		(20,696)
Dividends paid	(21,000)		(5,658)
Net cash and restricted cash provided by (used in) financing activities	39,288		(155,422)
Net increase in cash and restricted cash:	37,526		(301,569)
Cash and restricted cash at beginning of period	170,682		580,598
Cash and restricted cash at end of period	$	208,208	$	279,029

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

Aircastle Limited and Subsidiaries

Consolidated Statements of Cash Flows (Continued)

(Dollars in thousands)

(Unaudited)

	Nine Months Ended November 30,
	2022		2021
Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents	$	208,208	$	276,289
Restricted cash and cash equivalents	—		2,740
Unrestricted and restricted cash and cash equivalents	$	208,208	$	279,029
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized	$	138,999	$	151,743
Cash paid for income taxes	$	4,602	$	308
Supplemental disclosures of non-cash investing activities:
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets assumed in asset acquisitions	$	4,005	$	11,570
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets settled in sale of flight equipment	$	18,672	$	14,765
Transfers from flight equipment held for lease to Net investment in leases and Other assets	$	1,695	$	22,134

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

Aircastle Limited and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Dollars in thousands, except share amounts)

(Unaudited)

	Common Shares			Preference Shares			Additional Paid-In Capital		Accumulated Deficit		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount
Balance, February 28, 2022	14,048	$	—	400	$	—	$	1,878,774	$	(49,075)	$	1,829,699
Net income	—	—		—	—		—		7,682		7,682
Balance, May 31, 2022	14,048	$	—	400	$	—	$	1,878,774	$	(41,393)	$	1,837,381
Net loss	—	—		—	—		—		(8,693)		(8,693)
Preference share dividends	—	—		—	—		—		(10,500)		(10,500)
Balance, August 31, 2022	14,048	$	—	400	$	—	$	1,878,774	$	(60,586)	$	1,818,188
Net income	—	—		—	—		—		50,104		50,104
Balance, November 30, 2022	14,048	$	—	400	$	—	$	1,878,774	$	(10,482)	$	1,868,292
	Common Shares			Preference Shares			Additional Paid-In Capital		Retained Earnings		Total Shareholders’ Equity
	Shares	Amount		Shares	Amount
Balance, February 28, 2021	14,048	$	—	—	$	—	$	1,485,777	$	245,293	$	1,731,070
Net loss	—	—		—	—		—		(9,753)		(9,753)
Balance, May 31, 2021	14,048	$	—	—	$	—	$	1,485,777	$	235,540	$	1,721,317
Net income	—	—		—	—		—		9,803		9,803
Issuance of preference shares	—	—		400	—		393,362		—		393,362
Preference share dividends	—	—		—	—		—		(5,658)		(5,658)
Balance, August 31, 2021	14,048	$	—	400	$	—	$	1,879,139	$	239,685	$	2,118,824
Net loss	—	—		—	—		—		(62,407)		(62,407)
Issuance of preference shares	—	—		—	—		(365)		—		(365)
Balance, November 30, 2021	14,048	$	—	400	$	—	$	1,878,774	$	177,278	$	2,056,052

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Note 1. Summary of Significant Accounting Policies

Organization

Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda exempted company that was incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act of 1981 of Bermuda. Aircastle’s business consists of acquiring, leasing, managing and selling commercial jet aircraft.

The Company is controlled by affiliates of Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing”). Aircastle is a holding company and conducts its business through subsidiaries that are wholly-owned, either directly or indirectly, by Aircastle.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

The accompanying consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. However, we believe that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2022.

The consolidated financial statements include the accounts of Aircastle and all its subsidiaries, including any Variable Interest Entity (“VIE”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We manage and analyze our business and report on our results of operations based on one operating segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker.

The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of November 30, 2022, through the date on which the consolidated financial statements included in this Form 10-Q were issued.

Risk and Uncertainties

In the normal course of business, Aircastle encounters several significant types of economic risk including credit, market, aviation industry and capital market risks. Credit risk is the risk of a lessee’s inability or unwillingness to make contractually required payments and to fulfill its other contractual obligations to Aircastle. Market risk reflects the change in the value of financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying financings. Aviation industry risk is the risk of a downturn in the commercial aviation industry which could adversely impact a lessee’s ability to make payments, increase the risk of early lease terminations and depress lease rates and the value of the Company’s aircraft. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of its business or to refinance existing debt facilities.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While

8

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Aircastle believes the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

Lease Revenue Recognition

We lease flight equipment under net operating leases with lease terms typically ranging from three to seven years. We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals.

In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within other assets.

Should we determine that the collectability of rental payments is no longer probable, including any deferral thereof, we will recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue.

Impairment of Flight Equipment

We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis. A recoverability assessment is also performed whenever events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. When we perform a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the aircraft exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted lease rental 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. See Note 2 in the Notes to Unaudited Consolidated Financial Statements.

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 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.

We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.

Recent Accounting Pronouncements

In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2022-06 to defer the sunset date of Reference Rate Reform Topic 848 (“ASC 848”). U.S. GAAP requires

9

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

entities to evaluate whether a contract modification, such as the replacement or change of a reference rate, results in the establishment of a new contract or continuation of an existing contract. ASC 848 allows an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform as entities transition away from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. The standard provides this temporary election through December 31, 2024, and cannot be applied to contract modifications that occur after December 31, 2024. Reference rate reform will primarily impact our lease and debt arrangements for which floating-rate lease rentals and interest expense are based on LIBOR. As of November 30, 2022, less than 1% of our fleet have floating-rate lease rentals and for the three and nine months ended November 30, 2022, 7% and 9%, respectively, of our interest expense was derived from floating-rate debt which is referenced to LIBOR. We have not adopted ASC 848 and are evaluating the election available to us under the standard.

Note 2. Fair Value Measurements

Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs.

The following tables set forth our financial assets as of November 30, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

			Fair Value Measurements at November 30, 2022 Using Fair Value Hierarchy
	Fair Value as of November 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Valuation Technique
Assets:
Cash and cash equivalents	$	208,208	$	208,208	$	—	$	—	Market
Total	$	208,208	$	208,208	$	—	$	—

			Fair Value Measurements at February 28, 2022 Using Fair Value Hierarchy
	Fair Value as of February 28, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Valuation Technique
Assets:
Cash and cash equivalents	$	167,891	$	167,891	$	—	$	—	Market
Restricted cash and cash equivalents	2,791		2,791		—		—		Market
Total	$	170,682	$	170,682	$	—	$	—

Our cash and cash equivalents consist largely of money market securities that are highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

We had no transfers into or out of Level 3 during the three and nine months ended November 30, 2022.

We measure the fair value of certain assets and liabilities on a non-recurring basis when U.S. GAAP requires the application of fair value, including events or changes in circumstances that indicate the carrying amounts of these assets may not be recoverable. Assets subject to these measurements include our aircraft and investment in unconsolidated joint venture. We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value

10

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

measurements for aircraft in impairment tests are based on the average of the market approach that uses Level 2 inputs, which include third party appraisal data and an income approach that uses Level 3 inputs, which include the Company’s assumptions and appraisal data as to future cash proceeds from leasing and selling aircraft discounted using the Company’s weighted average cost of capital.

We account for our investment in unconsolidated joint venture under the equity method of accounting. Our investment is recorded at cost and is adjusted by undistributed earnings and losses and the distributions of dividends and capital. This investment is reviewed for impairment whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary.

Aircraft Valuation

Impairment of Flight Equipment

During the three months ended November 30, 2022, the Company recorded impairment charges totaling $29.9 million related to two narrow-body aircraft resulting from a scheduled lease expiration and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $26.3 million of maintenance and lease rentals received in advance into revenue for the two narrow-body aircraft during the three months ended November 30, 2022.

Excluding asset write-offs related to Russia, during the nine months ended November 30, 2022, the Company recorded impairment charges totaling $36.1 million primarily related to three narrow-body aircraft resulting from scheduled lease expirations and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $33.8 million of maintenance and lease rentals received in advance into revenue for the three narrow-body aircraft during the nine months ended November 30, 2022.

The Company wrote off the remaining book values of eight narrow-body and one freighter aircraft in Russia which have not been returned to us. As a result, the Company recorded impairment charges totaling $31.9 million during the nine months ended November 30, 2022 – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. During the nine months ended November 30, 2022, the Company recognized $20.3 million of maintenance and other revenue for these nine aircraft related to payments received on maintenance and general security letters of credit.

During the three months ended November 30, 2021, the Company recorded impairment charges totaling $69.1 million related to two narrow-body and one wide-body aircraft, resulting from a lessee default. The Company recognized $24.3 million of maintenance revenue for these three aircraft.

During the nine months ended November 30, 2021, the Company recorded impairment charges totaling $110.9 million, primarily related to six narrow-body and one wide-body aircraft resulting from early lease terminations, a scheduled lease expiration, and a lessee default. The Company recognized $61.4 million of maintenance revenue for these seven aircraft.

Annual Recoverability Assessment

We performed our annual recoverability assessment of all our aircraft during the third quarter of 2022. We recorded an impairment charge of $6.3 million related to one wide-body aircraft during the three and nine months ended November 30, 2022 as a result of our annual recoverability assessment – see the discussion above for further detail regarding impairment of our flight equipment.

We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.

11

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

The recoverability assessment is a comparison of the carrying value of each aircraft to its estimated undiscounted future cash flows. We develop the assumptions used in the recoverability assessment, including those relating to current and future demand for each aircraft type, based on management’s experience in the aircraft leasing industry, as well as information received from third-party sources. Estimates of the undiscounted cash flows for each aircraft type are impacted by changes in contracted and future expected lease rates, residual values, expected scrap values, economic conditions 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, 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.

Financial Instruments

Our financial instruments, other than cash, consist principally of cash equivalents, accounts receivable, accounts payable and amounts borrowed under financings. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates the carrying value of these financial instruments because of their short-term nature.

The fair value of our senior notes is estimated using quoted market prices. The fair values of all our other financings are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements.

The carrying amounts and fair values of our financial instruments at November 30, 2022 and February 28, 2022 were as follows:

	November 30, 2022				February 28, 2022
	Carrying  Amount of Liability		Fair Value of Liability		Carrying Amount of Liability		Fair Value of Liability
Credit Facilities	$	20,000	$	20,000	$	20,000	$	20,000
Unsecured Term Loan	155,000		154,824		155,000		152,195
Export Credit Agency (“ECA”) Financings	—		—		21,576		21,931
Term Financings	664,091		641,679		666,258		675,667
Senior Notes	3,700,000		3,467,718		3,700,000		3,776,997

All our financial instruments are classified as Level 2 except for our senior notes, which are classified as Level 1.

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 nine months ended November 30, 2022:

	Amount
Balance at February 28, 2022	$	6,313,950
Additions	668,221
Depreciation	(245,303)
Disposals and transfers to net investment in leases and held for sale	(226,766)
Impairments	(64,961)
Balance at November 30, 2022	$	6,445,141
Accumulated depreciation as of November 30, 2022	$	2,250,527

12

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Write-off of Russian Aircraft

As of November 30, 2022, nine of our aircraft that were previously leased to Russian airlines remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the sanctions imposed on Russia and leasing terminations. While we will continue to pursue repossession, it is unlikely we will regain possession of any of these nine aircraft. As a result, the Company wrote off the remaining book value of these nine aircraft, resulting in impairment charges totaling $31.9 million during the nine months ended November 30, 2022. These nine aircraft have been removed from the Company’s owned fleet count. The Company is vigorously pursuing insurance claims to recover its losses relating to these aircraft and has initiated legal proceedings against its contingent and possessed insurers. The collection, timing and amounts of any insurance recoveries is uncertain.

We also had one freighter aircraft outside of Russia that we successfully repossessed during the three months ended August 31, 2022. Additionally, in response to further sanctions against Russia in the United Kingdom (“U.K.”), the Company terminated the lease of one freighter aircraft with a U.K.-based airline and successfully repossessed that aircraft during the three months ended August 31, 2022. We recognized $18.1 million of maintenance and other revenue as a result of this lease termination. During the three months ended November 30, 2022, we sold these two freighter aircraft and one wide-body aircraft, which was also leased to a Russian airline, for gains totaling $53.5 million.

We received $48.9 million of maintenance and general security letters of credit for our former Russian lessees during the nine months ended November 30, 2022 which we have recognized in maintenance and other revenue. We continue to pursue collection on the remaining letters of credit totaling $0.6 million.

Note 4. Lease Rental Revenues

Minimum future lease rentals contracted to be received under our existing operating leases of flight equipment at November 30, 2022 were as follows:

Year Ending February 28/29,	Amount(1)
2023 (Remainder of fiscal year)	$	149,970
2024	574,261
2025	486,026
2026	367,340
2027	306,136
Thereafter	900,082
Total	$	2,783,815

_______________

(1)Reflects impact of lessee lease rental deferrals.

At November 30, 2022 and February 28, 2022, the amounts of lease incentive liabilities recorded in maintenance payments on our consolidated balance sheets were $20.2 million and $16.5 million, respectively.

13

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Note 5. Net Investment in Leases, Net

At November 30, 2022 and February 28, 2022, our net investment in leases consisted of eight and eleven aircraft, respectively. The components of our net investment in leases at November 30, 2022 and February 28, 2022, were as follows:

	November 30, 2022		February 28, 2022
Lease receivable	$	46,593	$	52,021
Unguaranteed residual value of flight equipment	82,207		100,068
Net investment leases	128,800		152,089
Allowance for credit losses	(3,296)		(1,764)
Net investment in leases, net	$	125,504	$	150,325

The activity in the allowance for credit losses related to our net investment in leases for the nine months ended November 30, 2022 was as follows:

	Amount
Balance at February 28, 2022	$	1,764
Provision for credit losses	1,543
Write-offs	(11)
Balance at November 30, 2022	$	3,296

At November 30, 2022, future lease payments on net investment in leases are as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	2,824
2024	11,343
2025	9,364
2026	8,233
2027	8,370
Thereafter	15,454
Total lease payments to be received	55,588
Present value of lease payments - lease receivable	(46,593)
Difference between undiscounted lease payments and lease receivable	$	8,995

14

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Note 6. Concentration of Risk

The classification of regions in the tables below is based on our customers’ principal place of business.

The geographic concentration of the net book value of our fleet (flight equipment held for lease and net investment in leases, or “Net Book Value”) as of November 30, 2022 and February 28, 2022 was as follows:

	November 30, 2022				February 28, 2022
Region	Number of Aircraft		Net Book Value %		Number of Aircraft		Net Book Value %
Asia and Pacific	64		28	%	71		32	%
Europe	90		30	%	98		30	%
Middle East and Africa	9		3	%	10		4	%
North America	37		20	%	36		17	%
South America	28		14	%	25		13	%
Off-lease	13	(1)	5	%	11	(2)	4	%
Total	241		100	%	251		100	%

_______________

(1)Of the thirteen off-lease aircraft at November 30, 2022, we have three narrow-body aircraft and three wide-body aircraft which we are currently marketing for lease or sale.

(2)Of the eleven off-lease aircraft at February 28, 2022, we have one wide-body aircraft which we are currently marketing for lease or sale.

The following table sets forth individual countries representing at least 10% of our Net Book Value as of November 30, 2022 and February 28, 2022:

	November 30, 2022				February 28, 2022
Country	Net Book Value		Net Book Value %	Number of Lessees	Net Book Value		Net Book Value %	Number of Lessees
India(1)	$	—	—%	—	$	670,523	10%	3

_______________

(1) As of November 30, 2022, India represented less than 10% of our Net Book Value.

The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows:

	Three Months Ended November 30,				Nine Months Ended November 30,
Region	2022		2021		2022		2021
Asia and Pacific	31	%	27	%	33	%	31	%
Europe	30	%	31	%	29	%	34	%
Middle East and Africa	5	%	5	%	5	%	5	%
North America	21	%	15	%	19	%	15	%
South America	13	%	22	%	14	%	15	%
Total	100	%	100	%	100	%	100	%

15

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

The following table shows the number of lessees with lease rental revenue of at least 5% of total lease rental revenue and their combined total percentage of lease rental revenue for the periods indicated:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue
Largest lessees by lease rental revenue	4	25%	4	34%	4	27%	5	34%

For the three months ended November 30, 2022, total revenue attributable to the United States was 29% and included $13.7 million of maintenance revenue and $47.0 million of gains on sales of aircraft. For the three months ended November 30, 2021, total revenue attributable to the United States was less than 10%.

For the nine months ended November 30, 2022, total revenue attributable to the United States was 18% and included $13.9 million of maintenance revenue and $54.8 million of gains on sales of aircraft. For the nine months ended November 30, 2021, total revenue attributable to the United States was less than 10%.

Note 7. Unconsolidated Equity Method Investment

We have a joint venture with Mizuho Leasing which has nine aircraft with a net book value of $288.6 million at November 30, 2022.

	Amount
Unconsolidated equity method investment at February 28, 2022	$	38,317
Earnings of unconsolidated equity method investment, net of tax	1,780
Unconsolidated equity method investment at November 30, 2022	$	40,097

On June 30, 2022, the Company received full repayment of the unsecured loan facility it provided to the joint venture in the amount of $1.5 million.

16

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Note 8. Borrowings from Secured and Unsecured Debt Financings

The outstanding amounts of our secured and unsecured debt financings were as follows:

	At November 30, 2022					At February 28, 2022
Debt Obligation	Outstanding Borrowings		Number of Aircraft	Interest Rate	Final Stated Maturity	Outstanding Borrowings
Secured Debt Financings:
ECA Financings(1)	$	—	—	—%	N/A	$	21,576
Term Financings(2)	664,091		32	2.36% to 5.69%	06/17/23 to 2/24/32	666,258
Less: Debt issuance costs and discounts	(8,059)		—			(3,795)
Total secured debt financings, net of debt issuance costs and discounts	656,032		32			684,039
Unsecured Debt Financings:
Senior 5.00% Notes due 2023	500,000			5.00%	04/01/23	500,000
Senior 4.40% Notes due 2023	650,000			4.40%	09/25/23	650,000
Senior Notes due 2024	500,000			4.125%	05/01/24	500,000
Senior Notes due 2025	650,000			5.25%	08/11/25	650,000
Senior Notes due 2026	650,000			4.25%	06/15/26	650,000
Senior Notes due 2028	750,000			2.85%	01/26/28	750,000
Unsecured Term Loans	155,000			4.84%	02/27/24	155,000
Revolving Credit Facilities	20,000			4.78%	2/28/23 to 05/24/25	20,000
Less: Debt issuance costs and discounts	(32,184)					(39,159)
Total unsecured debt financings, net of debt issuance costs and discounts	3,842,816					3,835,841
Total secured and unsecured debt financings, net of debt issuance costs and discounts	$	4,498,848				$	4,519,880

(1)In May 2022, we repaid the principal and accrued interest outstanding under our remaining ECA Financing and incurred early extinguishment costs of $0.5 million.

(2)The borrowings under these financings at November 30, 2022 have a weighted-average fixed rate of interest of 4.02%.

Secured Debt Financings:

Term Financings

On November 21, 2022 (“the “Effective Date”), we entered into a full recourse $450.0 million secured financing facility (the “2022 Secured Facility”) with a syndicate of banks in relation to seventeen owned aircraft. The 2022 Secured Facility bears interest at a floating rate under the Term Secured Overnight Funding Rate (“SOFR”) (as defined in the credit agreement governing the 2022 Secured Facility) plus 2.35% per annum and matures on November 21, 2029. The 2022 Secured Facility contains, among other customary provisions, a $1.1 billion minimum net worth covenant, a 2.0:1.0 minimum interest coverage ratio covenant, and a 75% maximum loan-to-value ratio, which reduces to 70% through the term of the facility. The credit commitments under the 2022 Secured Facility will be available for borrowings for three to six months following the Effective Date. As of November 30, 2022, no amounts were borrowed under the 2022 Secured Facility.

17

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Unsecured Debt Financings:

Revolving Credit Facilities

On May 24, 2022, we entered into an amendment for one of our unsecured revolving credit facilities that expanded the size and extended the term of the facility. As a result, the existing $230.0 million commitment was expanded to $280.0 million, with $35.0 million and $245.0 million of the commitment allocated to Tranche B and Tranche C, respectively. Tranche B will mature on February 28, 2023 and Tranche C will mature on May 24, 2025. Tranche A matured on its stated maturity date of December 27, 2021.

On June 27, 2022, a $100.0 million commitment under one of our unsecured revolving credit facilities, with a total commitment of $1.0 billion, matured on its stated maturity date. On September 8, 2022, we entered into an amendment that expanded the size of the facility from $900.0 million to $1.0 billion and replaced LIBOR with Term SOFR as the benchmark interest rate. The facility bears interest at Adjusted Term SOFR (as defined in the amendment to the credit agreement) plus 1.625% per annum and matures on April 26, 2025.

On July 30, 2022, a $50.0 million commitment under our revolving credit facility with Mizuho Bank Ltd., a related party, matured on its stated maturity date.

As of November 30, 2022, we had $20.0 million outstanding under our revolving credit facilities and had $1.4 billion available for borrowing.

As of November 30, 2022, we were in compliance with all applicable covenants in our financings.

Note 9. Shareholders' Equity

On March 15, 2022, the Company paid a quarterly dividend in the amount of $10.5 million for its Preference Shares, which was approved by the Company’s Board of Directors on January 6, 2022, and accrued as of February 28, 2022.

On September 15, 2022, the Company paid a quarterly dividend in the amount of $10.5 million for its Preference Shares, which was approved by the Company’s Board of Directors on July 6, 2022, and accrued as of August 31, 2022.

Note 10. Related Party Transactions

The Company incurred fees from Marubeni as part of its intra-company service agreement totaling $1.3 million and $1.0 million during the three months ended November 30, 2022 and 2021, respectively, and $3.9 million and $2.9 million during the nine months ended November 30, 2022 and 2021, respectively, whereby Marubeni provides certain management and administrative services to the Company. In addition, the Company purchased parts under a parts management services and supply agreement with an affiliate of Marubeni totaling $0.4 million and $2.7 million during the three months ended November 30, 2022 and 2021, respectively, and $3.7 million and $4.6 million during the nine months ended November 30, 2022 and 2021, respectively.

Note 11. Income Taxes

Income taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned. The Company received assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035. Consequently, the provision for income taxes relates to income earned by certain subsidiaries of the Company which are located in, or earn income in, jurisdictions that impose income taxes, primarily the United States and Ireland.

18

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

The sources of income (loss) from continuing operations before income taxes and earnings of our unconsolidated equity method investment for the three and nine months ended November 30, 2022 and 2021 were as follows:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
U.S. operations	$	5,868	$	6,218	$	15,994	$	14,408
Non-U.S. operations	66,704		(45,586)		53,651		(55,098)
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	$	72,572	$	(39,368)	$	69,645	$	(40,690)

Our aircraft-owning subsidiaries generally earn income from sources outside the U.S. and typically are not subject to U.S. federal, state or local income taxes. The aircraft owning subsidiaries resident in the U.S. and Ireland are subject to tax in those respective jurisdictions.

We have a U.S.-based subsidiary which provides management services to our subsidiaries and is subject to U.S. federal, state and local income taxes. We also have Ireland and Singapore based subsidiaries which provide management services to our non-U.S. subsidiaries and are subject to tax in those respective jurisdictions.

The Company’s effective tax rate (“ETR”) for the three months ended November 30, 2022 and 2021 was 31.8% and (59.7)%, respectively, and for the nine months ended November 30, 2022 and 2021 was 32.1% and (56.2)%, respectively. The movement in the ETR is primarily caused by changes in the mix of the Company’s pre-tax income/(loss) in its taxable and non-tax jurisdictions. The nine months ended November 30, 2022 included gains on sales of aircraft that were recorded in a low tax jurisdiction. The nine months ended November 30, 2021 included certain net non-cash impairment charges and income from the sale of unsecured claims filed by the Company against LATAM Airlines Group S.A. and certain of its subsidiaries (“LATAM”) in respect of LATAM’s Chapter 11 filing (the “LATAM Bankruptcy”), which were recorded in a low tax jurisdiction.

Note 12. Interest, Net

The following table shows the components of interest, net:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
Interest on borrowings and other liabilities	$	49,436	$	47,152	$	145,069	$	153,287
Amortization of deferred financing fees and debt discount	3,517		4,099		10,612		12,483
Interest expense	52,953		51,251		155,681		165,770
Less: Interest income	(1,394)		(448)		(2,401)		(1,160)
Less: Capitalized interest	(802)		(288)		(1,642)		(645)
Interest, net	$	50,757	$	50,515	$	151,638	$	163,965

19

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Note 13. Commitments and Contingencies

Office rent expense was $0.5 million and $0.4 million, and $1.4 million and $1.2 million, for the three and nine months ended November 30, 2022 and 2021, respectively.

As of November 30, 2022, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in Stamford, Connecticut; Dublin, Ireland; and Singapore for future minimum lease payments as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	485
2024	2,243
2025	2,882
2026	2,731
2027	2,671
Thereafter	19,543
Total	$	30,555

At November 30, 2022, we had commitments to acquire 23 aircraft for $857.8 million.

At November 30, 2022, commitments, including $46.2 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft, net of amounts already paid, are as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	483,357
2024	179,037
2025	195,380
2026	—
2027	—
Thereafter	—
Total	$	857,774

Note 14. Other Assets

Other assets consisted of the following as of November 30, 2022 and February 28, 2022:

	November 30, 2022		February 28, 2022
Deferred income tax asset	$	380	$	570
Lease incentives and lease premiums, net of amortization of $84,729 and $81,553, respectively	57,476		53,513
Flight equipment held for sale	33,588		77,636
Aircraft purchase deposits and Embraer E-2 progress payments	63,123		56,157
Right-of-use asset(1)	16,959		7,176
Deferred rent receivable	47,079		55,478
Other assets	110,373		105,796
Total other assets	$	328,978	$	356,326

______________

(1)Net of lease incentives and tenant allowances.

20

Aircastle Limited and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

November 30, 2022

Note 15. Accounts Payable, Accrued Expenses and Other Liabilities

Accounts payable, accrued expenses and other liabilities consisted of the following as of November 30, 2022 and February 28, 2022:

	November 30, 2022		February 28, 2022
Accounts payable, accrued expenses and other liabilities	$	59,491	$	58,882
Deferred income tax liability	79,161		66,123
Accrued interest payable	46,328		42,013
Lease liability	19,597		9,846
Lease discounts, net of amortization of $45,237 and $45,546, respectively	3,696		560
Total accounts payable, accrued expenses and other liabilities	$	208,273	$	177,424

21

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks, uncertainties and assumptions. You should read the following discussion in conjunction with our historical consolidated financial statements and the notes thereto appearing elsewhere in this report. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those described under “Risk Factors” and included in our Annual Report on Form 10-K for the year ended February 28, 2022. Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and, unless otherwise indicated, the other financial information contained in this report has also been prepared in accordance with U.S. GAAP. Unless otherwise indicated, all references to “dollars” and “$” in this report are to, and all monetary amounts in this report are presented in, U.S. dollars.

All statements included or incorporated by reference in this Quarterly Report on Form 10-Q (this “report”), other than characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not necessarily limited to, statements relating to our ability to acquire, sell, lease or finance aircraft, raise capital, pay dividends, and increase revenues, earnings, EBITDA and Adjusted EBITDA and the global aviation industry and aircraft leasing sector. Words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “may,” “will,” “would,” “could,” “should,” “seeks,” “estimates” and variations on these words and similar expressions are intended to identify such forward-looking statements. These statements are based on our historical performance and that of our subsidiaries and on our current plans, estimates and expectations and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements; Aircastle can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any such forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this report. These risks or uncertainties include, but are not limited to, those described from time to time in Aircastle’s filings with the Securities and Exchange Commission (the “SEC”) and previously disclosed under “Risk Factors” in Part I - Item 1A of Aircastle’s Annual Report on Form 10-K for the year ended February 28, 2022. In addition, new risks and uncertainties emerge from time to time, and it is not possible for Aircastle to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this report. Aircastle expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.

WEBSITE AND ACCESS TO THE COMPANY’S REPORTS

Statements and information concerning our status as a Passive Foreign Investment Company (“PFIC”) for U.S. taxpayers are available free of charge through our website at www.aircastle.com under “Investors — Tax Information (PFIC).”

The information on the Company’s Internet website is not part of, nor incorporated by reference, into this report, or any other report we file with, or furnish to, the SEC.

22

OVERVIEW

Aircastle acquires, leases, and sells commercial jet aircraft to airlines throughout the world. Our aircraft are managed by an experienced team based in the United States, Ireland and Singapore. Our aircraft are subject to net leases whereby the lessee is generally responsible for maintaining the aircraft and paying operational, maintenance and insurance costs. However, in many cases we are obligated to pay a specified portion of maintenance or modification costs. During the nine months ended November 30, 2022, we purchased fifteen aircraft and sold seventeen aircraft and other flight equipment. As of November 30, 2022, we owned and managed on behalf of our joint venture 250 aircraft leased to 76 lessees located in 46 countries. As of November 30, 2022, the Net Book Value of our fleet was $6.6 billion. The weighted average age of our fleet was 10.0 years and the weighted average remaining lease term was 5.1 years. As of November 30, 2022, we have commitments to acquire 23 aircraft for $857.8 million, which includes estimated amounts for pre-delivery deposits, contractual price escalations and other adjustments.

Our total revenues, net income and Adjusted EBITDA were $257.5 million and $606.7 million, $50.1 million and $49.1 million, and $240.4 million and $552.5 million, respectively, for the three and nine months ended November 30, 2022. Cash flow provided by operating activities was $343.5 million for the nine months ended November 30, 2022. Our business and financial results, customers, and the aviation industry has and will continue to be impacted by the COVID-19 pandemic and the Russian invasion of Ukraine. We believe our platform and personnel position us to effectively manage through these crises and will enable us to take advantage of new investment opportunities when they arise.

While the industry continues to recover from the impact of COVID-19, according to the International Air Transit Association (“IATA”), as of November 30, 2022, air travel was still down to approximately 75% compared to pre-pandemic levels. We continue to believe long-term demand for air travel will gradually return to historical trends over time.

Historically, growth in commercial air traffic has been correlated with world economic activity. Prior to the COVID-19 pandemic, commercial air traffic growth expanded at a rate of approximately 1 to 2 times that of global GDP growth. This expansion of air travel has driven growth in the world aircraft fleet; and there are approximately 25,000 commercial mainline passenger and freighter aircraft in the world fleet today. Aircraft leasing companies own approximately 50% of the world’s commercial jet aircraft. Under normal circumstances, we would expect the global fleet to continue expanding at a two to three percent average annual rate.

We believe that our long-standing business strategy of maintaining conservative leverage, limiting long-term financial commitments, and focusing our portfolio on more liquid narrow-body aircraft will enable us to manage through recent crises, such as the COVID-19 pandemic and the Russian invasion of Ukraine. Our portfolio of primarily mid-life, narrow-body aircraft should remain attractive relative to new technology aircraft due to their lower capital costs in an environment of tight airline margins.

We believe that we have sufficient liquidity to meet our contractual obligations over the next twelve months and as of January 6, 2023, total liquidity of $2.3 billion includes $1.7 billion of undrawn facilities, $0.4 billion of projected adjusted operating cash flows, $0.1 billion of contracted asset sales and $0.1 billion of unrestricted cash through January 1, 2024.

Update on Russian Invasion of Ukraine

As of November 30, 2022, nine of our aircraft that were previously leased to Russian airlines remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the sanctions imposed on Russia and leasing terminations. While we will continue to pursue repossession, it is unlikely we will regain possession of any of these nine aircraft. As a result, the Company wrote off the remaining book value of these nine aircraft, resulting in impairment charges totaling $31.9 million during the nine months ended November 30, 2022. These nine aircraft have been removed from the Company’s owned fleet count. The Company is vigorously pursuing insurance claims to recover its losses relating to these aircraft and has initiated legal proceedings against its contingent and possessed insurers. The collection, timing and amounts of any insurance recoveries is uncertain.

We have also successfully recovered four aircraft that were previously leased to Russian or Russian-affiliated airlines as of November 30, 2022, comprised of one narrow-body, one wide-body, and two freighter aircraft. During the

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three months ended November 30, 2022, we sold the two freighter aircraft and one wide-body aircraft that we recovered for gains totaling $53.5 million.

We received $48.9 million of maintenance and general security letters of credit for our former Russian lessees during the nine months ended November 30, 2022, which we have recognized in maintenance and other revenue. We continue to pursue collection on the remaining letters of credit totaling $0.6 million.

Fiscal Year 2022 Lease Expirations and Lease Placements

As of January 6, 2023, we had six off-lease aircraft and three aircraft with leases expiring in fiscal year 2022, which combined account for less than 3% of our Net Book Value at November 30, 2022, still to be placed or sold.

Taking into account lease and sale commitments, we currently have the following number of aircraft with lease expirations scheduled in the fiscal years 2023-2026, representing the percentage of our Net Book Value at November 30, 2022, specified below:

•2023: 20 aircraft, representing 6%;

•2024: 43 aircraft, representing 15%;

•2025: 30 aircraft, representing 12%; and

•2026: 22 aircraft, representing 8%.

Acquisitions and Sales

During the nine months ended November 30, 2022, we acquired fifteen aircraft for $617.7 million. As of November 30, 2022, we had commitments to acquire 23 aircraft for $857.8 million, with delivery through the second quarter of 2025, which includes estimated amounts for pre-delivery deposits, contractual price escalations and other adjustments. As of January 6, 2023, we have acquired five additional aircraft and have commitments to acquire eighteen aircraft for $608.7 million.

During the nine months ended November 30, 2022, we sold seventeen aircraft and other flight equipment for net proceeds of $334.2 million and recognized a net gain on sale of $67.2 million. As of January 6, 2023, we have sold two additional aircraft.

Finance

We operate in a capital-intensive industry and have a demonstrated track record of raising substantial amounts of capital from debt and equity investors. Since our inception in late 2004, we have raised $2.1 billion in equity capital from private and public investors. We also raised $19.1 billion in debt capital from a variety of sources including export credit agencies, commercial banks, the aircraft securitization markets and the unsecured bond market. The diversity and global nature of our financing sources demonstrates our ability to adapt to changing market conditions and seize new growth opportunities.

We intend to fund new investments through cash on hand, funds generated from operations, maintenance payments received from lessees, secured and unsecured borrowings for aircraft, draws on our revolving credit facilities and proceeds from any future aircraft sales. We may repay all or a portion of such borrowings from time to time with the net proceeds from subsequent long-term debt financings, additional equity offerings or cash generated from operations and asset sales. Therefore, our ability to execute our business strategy, particularly the acquisition of additional commercial jet aircraft or other aviation assets, depends to a significant degree on our ability to obtain additional debt and equity capital on terms we deem attractive.

See “Liquidity and Capital Resources — Secured Debt Financings” and “Liquidity and Capital Resources — Unsecured Debt Financings” below.

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AIRCASTLE AIRCRAFT INFORMATION

The following table sets forth certain information with respect to the aircraft owned by us as of November 30, 2022 and 2021 (dollars in millions):

Owned Aircraft	As of November 30, 2022(1)			As of November 30, 2021
Net Book Value of Flight Equipment	$	6,571		$	6,734
Net Book Value of Unencumbered Flight Equipment	$	5,480		$	5,619
Number of Aircraft(1)	241			255
Number of Unencumbered Aircraft	209			223
Number of Lessees	76			79
Number of Countries	46			43
Weighted Average Age (Years)(2)	10.0			10.6
Weighted Average Remaining Lease Term (Years)(2)	5.1			4.8
Weighted Average Fleet Utilization during the three months ended November 30, 2022 and 2021(3)	94.4		%	94.0		%
Weighted Average Fleet Utilization during the nine months ended November 30, 2022 and 2021(3)	94.6		%	93.7		%
Portfolio Yield for the three months ended November 30, 2022 and 2021(4)	9.0		%	9.7		%
Portfolio Yield for the nine months ended November 30, 2022 and 2021(4)	9.1		%	8.9		%
Managed Aircraft on behalf of Joint Venture
Net Book Value of Flight Equipment	$	289		$	302
Number of Aircraft	9			9

(1)Excludes nine aircraft that remain in Russia with zero Net Book Value – see Note 3 in the Notes to Unaudited Consolidated Financial Statements.

(2)Weighted by Net Book Value.

(3)Aircraft on-lease days as a percent of total days in period weighted by Net Book Value.

(4)Lease rental revenue, interest income and cash collections on our net investment in leases for the period as a percent of the average Net Book Value for the period; quarterly information is annualized.

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PORTFOLIO DIVERSIFICATION

	Owned Aircraft as of November 30, 2022				Owned Aircraft as of November 30, 2021
	Number of Aircraft		% of Net Book Value		Number of Aircraft		% of Net Book Value
Aircraft Type
Passenger:
Narrow-body - new technology(1)	37		25	%	23		15	%
Narrow-body - current technology	181		59	%	206		65	%
Wide-body - current technology	20		14	%	22		16	%
Total Passenger	238		98	%	251		96	%
Freighter - current technology	3		2	%	4		4	%
Total	241		100	%	255		100	%
Manufacturer
Airbus	158		66	%	168		64	%
Boeing	69		28	%	79		33	%
Embraer	14		6	%	8		3	%
Total	241		100	%	255		100	%
Regional Diversification
Asia and Pacific	64		28	%	74		32	%
Europe	90		30	%	99		31	%
Middle East and Africa	9		3	%	10		4	%
North America	37		20	%	35		16	%
South America	28		14	%	24		12	%
Off-lease	13	(2)	5	%	13	(3)	5	%
Total	241		100	%	255		100	%

(1)    Includes Airbus A320-200neo and A321-200neo, Boeing 737-MAX8 and Embraer E2 aircraft.

(2)    Of the thirteen off-lease aircraft at November 30, 2022, we have three narrow-body aircraft and three wide-body aircraft which we are currently marketing for lease or sale.

(3)    All thirteen off-lease aircraft at November 30, 2021 have been placed for lease or sold.

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The top ten customers for our owned aircraft at November 30, 2022 are as follows:

Customer	Country	Percent of Net Book Value	Number of Aircraft
IndiGo	India	7.3%	11
LATAM	Chile	7.2%	13
Viva Aerobus	Mexico	4.3%	7
KLM	Netherlands	4.0%	8
American Airlines	United States	3.8%	9
Air Canada	Canada	3.4%	5
Lion Air(1)	Indonesia	3.4%	8
Iberia	Spain	3.3%	14
Frontier Airlines	United States	2.9%	4
Aerolineas Argentinas	Argentina	2.8%	5
Total top ten customers		42.4%	84
All other customers		57.6%	157
Total all customers		100.0%	241

(1) Includes two aircraft on lease with an affiliated airline.

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RESULTS OF OPERATIONS

Comparison of the three months ended November 30, 2022 to the three months ended November 30, 2021:

	Three Months Ended November 30,
	2022		2021
	(Dollars in thousands)
Revenues:
Lease rental revenue	$	142,336	$	156,088
Direct financing and sales-type lease revenue	2,087		2,724
Amortization of lease premiums, discounts and incentives	(3,763)		(8,867)
Maintenance revenue	56,574		33,510
Total lease revenue	197,234		183,455
Gain on sale of flight equipment	53,473		7,420
Other revenue	6,809		605
Total revenues	257,516		191,480
Operating expenses:
Depreciation	82,872		84,526
Interest, net	50,757		50,515
Selling, general and administrative	17,999		17,141
Provision for credit losses	854		958
Impairment of flight equipment	29,880		69,111
Maintenance and other costs	3,783		8,660
Total operating expenses	186,145		230,911
Other income:
Other	1,201		63
Total other income	1,201		63
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	72,572		(39,368)
Income tax provision	23,071		23,504
Earnings of unconsolidated equity method investment, net of tax	603		465
Net income (loss)	$	50,104	$	(62,407)

Revenues

Total revenues increased $66.0 million, attributable to:

Lease rental revenue decreased $13.8 million as a result of:

•a $10.3 million decrease related to the termination of leasing activities with Russian or Russian-affiliated airlines as a result of sanctions;

•a $7.6 million decrease in revenue related to the timing of payments for customers for which lease rental revenue was recognized using a cash basis of accounting rather than an accrual method – see Note 1 in the Notes to Unaudited Consolidated Financial Statements for our lease revenue recognition policy;

•a $6.2 million decrease related to the sale of fourteen aircraft since September 1, 2021; and

•a $5.9 million decrease due to lease extensions, amendments, transitions and other changes.

These decreases were partially offset by a $16.2 million increase related to 25 aircraft purchased since September 1, 2021.

Direct financing and sales-type lease revenue decreased $0.6 million, primarily related to the sales of eight aircraft since September 1, 2021, partially offset by the reclassification of two aircraft to sales-type leases.

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Amortization of lease premiums, discounts and lease incentives:

	Three Months Ended November 30,
	2022		2021
	(Dollars in thousands)
Amortization of lease premiums	$	(2,949)	$	(5,724)
Amortization of lease discounts	161		213
Amortization of lease incentives	(975)		(3,356)
Amortization of lease premiums, discounts and incentives	$	(3,763)	$	(8,867)

The amortization of lease premiums decreased $2.8 million, primarily related to lower write-offs of unamortized lease premiums resulting from early lease terminations.

The amortization of lease incentives decreased $2.4 million, primarily related to higher write-offs of lease incentive liabilities during the three months ended November 30, 2022 resulting from lease terminations.

Maintenance revenue. For the three months ended November 30, 2022, we recorded $56.6 million of maintenance revenue, comprised primarily of $17.0 million related to scheduled lease expirations and $21.8 million related to the early lease termination of three narrow-body, one wide-body and one freighter aircraft. We also received $17.8 million of maintenance security letters of credit for our former Russian lessees during the three months ended November 30, 2022, which we have recognized in maintenance revenue – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. For the three months ended November 30, 2021, we recorded $33.5 million of maintenance revenue, comprised primarily of $28.9 million related to the early lease terminations of four narrow-body and one wide-body aircraft and $4.2 million related to scheduled lease expirations.

Gain on sale of flight equipment. During the three months ended November 30, 2022, we sold eight aircraft for gains totaling $53.5 million as compared to three aircraft sold during the three months ended November 30, 2021 for gains totaling $7.4 million.

Other revenue increased $6.2 million attributable to $5.7 million of payments received on general security letters of credit for our former Russian lessees.

Operating expenses

Total operating expenses decreased $44.8 million, attributable to:

Depreciation expense decreased $1.7 million primarily attributable to $10.9 million resulting from seventeen aircraft sold since September 1, 2021 and lower depreciation related to aircraft subject to impairments, including aircraft that were previously leased to Russian airlines. This was partially offset by an increase of $7.4 million related to 25 aircraft acquired since September 1, 2021.

Interest, net increased due to a higher average cost of borrowing, largely offset by lower weighted average debt outstanding of $99.7 million.

Selling, general and administrative expenses increased $0.9 million, primarily due to an increase in personnel costs and Russia-related legal costs.

Impairment of aircraft. During the three months ended November 30, 2022, the Company recorded impairment charges totaling $29.9 million related to two narrow-body aircraft resulting from a scheduled lease expiration and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $26.3 million of maintenance and lease rentals received in advance into revenue for the two narrow-body aircraft.

During the three months ended November 30, 2021, the Company recorded impairment charges totaling $69.1 million related to two narrow-body and one wide-body aircraft, resulting from a lessee default. The Company recognized $24.3 million of maintenance revenue for these three aircraft.

Maintenance and other costs were $3.8 million and $8.7 million for the three months ended November 30, 2022 and 2021, respectively, which related to aircraft that have transitioned or will transition to new lessees as a result of lease

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terminations or scheduled lease expirations. The Company incurred higher maintenance costs during the three months ended November 30, 2021 and continues to incur higher costs compared to historical levels, resulting from extended transition periods driven by supply chain issues and manpower shortages.

Income tax provision

Income tax provision. Our effective tax rate was 31.8% and (59.7)% for the three months ended November 30, 2022 and 2021, respectively. The three months ended November 30, 2021, included certain net non-cash impairment charges, which were recorded in a low tax jurisdiction.

RESULTS OF OPERATIONS

Comparison of the nine months ended November 30, 2022 to the nine months ended November 30, 2021:

	Nine Months Ended November 30,
	2022		2021
	(Dollars in thousands)
Revenues:
Lease rental revenue	$	432,988	$	425,802
Direct financing and sales-type lease revenue	6,950		8,377
Amortization of lease premiums, discounts and incentives	(14,669)		(20,026)
Maintenance revenue	103,787		81,204
Total lease revenue	529,056		495,357
Gain on sale of flight equipment	67,209		17,944
Other revenue	10,394		1,641
Total revenues	606,659		514,942
Operating expenses:
Depreciation	246,296		250,308
Interest, net	151,638		163,965
Selling, general and administrative	55,358		48,714
Provision for credit losses	1,543		970
Impairment of flight equipment	67,979		110,926
Maintenance and other costs	17,010		24,275
Total operating expenses	539,824		599,158
Other income (expense):
Loss on extinguishment of debt	(463)		(14,156)
Other	3,273		57,682
Total other income	2,810		43,526
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	69,645		(40,690)
Income tax provision	22,332		22,877
Earnings of unconsolidated equity method investment, net of tax	1,780		1,210
Net income (loss)	$	49,093	$	(62,357)

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Revenues

Total revenues increased $91.7 million, attributable to:

Lease rental revenue increased $7.2 million as a result of:

•a $47.0 million increase related to 33 aircraft purchased since March 1, 2021;

•a $14.0 million increase in revenue related to the timing of payments for cash basis customers and a lower number of customers for which lease revenue was recognized using a cash basis of accounting rather than an accrual method – see Note 1 in the Notes to Unaudited Consolidated Financial Statements for our lease revenue recognition policy; and

•a $1.0 million increase due to lease extensions, amendments, transitions and other changes.

These increases were partially offset by:

•a $37.9 million decrease due to lease terminations, of which $31.6 million related to the termination of leasing activities with Russian or Russian-affiliated airlines as a result of sanctions; and

•a $16.9 million decrease related to the sale of nineteen aircraft since March 1, 2021.

Direct financing and sales-type lease revenue decreased $1.4 million, primarily related to the sales of eight aircraft since March 1, 2021, partially offset by the reclassification of two aircraft to sales-type leases.

Amortization of lease premiums, discounts and lease incentives:

	Nine Months Ended November 30,
	2022		2021
	(Dollars in thousands)
Amortization of lease premiums	$	(8,227)	$	(12,224)
Amortization of lease discounts	416		671
Amortization of lease incentives	(6,858)		(8,473)
Amortization of lease premiums, discounts and incentives	$	(14,669)	$	(20,026)

The amortization of lease premiums decreased $4.0 million, primarily related to lower write-offs of unamortized lease premiums resulting from early lease terminations.

The amortization of lease incentives decreased $1.6 million, primarily related to higher write-offs of lease incentive liabilities during the nine months ended November 30, 2022 resulting from lease terminations.

Maintenance revenue. For the nine months ended November 30, 2022, we recorded $103.8 million of maintenance revenue, comprised primarily of $28.2 million related to scheduled lease expirations and $33.8 million related to the early lease terminations of three narrow-body, one wide-body, and one freighter aircraft. We also received $41.8 million of maintenance security letters of credit for our former Russian lessees during the nine months ended November 30, 2022, which we have recognized in maintenance revenue – see Note 3 in the Notes to Unaudited Consolidated Financial Statements.

For the nine months ended November 30, 2021, we recorded $81.2 million of maintenance revenue, comprised primarily of $53.7 million related to the early lease terminations of six narrow-body and one wide-body aircraft and $20.5 million related to scheduled lease expirations. In addition, we recorded $5.8 million of maintenance revenue related to one narrow-body and one wide-body aircraft for which the customers were subject to judicial insolvency proceedings or similar protection.

Gain on sale of flight equipment. During the nine months ended November 30, 2022, we sold seventeen aircraft for gains totaling $67.2 million as compared to seven aircraft sold during the nine months ended November 30, 2021 for gains totaling $17.9 million.

Other revenue increased $8.8 million, primarily attributable to $7.1 million of payments received on general security letters of credit for our former Russian lessees.

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Operating expenses

Total operating expenses decreased $59.3 million, attributable to:

Depreciation expense decreased $4.0 million primarily attributable to $30.8 million resulting from 21 aircraft sold since March 1, 2021 and lower depreciation related to aircraft subject to impairments, including aircraft that were previously leased to Russian airlines. This was partially offset by an increase of $21.5 million related to 33 aircraft acquired since March 1, 2021.

Interest, net decreased $12.3 million, primarily due to a lower weighted average debt outstanding of $380.2 million, partially offset by a higher average cost of borrowing.

Selling, general and administrative expenses increased $6.6 million, primarily due to an increase in personnel costs, as well as Russia-related legal costs and travel expenses due to increased business travel.

Impairment of aircraft. Excluding asset write-offs related to Russia, during the nine months ended November 30, 2022, the Company recorded impairment charges totaling $36.1 million primarily related to three narrow-body aircraft resulting from scheduled lease expirations and an early termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $33.8 million of maintenance and lease rentals received in advance into revenue for the three narrow-body aircraft during the nine months ended November 30, 2022.

The Company wrote off the remaining book values of eight narrow-body and one freighter aircraft in Russia which have not been returned to us. As a result, the Company recorded impairment charges totaling $31.9 million during the nine months ended November 30, 2022 – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. During the nine months ended November 30, 2022, the Company recognized $20.3 million of maintenance and other revenue for these nine aircraft related to payments received on maintenance and general security letters of credit.

During the nine months ended November 30, 2021, the Company recorded impairment charges totaling $110.9 million, primarily related to six narrow-body and one wide-body aircraft resulting from early lease terminations, a scheduled lease expiration, and a lessee default. The Company recognized $61.4 million of maintenance revenue for these seven aircraft.

Maintenance and other costs were $17.0 million and $24.3 million for the nine months ended November 30, 2022 and 2021, respectively, which related to aircraft that have transitioned or will transition to new lessees as a result of lease terminations or scheduled lease expirations. The Company incurred higher maintenance costs during the nine months ended November 30, 2021 and continues to incur higher costs compared to historical levels, resulting from extended transition periods driven by supply chain issues and manpower shortages.

Other income (expense)

Total other income decreased by $40.7 million. During the nine months ended November 30, 2021, the Company recognized $55.2 million of proceeds from the sales of unsecured claims related to the LATAM Bankruptcy into other income. This was partially offset by a $14.2 million loss on extinguishment of debt related to the early redemption in full of $500.0 million outstanding aggregate principal amount of our 5.5% Senior Notes due 2022.

Income tax provision

Income tax provision. Our effective tax rate was 32.1% and (56.2)% for the nine months ended November 30, 2022 and 2021, respectively. The nine months ended November 30, 2021 included income from the sale of unsecured claims related to the LATAM Bankruptcy and certain non-cash impairment charges, which were recorded in a low tax jurisdiction.

Aircraft Valuation

Annual Recoverability Assessment

We performed our annual recoverability assessment of all our aircraft during the third quarter of 2022. We recorded an impairment charge of $6.3 million related to one wide-body aircraft during the three and nine months ended November 30, 2022 as a result of our annual recoverability assessment – see Note 2 for further detail regarding impairment of our flight equipment.

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We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.

The recoverability assessment is a comparison of the carrying value of each aircraft to its estimated undiscounted future cash flows. We develop the assumptions used in the recoverability assessment, including those relating to current and future demand for each aircraft type, based on management’s experience in the aircraft leasing industry, as well as information received from third-party sources. Estimates of the undiscounted cash flows for each aircraft type are impacted by changes in contracted and future expected lease rates, residual values, expected scrap values, economic conditions 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, 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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RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

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

RECENT UNADOPTED ACCOUNTING PRONOUNCEMENTS

See Note 1 – “Summary of Significant Accounting Policies – Recent Accounting Pronouncements” in the Notes to Unaudited Consolidated Financial Statements above.

LIQUIDITY AND CAPITAL RESOURCES

Our business is very capital intensive, requiring significant investments in order to expand our fleet and to maintain and improve our existing portfolio. Our operations have historically generated a significant amount of cash, primarily from lease rentals and maintenance collections. We have also met our liquidity and capital resource needs by utilizing several sources over time, including:

•various forms of borrowing secured by our aircraft, including term facilities, bank financings and limited recourse securitization financings for new aircraft acquisitions;

•unsecured indebtedness, including our current unsecured revolving credit facilities, term loan and senior notes;

•asset sales; and

•sales of common and preference shares.

Going forward, we expect to continue to seek liquidity from these sources and other sources, subject to pricing and conditions we consider satisfactory.

During the nine months ended November 30, 2022, we met our liquidity and capital resource needs with $343.5 million of cash flows from operations and $334.2 million of proceeds from the sale of aircraft and other flight equipment.

As of November 30, 2022, the weighted-average maturity of our secured and unsecured debt financings was 2.4 years and we were in compliance with all applicable covenants.

While the industry continues to recover from the impact of COVID-19, according to IATA, as of November 30, 2022, air travel was still down to approximately 75% compared to normal levels. If air traffic remains depressed over an extended period and if our customers are unable to obtain sufficient funds from private, government or other sources, we may need to provide lease concessions to certain customers in the form of deferrals or broader lease restructurings. We may ultimately be unable to collect some or all amounts that we have deferred or may defer in future periods. As of November 30, 2022, we hold $64.9 million in security deposits, $494.1 million in maintenance payments and $80.6 million in letters of credit from our lessees.

We believe we have sufficient liquidity to meet our contractual obligations over the next twelve months and as of January 6, 2023, total liquidity of $2.3 billion includes $1.7 billion of undrawn facilities, $0.4 billion of projected adjusted operating cash flows, $0.1 billion of contracted asset sales and $0.1 billion of unrestricted cash through January 1, 2024. In addition, we believe payments received from lessees and other funds generated from operations, unsecured bond offerings, borrowings secured by our aircraft, borrowings under our revolving credit facilities and other borrowings and proceeds from future aircraft sales will be sufficient to satisfy our liquidity and capital resource needs over the next twelve months. Our liquidity and capital resource needs include payments due under our aircraft purchase obligations, required principal and interest payments under our long-term debt facilities, expected capital expenditures, lessee maintenance payment reimbursements and lease incentive payments.

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Cash Flows

	Nine Months Ended November 30,
	2022		2021
	(Dollars in thousands)
Net cash flow provided by operating activities	$	343,531	$	271,435
Net cash flow used in investing activities	(345,293)		(417,582)
Net cash flow provided by (used in) financing activities	39,288		(155,422)

Operating Activities:

Cash flow provided by operating activities was $343.5 million and $271.4 million for the nine months ended November 30, 2022 and 2021, respectively. The increase of $72.1 million was primarily attributable to:

•$48.9 million of payments received on maintenance and general security letters of credit for our former Russian lessees;

•a $32.8 million increase in cash related to accounts receivable and other assets, primarily due to an increase in customer collections, including the repayment of lease deferrals, as global air traffic recovers from the COVID-19 pandemic; and

•a $14.0 million increase in lease rental revenue related to the timing of payments for cash basis customers and a lower number of customers for which lease rental revenue was recognized using a cash basis of accounting rather than an accrual method for the nine months ended November 30, 2022.

The nine months ended November 30, 2021 included an additional $35.2 million of lease payments related to our former Russian leases.

Investing Activities:

Cash flow used in investing activities was $345.3 million and $417.6 million for the nine months ended November 30, 2022 and 2021, respectively. The decrease of $72.3 million was primarily attributable to a $206.6 million increase in proceeds from the sale of flight equipment, partially offset by a $155.0 million increase in acquisition and improvement of flight equipment.

Financing Activities:

Cash flow provided by financing activities was $39.3 million for the nine months ended November 30, 2022 as compared to cash flow used in financing activities of $155.4 million for the nine months ended November 30, 2021. The net cash increase of $194.7 million was primarily attributable to a $543.1 million decrease in repayments of secured and unsecured debt financings, net of proceeds.

These inflows were partially offset by a $393.4 million decrease in net proceeds from the issuance of preference shares.

Debt Obligations

For complete information on our debt obligations, refer to Note 8 in the Notes to Unaudited Consolidated Financial Statements.

Contractual Obligations

Our contractual obligations consist of principal and interest payments on debt financings, aircraft acquisitions and rent payments related to our office leases. Total contractual obligations decreased to $5.9 billion at November 30, 2022 from $6.0 billion at February 28, 2022, due to lower outstanding debt and the related interest thereon resulting from principal repayments, partially offset by higher aircraft purchase commitments and office lease obligations.

35

Capital Expenditures

From time to time, we make capital expenditures to maintain or improve our aircraft. These expenditures include the cost of major overhauls necessary to place an aircraft in service and modifications made at the request of lessees. For the nine months ended November 30, 2022 and 2021, we incurred a total of $68.4 million and $27.5 million, respectively, of capital expenditures (including lease incentives) related to the improvement of aircraft.

As of November 30, 2022, the weighted average age by net book value of our aircraft was approximately 10.0 years. In general, the costs of operating an aircraft, including maintenance expenditures, increase with the age of the aircraft. Our lease agreements call for the lessee 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 costs in the future in the event we are required to remarket an aircraft, such as in the event of a lessee default 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 several 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 28, 2022.

Off-Balance Sheet Arrangements

We entered into a joint venture arrangement in order to help expand our base of new business opportunities. This joint venture does not qualify for consolidated accounting treatment. 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 Unaudited Consolidated Financial Statements.

We hold a 25% equity interest in our joint venture with Mizuho Leasing and as of November 30, 2022, the net book value of its nine aircraft was $288.6 million.

Foreign Currency Risk and Foreign Operations

At November 30, 2022, more than 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, 2022, expenses, such as personnel and office costs, denominated in currencies other than the U.S. dollar totaled $14.7 million in U.S. dollar equivalents and represented 27% of total selling, general and administrative expenses. Our international operations are a significant component of our business strategy and permit us to 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 nine months ended November 30, 2022 and 2021, we incurred insignificant net gains and losses on foreign currency transactions.

Inflation

Inflation affects our lease rentals, asset values and costs, including operating expenses and maintenance and other costs. We do not believe that our financial results have been, or will be, adversely affected by inflation in a material way.

36

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.

We define Adjusted EBITDA as EBITDA (as defined above) further adjusted to give effect to adjustments required in calculating covenant ratios and compliance as that term is defined in the indenture governing our senior unsecured notes. Adjusted EBITDA is a material component of these covenants.

The table below shows the reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the three and nine months ended November 30, 2022 and 2021:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
Net income (loss)	$	50,104	$	(62,407)	$	49,093	$	(62,357)
Depreciation	82,872		84,526		246,296		250,308
Amortization of lease premiums, discounts and incentives	3,763		8,867		14,669		20,026
Interest, net	50,757		50,515		151,638		163,965
Income tax provision	23,071		23,504		22,332		22,877
EBITDA	210,567		105,005		484,028		394,819
Adjustments:
Impairment of flight equipment	29,880		69,111		67,979		110,926
Loss on extinguishment of debt	—		—		463		14,156
Adjusted EBITDA	$	240,447	$	174,116	$	552,470	$	519,901

Limitations of EBITDA and Adjusted EBITDA

An investor or potential investor may find EBITDA and Adjusted EBITDA important measures in evaluating our performance, results of operations and financial position. We use these non-U.S. GAAP measures to supplement our U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.

EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be viewed in isolation or as substitutes for U.S. GAAP measures of earnings (loss). Material limitations in making the adjustments to our earnings (loss) to calculate EBITDA and Adjusted EBITDA, and using these non-U.S. GAAP measures as compared to U.S. GAAP net income (loss), income (loss) from continuing operations and cash flows provided by or used in operations, include:

•depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our aircraft, which affects the aircraft’s availability for use and may be indicative of future needs for capital expenditures;

37

•the cash portion of income tax provision(benefit) generally represents charges (gains), which may significantly affect our financial results; and

•adjustments required in calculating covenant ratios and compliance as that term is defined in the indenture governing our senior unsecured notes which may not be comparable to similarly titled measures used by other companies.

EBITDA and Adjusted EBITDA are not alternatives to net income (loss), income (loss) from operations or cash flows provided by or used in operations as calculated and presented in accordance with U.S. GAAP. You should not rely on these non-U.S. GAAP measures as a substitute for any such U.S. GAAP financial measure. We strongly urge you to review the reconciliations to U.S. GAAP net income (loss), along with our consolidated financial statements included elsewhere in this report. We also strongly urge you to not rely on any single financial measure to evaluate our business. In addition, because EBITDA and Adjusted EBITDA are not measures of financial performance under U.S. GAAP and are susceptible to varying calculations, EBITDA and Adjusted EBITDA as presented in this report, may differ from and may not be comparable to similarly titled measures used by other companies.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. These risks are highly sensitive to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposures relate to our floating rate debt obligations. Rent payments under our aircraft lease agreements typically do not vary during the term of the lease according to changes in interest rates. However, our borrowing agreements generally require payments based on a variable interest rate index, such as LIBOR, SOFR or an alternative reference rate. Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or cash flow from our securities. Our borrowing agreements may provide a mechanism for determining an alternative rate of interest as entities begin to transition away from LIBOR due to reference rate reform. There is no assurance that any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, LIBOR.

Sensitivity Analysis

The following discussion about the potential effects of changes in interest rates is based on a sensitivity analysis, which models the effects of hypothetical interest rate shifts on our financial condition and results of operations. Although we believe a sensitivity analysis provides the most meaningful analysis permitted by the rules and regulations of the SEC, it is constrained by several factors, including the necessity to conduct the analysis based on a single point in time and by the inability to include the extraordinarily complex market reactions that normally would arise from the market shifts modeled. Although the following results of a sensitivity analysis for changes in interest rates may have some limited use as a benchmark, they should not be viewed as a forecast. This forward-looking disclosure also is selective in nature and addresses only the potential interest expense impacts on our financial instruments. It also does not include a variety of other potential factors that could affect our business as a result of changes in interest rates.

As of November 30, 2022, a hypothetical 100-basis point increase/decrease in interest rates on our variable rate borrowings would result in an interest expense increase/decrease of $2.4 million and $2.4 million, respectively, over the next twelve months.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures” is defined in Exchange Act Rules 13a-15(e) and 15d-15(e). This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate, to allow timely decisions regarding required disclosure. An evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the

38

Company’s disclosure controls and procedures as of November 30, 2022. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of November 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f), that occurred during the quarter ended November 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. — OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

The Company is not a party to any material legal or adverse regulatory proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes to the disclosure related to the risk factors described in our Annual Report on Form 10-K for the year ended February 28, 2022, as filed with the SEC.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

Environmental, Social and Governance (“ESG”)

Information on our ESG initiatives can be found on our website at www.aircastle.com under “About – ESG.” The information on the Company’s website regarding our ESG initiatives is not part of, nor incorporated by reference, into this report, or any other report we file with, or furnish to, the SEC.

39

ITEM 6.    EXHIBITS

Exhibit No.	Description of Exhibit
3.1	Amended and Restated Memorandum of Association (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2020).
3.2	Amended and Restated Bye-laws (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2020).
3.3	Certificate of Designations, dated June 8, 2021 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 8, 2021).
4.1	Specimen Share Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (Amendment No. 2) (No. 333-134669) filed on July 25, 2006).
4.2	Indenture, dated as of December 5, 2013, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 6, 2013).
4.3	Fourth Supplemental Indenture, dated as of March 24, 2016, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 24, 2016).
4.4	Fifth Supplemental Indenture, dated as of March 20, 2017, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 20, 2017).
4.5	Sixth Supplemental Indenture, dated as of September 25, 2018, between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 25, 2018).
4.6	Seventh Supplemental Indenture, dated as of June 13, 2019, between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 13, 2019).
4.7	Indenture, dated as of August 11, 2020, by and between Aircastle Limited and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 11, 2020).
4.8	Indenture, dated as of January 26, 2021, by and between Aircastle and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 26, 2021).
4.9	Deposit Agreement, dated June 8, 2021, among Aircastle Limited, Computer share Inc. and Computershare Trust Company, N.A., acting jointly as depositary, and the holders from time to time of depositary receipts issued thereunder (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 8, 2021).
10.1	Amendment No. 18 to Purchase Agreement COM0270-15, dated as of December 8, 2022 (Amendment No. 18), by and between Aircastle Holding Corporation and Embraer S.A. * ** ØØ
31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. *
31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. *
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of November 30, 2022 and February 28, 2022; (ii) Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three and nine months ended November 30, 2022 and 2021; (iii) Consolidated Statements of Cash Flows for the nine months ended November 30, 2022 and 2021; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended November 30, 2022 and 2021; and (v) Notes to Unaudited Consolidated Financial Statements.*

40

Exhibit No.	Description of Exhibit
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

* Filed herewith.

** Certain attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

ØØ Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

41

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: January 12, 2023

AIRCASTLE LIMITED
(Registrant)
By:	/s/ Dane Silverman
	Dane Silverman
	Chief Accounting Officer and Authorized Officer

42

EX-10.1

Exhibit 10.1

Executed Version

Certain identified information marked with “[***]” has been omitted from this document because it is both (i) not material and (ii) the type that the registrant treats as private or confidential.

AMENDMENT No. 18 TO PURCHASE AGREEMENT COM0270-15

This Amendment No. 18 (COM0194-21), dated as of December 8, 2022 (“Amendment No. 18”), is between Embraer S.A. ("Embraer" or "Seller"), a corporation existing under the laws of Brazil, with its principal place of business at Avenida Brigadeiro Faria Lima, 2170, Putim, in the city of São José dos Campos, State of São Paulo, Brazil, and Aircastle Holding Corporation Limited (“Buyer”) collectively referred to herein as the “Parties”, and constitutes an amendment and modification to Purchase Agreement COM0270-15, dated June 12th, 2015, as amended from time to time (the "Purchase Agreement").

All capitalized terms not otherwise defined herein shall have the same meaning when used herein as provided in the Purchase Agreement and in case of any conflict between this Amendment No. 18 and the Purchase Agreement, this Amendment No. 18 shall control.

WHEREAS, [***].

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged by the Parties, Embraer and Buyer hereby agree as follows:

1. [***].

2. [***].

3. REINSTATEMENT OF PURCHASE AGREEMENT

All other provisions and conditions of the referenced Purchase Agreement, as well as its related Attachments, which are not specifically modified by this Amendment No. 18 shall remain in full force and effect without any change.

4. COUNTERPARTS

This Amendment No. 18 may be signed by the parties hereto in any number of separate counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument and all of which when taken together shall constitute one and the same instrument.

This Amendment No. 18 may be signed by facsimile with originals duly signed to follow by an internationally recognized courier.

[INTENTIONALLY LEFT BLANK – SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Seller and Buyer, by their duly authorized officers, have entered into and executed this Amendment No. 18 to be effective as of the date first written above.

EMBRAER S.A.	AIRCASTLE HOLDING CORPORATION LIMITED
By /s/ Marcelo Santiago Name: Marcelo Santiago Title: Vice President Contracts &               Asset Management	By /s/ Stephen Quinn Name: Stephen Quinn Title: Director
By /s/ Marc Thomas Ahlgrimm Name: Marc Thomas Ahlgrimm Title: Director, Contracts               Administration
Place: São José dos Campos, SP,              Brazil	Place: Stamford, CT, USA

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Inglese, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Aircastle Limited;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 12, 2023

/s/ Michael Inglese

Michael Inglese

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Roy Chandran, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Aircastle Limited;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 12, 2023

/s/ Roy Chandran

Roy Chandran

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Aircastle Limited (the “Company”) for the three months ended November 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Inglese, as Chief Executive Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by section 906 has been provided to Aircastle Limited and will be retained by Aircastle Limited and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Michael Inglese
Name:	Michael Inglese
Title:	Chief Executive Officer
Date:	January 12, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Aircastle Limited (the “Company”) for the three months ended November 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Roy Chandran, as Acting Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by section 906 has been provided to Aircastle Limited and will be retained by Aircastle Limited and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Roy Chandran
Name:	Roy Chandran
Title:	Chief Financial Officer
Date:	January 12, 2023

XML

Cover Page - shares	9 Months Ended
	Nov. 30, 2022	Jan. 06, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Nov. 30, 2022
Document Transition Report	false
Entity File Number	001-32959
Entity Registrant Name	AIRCASTLE LIMITED
Entity Incorporation, State or Country Code	D0
Entity Tax Identification Number	98-0444035
Entity Address, Address Line One	c/o Aircastle Advisor LLC
Entity Address, Address Line Two	201 Tresser Boulevard, Suite 400
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
City Area Code	203
Local Phone Number	504-1020
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,048
Entity Central Index Key	0001362988
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--02-28
Entity Address, Postal Zip Code	06901
Common Shares
Document Information [Line Items]
Title of 12(b) Security	Common Shares, par value $0.01 per share
Security Exchange Name	NONE
No Trading Symbol Flag	true
Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Preference Shares, par value $0.01 per share
Security Exchange Name	NONE
No Trading Symbol Flag	true

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
ASSETS
Cash and cash equivalents	$ 208,208	$ 167,891
Restricted cash and cash equivalents	0	2,791
Accounts receivable	39,087	63,666
Flight equipment held for lease, net	6,445,141	6,313,950
Net investment in leases, net	125,504	150,325
Unconsolidated equity method investment	40,097	38,317
Other assets	328,978	356,326
Total assets	7,187,015	7,093,266
LIABILITIES
Borrowings from secured financings, net	656,032	684,039
Borrowings from unsecured financings, net	3,842,816	3,835,841
Accounts payable, accrued expenses and other liabilities	208,273	177,424
Lease rentals received in advance	52,688	37,361
Security deposits	64,856	69,189
Maintenance payments	494,058	459,713
Total liabilities	5,318,723	5,263,567
Commitments and Contingencies
SHAREHOLDERS’ EQUITY
Preference shares, $0.01 par value, 50,000,000 shares authorized, 400 (aggregate liquidation preference of $400,000) shares issued and outstanding at November 30, 2022 and February 28, 2022	0	0
Common shares, $0.01 par value, 250,000,000 shares authorized, 14,048 shares issued and outstanding at November 30, 2022 and February 28, 2022	0	0
Additional paid-in capital	1,878,774	1,878,774
Accumulated deficit	(10,482)	(49,075)
Total shareholders’ equity	1,868,292	1,829,699
Total liabilities and shareholders’ equity	$ 7,187,015	$ 7,093,266

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Nov. 30, 2022	Feb. 28, 2022
Statement of Financial Position [Abstract]
Preference shares, par value	$ 0.01	$ 0.01
Preference shares, shares authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	400	400
Preferred Stock, Shares Outstanding	400	400
Preferred Stock, Liquidation Preference, Value	$ 400,000	$ 400,000
Common shares, par value	$ 0.01	$ 0.01
Common shares, shares authorized	250,000,000	250,000,000
Common shares, shares issued	14,048	14,048
Common shares, shares outstanding	14,048	14,048

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Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Revenues:
Lease rental revenue	$ 142,336	$ 156,088	$ 432,988	$ 425,802
Direct financing and sales-type lease revenue	2,087	2,724	6,950	8,377
Amortization of lease premiums, discounts and incentives	(3,763)	(8,867)	(14,669)	(20,026)
Maintenance revenue	56,574	33,510	103,787	81,204
Total lease revenue	197,234	183,455	529,056	495,357
Gain on sale of flight equipment	53,473	7,420	67,209	17,944
Other revenue	6,809	605	10,394	1,641
Total revenues	257,516	191,480	606,659	514,942
Operating expenses:
Depreciation	82,872	84,526	246,296	250,308
Interest, net	50,757	50,515	151,638	163,965
Selling, general and administrative	17,999	17,141	55,358	48,714
Provision for credit losses	854	958	1,543	970
Impairment of flight equipment	29,880	69,111	67,979	110,926
Maintenance and other costs	3,783	8,660	17,010	24,275
Total operating expenses	186,145	230,911	539,824	599,158
Other income (expense):
Loss on extinguishment of debt	0	0	(463)	(14,156)
Other	1,201	63	3,273	57,682
Total other income	1,201	63	2,810	43,526
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	72,572	(39,368)	69,645	(40,690)
Income tax provision	23,071	23,504	22,332	22,877
Earnings of unconsolidated equity method investment, net of tax	603	465	1,780	1,210
Net income (loss)	50,104	(62,407)	49,093	(62,357)
Preference share dividends	0	0	(10,500)	(5,658)
Earnings available to common shareholders – Basic	50,104	(62,407)	38,593	(68,015)
Total comprehensive income (loss) available to common shareholders	$ 50,104	$ (62,407)	$ 38,593	$ (68,015)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Cash flows from operating activities:
Net income (loss)	$ 50,104	$ (62,407)	$ 49,093	$ (62,357)
Adjustments to reconcile net income (loss) to net cash and restricted cash provided by operating activities:
Depreciation	82,872	84,526	246,296	250,308
Amortization of deferred financing costs			10,612	12,483
Amortization of lease premiums, discounts and incentives	3,763	8,867	14,669	20,026
Deferred income taxes			13,227	8,998
Collections on net investment in leases			5,444	11,727
Security deposits and maintenance payments included in earnings			(35,437)	(58,480)
Gain on sale of flight equipment	(53,473)	(7,420)	(67,209)	(17,944)
Loss on extinguishment of debt	0	0	463	14,156
Impairment of flight equipment	29,880	69,111	67,979	110,926
Provision for credit losses	854	958	1,543	970
Other			(1,778)	(1,210)
Changes in certain assets and liabilities:
Accounts receivable			11,368	4,059
Other assets			2,223	(23,305)
Accounts payable, accrued expenses and other liabilities			8,947	7,205
Lease rentals received in advance			16,091	(6,127)
Net cash and restricted cash provided by operating activities			343,531	271,435
Cash flows from investing activities:
Acquisition and improvement of flight equipment			(688,722)	(533,741)
Proceeds from sale of flight equipment			334,164	127,584
Aircraft purchase deposits and progress payments, net of deposits returned and aircraft sales deposits			7,765	(11,361)
Payments for (Proceeds from) Other Investing Activities			1,500	(64)
Net cash and restricted cash used in investing activities			(345,293)	(417,582)
Cash flows from financing activities:
Proceeds from Issuance of Preferred Stock and Preference Stock			0	393,347
Proceeds from secured and unsecured debt financings			139,800	0
Repayments of secured and unsecured debt financings			(163,543)	(566,885)
Debt extinguishment costs			(291)	(13,372)
Deferred financing costs			(8,674)	(5,170)
Security deposits and maintenance payments received			110,675	63,012
Security deposits and maintenance payments returned			(17,679)	(20,696)
Dividends paid			(21,000)	(5,658)
Net cash and restricted cash provided by (used in) financing activities			39,288	(155,422)
Net increase in cash and restricted cash:			37,526	(301,569)
Cash and restricted cash at beginning of period			170,682	580,598
Cash and restricted cash at end of period	208,208	279,029	208,208	279,029
Cash and cash equivalents	208,208	276,289	208,208	276,289
Restricted cash and cash equivalents	0	2,740	0	2,740
Unrestricted and restricted cash and cash equivalents	$ 208,208	$ 279,029	208,208	279,029
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized			138,999	151,743
Cash paid for income taxes			4,602	308
Supplemental disclosures of non-cash investing activities:
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets assumed in asset acquisitions			4,005	11,570
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets settled in sale of flight equipment			18,672	14,765
Transfers from flight equipment held for lease to Net investment in leases and Other assets			$ 1,695	$ 22,134

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Consolidated Statements of Shareholder's Equity Statement - USD ($) $ in Thousands	Total	Common Shares	Preferred Stock	Additional Paid-In Capital	Accumulated Deficit
Preferred Stock, Shares Outstanding			0
Balance, shares at Feb. 28, 2021		14,048
Balance at Feb. 28, 2021	$ 1,731,070	$ 0	$ 0	$ 1,485,777	$ 245,293
Net income (loss)	(9,753)
Balance, shares at May. 31, 2021		14,048
Balance at May. 31, 2021	1,721,317	$ 0	0	1,485,777	235,540
Balance, shares at Feb. 28, 2021		14,048
Balance at Feb. 28, 2021	1,731,070	$ 0	0	1,485,777	245,293
Net income (loss)	(62,357)
Balance, shares at Nov. 30, 2021		14,048
Balance at Nov. 30, 2021	2,056,052	$ 0	$ 0	1,878,774	177,278
Preferred Stock, Shares Outstanding			0
Balance, shares at May. 31, 2021		14,048
Balance at May. 31, 2021	1,721,317	$ 0	$ 0	1,485,777	235,540
Net income (loss)	9,803
Stock Issued During Period, Value, New Issues	393,362			393,362
Stock Issued During Period, Shares, New Issues			400
Balance, shares at Aug. 31, 2021		14,048
Balance at Aug. 31, 2021	2,118,824	$ 0	$ 0	1,879,139	239,685
Dividends, Preferred Stock	(5,658)				(5,658)
Preferred Stock, Shares Outstanding			400
Net income (loss)	(62,407)
Stock Issued During Period, Value, New Issues	(365)			(365)
Balance, shares at Nov. 30, 2021		14,048
Balance at Nov. 30, 2021	$ 2,056,052	$ 0	$ 0	1,878,774	177,278
Preferred Stock, Shares Outstanding			400
Preferred Stock, Shares Outstanding	400		400
Balance, shares at Feb. 28, 2022	14,048	14,048
Balance at Feb. 28, 2022	$ 1,829,699	$ 0	$ 0	1,878,774	(49,075)
Net income (loss)	7,682
Balance, shares at May. 31, 2022		14,048
Balance at May. 31, 2022	$ 1,837,381	$ 0	0	1,878,774	(41,393)
Balance, shares at Feb. 28, 2022	14,048	14,048
Balance at Feb. 28, 2022	$ 1,829,699	$ 0	0	1,878,774	(49,075)
Net income (loss)	$ 49,093
Balance, shares at Nov. 30, 2022	14,048	14,048
Balance at Nov. 30, 2022	$ 1,868,292	$ 0	$ 0	1,878,774	(10,482)
Preferred Stock, Shares Outstanding			400
Balance, shares at May. 31, 2022		14,048
Balance at May. 31, 2022	1,837,381	$ 0	$ 0	1,878,774	(41,393)
Net income (loss)	(8,693)
Balance, shares at Aug. 31, 2022		14,048
Balance at Aug. 31, 2022	1,818,188	$ 0	$ 0	1,878,774	(60,586)
Dividends, Preferred Stock	(10,500)				(10,500)
Preferred Stock, Shares Outstanding			400
Net income (loss)	$ 50,104
Balance, shares at Nov. 30, 2022	14,048	14,048
Balance at Nov. 30, 2022	$ 1,868,292	$ 0	$ 0	$ 1,878,774	$ (10,482)
Dividends, Preferred Stock	$ (10,500)
Preferred Stock, Shares Outstanding	400		400

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Summary of Significant Accounting Policies

9 Months Ended

Nov. 30, 2022

Accounting Policies [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Organization

Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda exempted company that was incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act of 1981 of Bermuda. Aircastle’s business consists of acquiring, leasing, managing and selling commercial jet aircraft.

The Company is controlled by affiliates of Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing”). Aircastle is a holding company and conducts its business through subsidiaries that are wholly-owned, either directly or indirectly, by Aircastle.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

The accompanying consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. However, we believe that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2022.

The consolidated financial statements include the accounts of Aircastle and all its subsidiaries, including any Variable Interest Entity (“VIE”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We manage and analyze our business and report on our results of operations based on one operating segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker.

The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of November 30, 2022, through the date on which the consolidated financial statements included in this Form 10-Q were issued.

Risk and Uncertainties

In the normal course of business, Aircastle encounters several significant types of economic risk including credit, market, aviation industry and capital market risks. Credit risk is the risk of a lessee’s inability or unwillingness to make contractually required payments and to fulfill its other contractual obligations to Aircastle. Market risk reflects the change in the value of financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying financings. Aviation industry risk is the risk of a downturn in the commercial aviation industry which could adversely impact a lessee’s ability to make payments, increase the risk of early lease terminations and depress lease rates and the value of the Company’s aircraft. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of its business or to refinance existing debt facilities.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While

Aircastle believes the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

Lease Revenue Recognition

We lease flight equipment under net operating leases with lease terms typically ranging from three to seven years. We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals.

In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within other assets.

Should we determine that the collectability of rental payments is no longer probable, including any deferral thereof, we will recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue.

Impairment of Flight Equipment

We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis. A recoverability assessment is also performed whenever events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. When we perform a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the aircraft exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted lease rental 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. See Note 2 in the Notes to Unaudited Consolidated Financial Statements.

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 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.

We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.

Recent Accounting Pronouncements

In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2022-06 to defer the sunset date of Reference Rate Reform Topic 848 (“ASC 848”). U.S. GAAP requires

entities to evaluate whether a contract modification, such as the replacement or change of a reference rate, results in the establishment of a new contract or continuation of an existing contract. ASC 848 allows an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform as entities transition away from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. The standard provides this temporary election through December 31, 2024, and cannot be applied to contract modifications that occur after December 31, 2024. Reference rate reform will primarily impact our lease and debt arrangements for which floating-rate lease rentals and interest expense are based on LIBOR. As of November 30, 2022, less than 1% of our fleet have floating-rate lease rentals and for the three and nine months ended November 30, 2022, 7% and 9%, respectively, of our interest expense was derived from floating-rate debt which is referenced to LIBOR. We have not adopted ASC 848 and are evaluating the election available to us under the standard.

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Fair Value Measurements

9 Months Ended

Nov. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs.

The following tables set forth our financial assets as of November 30, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

			Fair Value Measurements at November 30, 2022 Using Fair Value Hierarchy
	Fair Value as of November 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Valuation Technique
Assets:
Cash and cash equivalents	$	208,208	$	208,208	$	—	$	—	Market
Total	$	208,208	$	208,208	$	—	$	—

			Fair Value Measurements at February 28, 2022 Using Fair Value Hierarchy
	Fair Value as of February 28, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Valuation Technique
Assets:
Cash and cash equivalents	$	167,891	$	167,891	$	—	$	—	Market
Restricted cash and cash equivalents	2,791		2,791		—		—		Market
Total	$	170,682	$	170,682	$	—	$	—

Our cash and cash equivalents consist largely of money market securities that are highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

We had no transfers into or out of Level 3 during the three and nine months ended November 30, 2022.

We measure the fair value of certain assets and liabilities on a non-recurring basis when U.S. GAAP requires the application of fair value, including events or changes in circumstances that indicate the carrying amounts of these assets may not be recoverable. Assets subject to these measurements include our aircraft and investment in unconsolidated joint venture. We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value

measurements for aircraft in impairment tests are based on the average of the market approach that uses Level 2 inputs, which include third party appraisal data and an income approach that uses Level 3 inputs, which include the Company’s assumptions and appraisal data as to future cash proceeds from leasing and selling aircraft discounted using the Company’s weighted average cost of capital.

We account for our investment in unconsolidated joint venture under the equity method of accounting. Our investment is recorded at cost and is adjusted by undistributed earnings and losses and the distributions of dividends and capital. This investment is reviewed for impairment whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary.

Aircraft Valuation

Impairment of Flight Equipment

During the three months ended November 30, 2022, the Company recorded impairment charges totaling $29.9 million related to two narrow-body aircraft resulting from a scheduled lease expiration and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $26.3 million of maintenance and lease rentals received in advance into revenue for the two narrow-body aircraft during the three months ended November 30, 2022.

Excluding asset write-offs related to Russia, during the nine months ended November 30, 2022, the Company recorded impairment charges totaling $36.1 million primarily related to three narrow-body aircraft resulting from scheduled lease expirations and an early lease termination, as well as one wide-body aircraft resulting from our annual fleet review. The Company recognized $33.8 million of maintenance and lease rentals received in advance into revenue for the three narrow-body aircraft during the nine months ended November 30, 2022.

The Company wrote off the remaining book values of eight narrow-body and one freighter aircraft in Russia which have not been returned to us. As a result, the Company recorded impairment charges totaling $31.9 million during the nine months ended November 30, 2022 – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. During the nine months ended November 30, 2022, the Company recognized $20.3 million of maintenance and other revenue for these nine aircraft related to payments received on maintenance and general security letters of credit.

During the three months ended November 30, 2021, the Company recorded impairment charges totaling $69.1 million related to two narrow-body and one wide-body aircraft, resulting from a lessee default. The Company recognized $24.3 million of maintenance revenue for these three aircraft.

During the nine months ended November 30, 2021, the Company recorded impairment charges totaling $110.9 million, primarily related to six narrow-body and one wide-body aircraft resulting from early lease terminations, a scheduled lease expiration, and a lessee default. The Company recognized $61.4 million of maintenance revenue for these seven aircraft.

Annual Recoverability Assessment

We performed our annual recoverability assessment of all our aircraft during the third quarter of 2022. We recorded an impairment charge of $6.3 million related to one wide-body aircraft during the three and nine months ended November 30, 2022 as a result of our annual recoverability assessment – see the discussion above for further detail regarding impairment of our flight equipment.

We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.

The recoverability assessment is a comparison of the carrying value of each aircraft to its estimated undiscounted future cash flows. We develop the assumptions used in the recoverability assessment, including those relating to current and future demand for each aircraft type, based on management’s experience in the aircraft leasing industry, as well as information received from third-party sources. Estimates of the undiscounted cash flows for each aircraft type are impacted by changes in contracted and future expected lease rates, residual values, expected scrap values, economic conditions 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, 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.

Financial Instruments

Our financial instruments, other than cash, consist principally of cash equivalents, accounts receivable, accounts payable and amounts borrowed under financings. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates the carrying value of these financial instruments because of their short-term nature.

The fair value of our senior notes is estimated using quoted market prices. The fair values of all our other financings are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements.

The carrying amounts and fair values of our financial instruments at November 30, 2022 and February 28, 2022 were as follows:

	November 30, 2022				February 28, 2022
	Carrying  Amount of Liability		Fair Value of Liability		Carrying Amount of Liability		Fair Value of Liability
Credit Facilities	$	20,000	$	20,000	$	20,000	$	20,000
Unsecured Term Loan	155,000		154,824		155,000		152,195
Export Credit Agency (“ECA”) Financings	—		—		21,576		21,931
Term Financings	664,091		641,679		666,258		675,667
Senior Notes	3,700,000		3,467,718		3,700,000		3,776,997

All our financial instruments are classified as Level 2 except for our senior notes, which are classified as Level 1.

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Flight Equipment Held for Lease, Net

9 Months Ended

Nov. 30, 2022

Property, Plant and Equipment [Abstract]

Flight Equipment Held for Lease, Net

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 nine months ended November 30, 2022:

	Amount
Balance at February 28, 2022	$	6,313,950
Additions	668,221
Depreciation	(245,303)
Disposals and transfers to net investment in leases and held for sale	(226,766)
Impairments	(64,961)
Balance at November 30, 2022	$	6,445,141
Accumulated depreciation as of November 30, 2022	$	2,250,527

Write-off of Russian Aircraft

As of November 30, 2022, nine of our aircraft that were previously leased to Russian airlines remain in Russia. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the sanctions imposed on Russia and leasing terminations. While we will continue to pursue repossession, it is unlikely we will regain possession of any of these nine aircraft. As a result, the Company wrote off the remaining book value of these nine aircraft, resulting in impairment charges totaling $31.9 million during the nine months ended November 30, 2022. These nine aircraft have been removed from the Company’s owned fleet count. The Company is vigorously pursuing insurance claims to recover its losses relating to these aircraft and has initiated legal proceedings against its contingent and possessed insurers. The collection, timing and amounts of any insurance recoveries is uncertain.

We also had one freighter aircraft outside of Russia that we successfully repossessed during the three months ended August 31, 2022. Additionally, in response to further sanctions against Russia in the United Kingdom (“U.K.”), the Company terminated the lease of one freighter aircraft with a U.K.-based airline and successfully repossessed that aircraft during the three months ended August 31, 2022. We recognized $18.1 million of maintenance and other revenue as a result of this lease termination. During the three months ended November 30, 2022, we sold these two freighter aircraft and one wide-body aircraft, which was also leased to a Russian airline, for gains totaling $53.5 million.

We received $48.9 million of maintenance and general security letters of credit for our former Russian lessees during the nine months ended November 30, 2022 which we have recognized in maintenance and other revenue. We continue to pursue collection on the remaining letters of credit totaling $0.6 million.

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Lease Rental Revenues and Flight Equipment Held for Lease

9 Months Ended

Nov. 30, 2022

Leases [Abstract]

Lessor, Operating Leases [Text Block]

Note 4. Lease Rental Revenues

Minimum future lease rentals contracted to be received under our existing operating leases of flight equipment at November 30, 2022 were as follows:

Year Ending February 28/29,	Amount(1)
2023 (Remainder of fiscal year)	$	149,970
2024	574,261
2025	486,026
2026	367,340
2027	306,136
Thereafter	900,082
Total	$	2,783,815

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(1)Reflects impact of lessee lease rental deferrals.

At November 30, 2022 and February 28, 2022, the amounts of lease incentive liabilities recorded in maintenance payments on our consolidated balance sheets were $20.2 million and $16.5 million, respectively.

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Net Investment in Leases, Net

9 Months Ended

Nov. 30, 2022

Leases [Abstract]

Net Investment in Leases, Net

Net Investment in Leases, Net

At November 30, 2022 and February 28, 2022, our net investment in leases consisted of eight and eleven aircraft, respectively. The components of our net investment in leases at November 30, 2022 and February 28, 2022, were as follows:

	November 30, 2022		February 28, 2022
Lease receivable	$	46,593	$	52,021
Unguaranteed residual value of flight equipment	82,207		100,068
Net investment leases	128,800		152,089
Allowance for credit losses	(3,296)		(1,764)
Net investment in leases, net	$	125,504	$	150,325

The activity in the allowance for credit losses related to our net investment in leases for the nine months ended November 30, 2022 was as follows:

	Amount
Balance at February 28, 2022	$	1,764
Provision for credit losses	1,543
Write-offs	(11)
Balance at November 30, 2022	$	3,296

At November 30, 2022, future lease payments on net investment in leases are as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	2,824
2024	11,343
2025	9,364
2026	8,233
2027	8,370
Thereafter	15,454
Total lease payments to be received	55,588
Present value of lease payments - lease receivable	(46,593)
Difference between undiscounted lease payments and lease receivable	$	8,995

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Risks and Uncertainties

9 Months Ended

Nov. 30, 2022

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure

Note 6. Concentration of Risk

The classification of regions in the tables below is based on our customers’ principal place of business.

The geographic concentration of the net book value of our fleet (flight equipment held for lease and net investment in leases, or “Net Book Value”) as of November 30, 2022 and February 28, 2022 was as follows:

	November 30, 2022				February 28, 2022
Region	Number of Aircraft		Net Book Value %		Number of Aircraft		Net Book Value %
Asia and Pacific	64		28	%	71		32	%
Europe	90		30	%	98		30	%
Middle East and Africa	9		3	%	10		4	%
North America	37		20	%	36		17	%
South America	28		14	%	25		13	%
Off-lease	13	(1)	5	%	11	(2)	4	%
Total	241		100	%	251		100	%

_______________

(1)Of the thirteen off-lease aircraft at November 30, 2022, we have three narrow-body aircraft and three wide-body aircraft which we are currently marketing for lease or sale.

(2)Of the eleven off-lease aircraft at February 28, 2022, we have one wide-body aircraft which we are currently marketing for lease or sale.

The following table sets forth individual countries representing at least 10% of our Net Book Value as of November 30, 2022 and February 28, 2022:

	November 30, 2022				February 28, 2022
Country	Net Book Value		Net Book Value %	Number of Lessees	Net Book Value		Net Book Value %	Number of Lessees
India(1)	$	—	—%	—	$	670,523	10%	3

_______________

(1) As of November 30, 2022, India represented less than 10% of our Net Book Value.

The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows:

	Three Months Ended November 30,				Nine Months Ended November 30,
Region	2022		2021		2022		2021
Asia and Pacific	31	%	27	%	33	%	31	%
Europe	30	%	31	%	29	%	34	%
Middle East and Africa	5	%	5	%	5	%	5	%
North America	21	%	15	%	19	%	15	%
South America	13	%	22	%	14	%	15	%
Total	100	%	100	%	100	%	100	%

The following table shows the number of lessees with lease rental revenue of at least 5% of total lease rental revenue and their combined total percentage of lease rental revenue for the periods indicated:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue
Largest lessees by lease rental revenue	4	25%	4	34%	4	27%	5	34%

For the three months ended November 30, 2022, total revenue attributable to the United States was 29% and included $13.7 million of maintenance revenue and $47.0 million of gains on sales of aircraft. For the three months ended November 30, 2021, total revenue attributable to the United States was less than 10%.

For the nine months ended November 30, 2022, total revenue attributable to the United States was 18% and included $13.9 million of maintenance revenue and $54.8 million of gains on sales of aircraft. For the nine months ended November 30, 2021, total revenue attributable to the United States was less than 10%.

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Unconsolidated Equity Method Investment (Notes)

9 Months Ended

Nov. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Unconsolidated Equity Method Investment

Unconsolidated Equity Method Investment

We have a joint venture with Mizuho Leasing which has nine aircraft with a net book value of $288.6 million at November 30, 2022.

	Amount
Unconsolidated equity method investment at February 28, 2022	$	38,317
Earnings of unconsolidated equity method investment, net of tax	1,780
Unconsolidated equity method investment at November 30, 2022	$	40,097

On June 30, 2022, the Company received full repayment of the unsecured loan facility it provided to the joint venture in the amount of $1.5 million.

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Borrowings from Secured and Unsecured Debt Financings

9 Months Ended

Nov. 30, 2022

Debt Disclosure [Abstract]

Borrowings from Secured and Unsecured Debt Financings

Borrowings from Secured and Unsecured Debt Financings

The outstanding amounts of our secured and unsecured debt financings were as follows:

	At November 30, 2022					At February 28, 2022
Debt Obligation	Outstanding Borrowings		Number of Aircraft	Interest Rate	Final Stated Maturity	Outstanding Borrowings
Secured Debt Financings:
ECA Financings(1)	$	—	—	—%	N/A	$	21,576
Term Financings(2)	664,091		32	2.36% to 5.69%	06/17/23 to 2/24/32	666,258
Less: Debt issuance costs and discounts	(8,059)		—			(3,795)
Total secured debt financings, net of debt issuance costs and discounts	656,032		32			684,039
Unsecured Debt Financings:
Senior 5.00% Notes due 2023	500,000			5.00%	04/01/23	500,000
Senior 4.40% Notes due 2023	650,000			4.40%	09/25/23	650,000
Senior Notes due 2024	500,000			4.125%	05/01/24	500,000
Senior Notes due 2025	650,000			5.25%	08/11/25	650,000
Senior Notes due 2026	650,000			4.25%	06/15/26	650,000
Senior Notes due 2028	750,000			2.85%	01/26/28	750,000
Unsecured Term Loans	155,000			4.84%	02/27/24	155,000
Revolving Credit Facilities	20,000			4.78%	2/28/23 to 05/24/25	20,000
Less: Debt issuance costs and discounts	(32,184)					(39,159)
Total unsecured debt financings, net of debt issuance costs and discounts	3,842,816					3,835,841
Total secured and unsecured debt financings, net of debt issuance costs and discounts	$	4,498,848				$	4,519,880

(1)In May 2022, we repaid the principal and accrued interest outstanding under our remaining ECA Financing and incurred early extinguishment costs of $0.5 million.

(2)The borrowings under these financings at November 30, 2022 have a weighted-average fixed rate of interest of 4.02%.

Secured Debt Financings:

Term Financings

On November 21, 2022 (“the “Effective Date”), we entered into a full recourse $450.0 million secured financing facility (the “2022 Secured Facility”) with a syndicate of banks in relation to seventeen owned aircraft. The 2022 Secured Facility bears interest at a floating rate under the Term Secured Overnight Funding Rate (“SOFR”) (as defined in the credit agreement governing the 2022 Secured Facility) plus 2.35% per annum and matures on November 21, 2029. The 2022 Secured Facility contains, among other customary provisions, a $1.1 billion minimum net worth covenant, a 2.0:1.0 minimum interest coverage ratio covenant, and a 75% maximum loan-to-value ratio, which reduces to 70% through the term of the facility. The credit commitments under the 2022 Secured Facility will be available for borrowings for three to six months following the Effective Date. As of November 30, 2022, no amounts were borrowed under the 2022 Secured Facility.

Unsecured Debt Financings:

Revolving Credit Facilities

On May 24, 2022, we entered into an amendment for one of our unsecured revolving credit facilities that expanded the size and extended the term of the facility. As a result, the existing $230.0 million commitment was expanded to $280.0 million, with $35.0 million and $245.0 million of the commitment allocated to Tranche B and Tranche C, respectively. Tranche B will mature on February 28, 2023 and Tranche C will mature on May 24, 2025. Tranche A matured on its stated maturity date of December 27, 2021.

On June 27, 2022, a $100.0 million commitment under one of our unsecured revolving credit facilities, with a total commitment of $1.0 billion, matured on its stated maturity date. On September 8, 2022, we entered into an amendment that expanded the size of the facility from $900.0 million to $1.0 billion and replaced LIBOR with Term SOFR as the benchmark interest rate. The facility bears interest at Adjusted Term SOFR (as defined in the amendment to the credit agreement) plus 1.625% per annum and matures on April 26, 2025.

On July 30, 2022, a $50.0 million commitment under our revolving credit facility with Mizuho Bank Ltd., a related party, matured on its stated maturity date.

As of November 30, 2022, we had $20.0 million outstanding under our revolving credit facilities and had $1.4 billion available for borrowing.

As of November 30, 2022, we were in compliance with all applicable covenants in our financings.

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Shareholders’ Equity

9 Months Ended

Nov. 30, 2022

Equity [Abstract]

Shareholders’ Equity

Shareholders' Equity

On March 15, 2022, the Company paid a quarterly dividend in the amount of $10.5 million for its Preference Shares, which was approved by the Company’s Board of Directors on January 6, 2022, and accrued as of February 28, 2022.

On September 15, 2022, the Company paid a quarterly dividend in the amount of $10.5 million for its Preference Shares, which was approved by the Company’s Board of Directors on July 6, 2022, and accrued as of August 31, 2022.

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Related Party Disclosures	9 Months Ended
	Nov. 30, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company incurred fees from Marubeni as part of its intra-company service agreement totaling $1.3 million and $1.0 million during the three months ended November 30, 2022 and 2021, respectively, and $3.9 million and $2.9 million during the nine months ended November 30, 2022 and 2021, respectively, whereby Marubeni provides certain management and administrative services to the Company. In addition, the Company purchased parts under a parts management services and supply agreement with an affiliate of Marubeni totaling $0.4 million and $2.7 million during the three months ended November 30, 2022 and 2021, respectively, and $3.7 million and $4.6 million during the nine months ended November 30, 2022 and 2021, respectively

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Income Taxes

9 Months Ended

Nov. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesIncome taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned. The Company received assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035. Consequently, the provision for income taxes relates to income earned by certain subsidiaries of the Company which are located in, or earn income in, jurisdictions that impose income taxes, primarily the United States and Ireland.

The sources of income (loss) from continuing operations before income taxes and earnings of our unconsolidated equity method investment for the three and nine months ended November 30, 2022 and 2021 were as follows:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
U.S. operations	$	5,868	$	6,218	$	15,994	$	14,408
Non-U.S. operations	66,704		(45,586)		53,651		(55,098)
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	$	72,572	$	(39,368)	$	69,645	$	(40,690)

Our aircraft-owning subsidiaries generally earn income from sources outside the U.S. and typically are not subject to U.S. federal, state or local income taxes. The aircraft owning subsidiaries resident in the U.S. and Ireland are subject to tax in those respective jurisdictions.

We have a U.S.-based subsidiary which provides management services to our subsidiaries and is subject to U.S. federal, state and local income taxes. We also have Ireland and Singapore based subsidiaries which provide management services to our non-U.S. subsidiaries and are subject to tax in those respective jurisdictions.

The Company’s effective tax rate (“ETR”) for the three months ended November 30, 2022 and 2021 was 31.8% and (59.7)%, respectively, and for the nine months ended November 30, 2022 and 2021 was 32.1% and (56.2)%, respectively. The movement in the ETR is primarily caused by changes in the mix of the Company’s pre-tax income/(loss) in its taxable and non-tax jurisdictions. The nine months ended November 30, 2022 included gains on sales of aircraft that were recorded in a low tax jurisdiction. The nine months ended November 30, 2021 included certain net non-cash impairment charges and income from the sale of unsecured claims filed by the Company against LATAM Airlines Group S.A. and certain of its subsidiaries (“LATAM”) in respect of LATAM’s Chapter 11 filing (the “LATAM Bankruptcy”), which were recorded in a low tax jurisdiction.

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Interest, Net

9 Months Ended

Nov. 30, 2022

Interest Income (Expense), Net [Abstract]

Interest Net

Interest, Net

The following table shows the components of interest, net:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
Interest on borrowings and other liabilities	$	49,436	$	47,152	$	145,069	$	153,287
Amortization of deferred financing fees and debt discount	3,517		4,099		10,612		12,483
Interest expense	52,953		51,251		155,681		165,770
Less: Interest income	(1,394)		(448)		(2,401)		(1,160)
Less: Capitalized interest	(802)		(288)		(1,642)		(645)
Interest, net	$	50,757	$	50,515	$	151,638	$	163,965

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Commitments and Contingencies

9 Months Ended

Nov. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Office rent expense was $0.5 million and $0.4 million, and $1.4 million and $1.2 million, for the three and nine months ended November 30, 2022 and 2021, respectively.

As of November 30, 2022, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in Stamford, Connecticut; Dublin, Ireland; and Singapore for future minimum lease payments as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	485
2024	2,243
2025	2,882
2026	2,731
2027	2,671
Thereafter	19,543
Total	$	30,555

At November 30, 2022, we had commitments to acquire 23 aircraft for $857.8 million.

At November 30, 2022, commitments, including $46.2 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft, net of amounts already paid, are as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	483,357
2024	179,037
2025	195,380
2026	—
2027	—
Thereafter	—
Total	$	857,774

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Other Assets

9 Months Ended

Nov. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

Other assets consisted of the following as of November 30, 2022 and February 28, 2022:

	November 30, 2022		February 28, 2022
Deferred income tax asset	$	380	$	570
Lease incentives and lease premiums, net of amortization of $84,729 and $81,553, respectively	57,476		53,513
Flight equipment held for sale	33,588		77,636
Aircraft purchase deposits and Embraer E-2 progress payments	63,123		56,157
Right-of-use asset(1)	16,959		7,176
Deferred rent receivable	47,079		55,478
Other assets	110,373		105,796
Total other assets	$	328,978	$	356,326

______________

(1)Net of lease incentives and tenant allowances.

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Accounts Payable, Accrued Expenses and Other Liabilities

9 Months Ended

Nov. 30, 2022

Payables and Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts payable, accrued expenses and other liabilities consisted of the following as of November 30, 2022 and February 28, 2022:

	November 30, 2022		February 28, 2022
Accounts payable, accrued expenses and other liabilities	$	59,491	$	58,882
Deferred income tax liability	79,161		66,123
Accrued interest payable	46,328		42,013
Lease liability	19,597		9,846
Lease discounts, net of amortization of $45,237 and $45,546, respectively	3,696		560
Total accounts payable, accrued expenses and other liabilities	$	208,273	$	177,424

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Subsequent Event	9 Months Ended
	Nov. 30, 2022
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Nov. 30, 2022

Accounting Policies [Abstract]

Organization and Basis of Presentation

Organization

Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda exempted company that was incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act of 1981 of Bermuda. Aircastle’s business consists of acquiring, leasing, managing and selling commercial jet aircraft.

The Company is controlled by affiliates of Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing”). Aircastle is a holding company and conducts its business through subsidiaries that are wholly-owned, either directly or indirectly, by Aircastle.

Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

The accompanying consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. However, we believe that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2022.

The consolidated financial statements include the accounts of Aircastle and all its subsidiaries, including any Variable Interest Entity (“VIE”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

We manage and analyze our business and report on our results of operations based on one operating segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker.

The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of November 30, 2022, through the date on which the consolidated financial statements included in this Form 10-Q were issued.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While

Aircastle believes the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates.

Revenue Recognition Leases, Operating [Policy Text Block]

Lease Revenue Recognition

We lease flight equipment under net operating leases with lease terms typically ranging from three to seven years. We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals.

In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within other assets.

Should we determine that the collectability of rental payments is no longer probable, including any deferral thereof, we will recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue.

New Accounting Pronouncements, Policy

Recent Accounting Pronouncements

In December 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2022-06 to defer the sunset date of Reference Rate Reform Topic 848 (“ASC 848”). U.S. GAAP requires

entities to evaluate whether a contract modification, such as the replacement or change of a reference rate, results in the establishment of a new contract or continuation of an existing contract. ASC 848 allows an entity to elect not to apply certain modification accounting requirements to contracts affected by reference rate reform as entities transition away from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. The standard provides this temporary election through December 31, 2024, and cannot be applied to contract modifications that occur after December 31, 2024. Reference rate reform will primarily impact our lease and debt arrangements for which floating-rate lease rentals and interest expense are based on LIBOR. As of November 30, 2022, less than 1% of our fleet have floating-rate lease rentals and for the three and nine months ended November 30, 2022, 7% and 9%, respectively, of our interest expense was derived from floating-rate debt which is referenced to LIBOR. We have not adopted ASC 848 and are evaluating the election available to us under the standard.

Concentration Risk, Credit Risk, Policy

Risk and Uncertainties

In the normal course of business, Aircastle encounters several significant types of economic risk including credit, market, aviation industry and capital market risks. Credit risk is the risk of a lessee’s inability or unwillingness to make contractually required payments and to fulfill its other contractual obligations to Aircastle. Market risk reflects the change in the value of financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying financings. Aviation industry risk is the risk of a downturn in the commercial aviation industry which could adversely impact a lessee’s ability to make payments, increase the risk of early lease terminations and depress lease rates and the value of the Company’s aircraft. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of its business or to refinance existing debt facilities.

Impairment or Disposal of Long-Lived Assets, Policy

Impairment of Flight Equipment

We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis. A recoverability assessment is also performed whenever events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. When we perform a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the aircraft exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted lease rental 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. See Note 2 in the Notes to Unaudited Consolidated Financial Statements.

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 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.

We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration.

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Fair Value Measurements (Tables)

9 Months Ended

Nov. 30, 2022

Fair Value Disclosures [Abstract]

Fair value assets and liabilities measured on recurring basis

The following tables set forth our financial assets as of November 30, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.

			Fair Value Measurements at November 30, 2022 Using Fair Value Hierarchy
	Fair Value as of November 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Valuation Technique
Assets:
Cash and cash equivalents	$	208,208	$	208,208	$	—	$	—	Market
Total	$	208,208	$	208,208	$	—	$	—

			Fair Value Measurements at February 28, 2022 Using Fair Value Hierarchy
	Fair Value as of February 28, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Valuation Technique
Assets:
Cash and cash equivalents	$	167,891	$	167,891	$	—	$	—	Market
Restricted cash and cash equivalents	2,791		2,791		—		—		Market
Total	$	170,682	$	170,682	$	—	$	—

Carrying amounts and fair values of financial instruments

The carrying amounts and fair values of our financial instruments at November 30, 2022 and February 28, 2022 were as follows:

	November 30, 2022				February 28, 2022
	Carrying  Amount of Liability		Fair Value of Liability		Carrying Amount of Liability		Fair Value of Liability
Credit Facilities	$	20,000	$	20,000	$	20,000	$	20,000
Unsecured Term Loan	155,000		154,824		155,000		152,195
Export Credit Agency (“ECA”) Financings	—		—		21,576		21,931
Term Financings	664,091		641,679		666,258		675,667
Senior Notes	3,700,000		3,467,718		3,700,000		3,776,997

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Flight Equipment Held for Lease, Net (Tables)

9 Months Ended

Nov. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment, Lessor Asset under Operating Lease

The following table summarizes the activities for the Company’s flight equipment held for lease for the nine months ended November 30, 2022:

	Amount
Balance at February 28, 2022	$	6,313,950
Additions	668,221
Depreciation	(245,303)
Disposals and transfers to net investment in leases and held for sale	(226,766)
Impairments	(64,961)
Balance at November 30, 2022	$	6,445,141
Accumulated depreciation as of November 30, 2022	$	2,250,527

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Lease Rental Revenues and Flight Equipment Held for Lease (Tables)

9 Months Ended

Nov. 30, 2022

Leases [Abstract]

Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity

Minimum future lease rentals contracted to be received under our existing operating leases of flight equipment at November 30, 2022 were as follows:

Year Ending February 28/29,	Amount(1)
2023 (Remainder of fiscal year)	$	149,970
2024	574,261
2025	486,026
2026	367,340
2027	306,136
Thereafter	900,082
Total	$	2,783,815

_______________

(1)Reflects impact of lessee lease rental deferrals.

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Net Investment in Leases, Net (Tables)

9 Months Ended

Nov. 30, 2022

Leases [Abstract]

Schedule of Components of Net Investment in Leases

The components of our net investment in leases at November 30, 2022 and February 28, 2022, were as follows:

	November 30, 2022		February 28, 2022
Lease receivable	$	46,593	$	52,021
Unguaranteed residual value of flight equipment	82,207		100,068
Net investment leases	128,800		152,089
Allowance for credit losses	(3,296)		(1,764)
Net investment in leases, net	$	125,504	$	150,325

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

The activity in the allowance for credit losses related to our net investment in leases for the nine months ended November 30, 2022 was as follows:

	Amount
Balance at February 28, 2022	$	1,764
Provision for credit losses	1,543
Write-offs	(11)
Balance at November 30, 2022	$	3,296

At November 30, 2022, future lease payments on net investment in leases are as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	2,824
2024	11,343
2025	9,364
2026	8,233
2027	8,370
Thereafter	15,454
Total lease payments to be received	55,588
Present value of lease payments - lease receivable	(46,593)
Difference between undiscounted lease payments and lease receivable	$	8,995

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Risks and Uncertainties (Tables)

9 Months Ended

Nov. 30, 2022

Risks and Uncertainties [Abstract]

Long-lived Assets by Geographic Areas [Table Text Block]

The geographic concentration of the net book value of our fleet (flight equipment held for lease and net investment in leases, or “Net Book Value”) as of November 30, 2022 and February 28, 2022 was as follows:

	November 30, 2022				February 28, 2022
Region	Number of Aircraft		Net Book Value %		Number of Aircraft		Net Book Value %
Asia and Pacific	64		28	%	71		32	%
Europe	90		30	%	98		30	%
Middle East and Africa	9		3	%	10		4	%
North America	37		20	%	36		17	%
South America	28		14	%	25		13	%
Off-lease	13	(1)	5	%	11	(2)	4	%
Total	241		100	%	251		100	%

_______________

(1)Of the thirteen off-lease aircraft at November 30, 2022, we have three narrow-body aircraft and three wide-body aircraft which we are currently marketing for lease or sale.

(2)Of the eleven off-lease aircraft at February 28, 2022, we have one wide-body aircraft which we are currently marketing for lease or sale.

Revenue from External Customers by Geographic Areas [Table Text Block]

The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows:

	Three Months Ended November 30,				Nine Months Ended November 30,
Region	2022		2021		2022		2021
Asia and Pacific	31	%	27	%	33	%	31	%
Europe	30	%	31	%	29	%	34	%
Middle East and Africa	5	%	5	%	5	%	5	%
North America	21	%	15	%	19	%	15	%
South America	13	%	22	%	14	%	15	%
Total	100	%	100	%	100	%	100	%

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

The following table shows the number of lessees with lease rental revenue of at least 5% of total lease rental revenue and their combined total percentage of lease rental revenue for the periods indicated:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue	Number of Lessees	Combined % of Lease Rental Revenue
Largest lessees by lease rental revenue	4	25%	4	34%	4	27%	5	34%

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

The following table sets forth individual countries representing at least 10% of our Net Book Value as of November 30, 2022 and February 28, 2022:

	November 30, 2022				February 28, 2022
Country	Net Book Value		Net Book Value %	Number of Lessees	Net Book Value		Net Book Value %	Number of Lessees
India(1)	$	—	—%	—	$	670,523	10%	3

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Unconsolidated Equity Method Investment (Tables)

9 Months Ended

Nov. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

	Amount
Unconsolidated equity method investment at February 28, 2022	$	38,317
Earnings of unconsolidated equity method investment, net of tax	1,780
Unconsolidated equity method investment at November 30, 2022	$	40,097

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Borrowings from Secured and Unsecured Debt Financings (Tables)

9 Months Ended

Nov. 30, 2022

Debt Disclosure [Abstract]

Outstanding amounts of secured and unsecured term debt financings

The outstanding amounts of our secured and unsecured debt financings were as follows:

	At November 30, 2022					At February 28, 2022
Debt Obligation	Outstanding Borrowings		Number of Aircraft	Interest Rate	Final Stated Maturity	Outstanding Borrowings
Secured Debt Financings:
ECA Financings(1)	$	—	—	—%	N/A	$	21,576
Term Financings(2)	664,091		32	2.36% to 5.69%	06/17/23 to 2/24/32	666,258
Less: Debt issuance costs and discounts	(8,059)		—			(3,795)
Total secured debt financings, net of debt issuance costs and discounts	656,032		32			684,039
Unsecured Debt Financings:
Senior 5.00% Notes due 2023	500,000			5.00%	04/01/23	500,000
Senior 4.40% Notes due 2023	650,000			4.40%	09/25/23	650,000
Senior Notes due 2024	500,000			4.125%	05/01/24	500,000
Senior Notes due 2025	650,000			5.25%	08/11/25	650,000
Senior Notes due 2026	650,000			4.25%	06/15/26	650,000
Senior Notes due 2028	750,000			2.85%	01/26/28	750,000
Unsecured Term Loans	155,000			4.84%	02/27/24	155,000
Revolving Credit Facilities	20,000			4.78%	2/28/23 to 05/24/25	20,000
Less: Debt issuance costs and discounts	(32,184)					(39,159)
Total unsecured debt financings, net of debt issuance costs and discounts	3,842,816					3,835,841
Total secured and unsecured debt financings, net of debt issuance costs and discounts	$	4,498,848				$	4,519,880

(1)In May 2022, we repaid the principal and accrued interest outstanding under our remaining ECA Financing and incurred early extinguishment costs of $0.5 million.

(2)The borrowings under these financings at November 30, 2022 have a weighted-average fixed rate of interest of 4.02%.

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Income Taxes (Tables)

9 Months Ended

Nov. 30, 2022

Income Tax Disclosure [Abstract]

Sources of income from continuing operations before income taxes

The sources of income (loss) from continuing operations before income taxes and earnings of our unconsolidated equity method investment for the three and nine months ended November 30, 2022 and 2021 were as follows:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
U.S. operations	$	5,868	$	6,218	$	15,994	$	14,408
Non-U.S. operations	66,704		(45,586)		53,651		(55,098)
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment	$	72,572	$	(39,368)	$	69,645	$	(40,690)

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Interest, Net (Tables)

9 Months Ended

Nov. 30, 2022

Interest Income (Expense), Net [Abstract]

Components of Interest

The following table shows the components of interest, net:

	Three Months Ended November 30,				Nine Months Ended November 30,
	2022		2021		2022		2021
Interest on borrowings and other liabilities	$	49,436	$	47,152	$	145,069	$	153,287
Amortization of deferred financing fees and debt discount	3,517		4,099		10,612		12,483
Interest expense	52,953		51,251		155,681		165,770
Less: Interest income	(1,394)		(448)		(2,401)		(1,160)
Less: Capitalized interest	(802)		(288)		(1,642)		(645)
Interest, net	$	50,757	$	50,515	$	151,638	$	163,965

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Commitments and Contingencies (Tables)

9 Months Ended

Nov. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of obligations under non-cancelable operating leases

As of November 30, 2022, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in Stamford, Connecticut; Dublin, Ireland; and Singapore for future minimum lease payments as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	485
2024	2,243
2025	2,882
2026	2,731
2027	2,671
Thereafter	19,543
Total	$	30,555

Long-term Purchase Commitment

commitments, including $46.2 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft, net of amounts already paid, are as follows:

Year Ending February 28/29,	Amount
2023 (Remainder of fiscal year)	$	483,357
2024	179,037
2025	195,380
2026	—
2027	—
Thereafter	—
Total	$	857,774

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Other Assets (Tables)

9 Months Ended

Nov. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Principal components of other assets

Other assets consisted of the following as of November 30, 2022 and February 28, 2022:

	November 30, 2022		February 28, 2022
Deferred income tax asset	$	380	$	570
Lease incentives and lease premiums, net of amortization of $84,729 and $81,553, respectively	57,476		53,513
Flight equipment held for sale	33,588		77,636
Aircraft purchase deposits and Embraer E-2 progress payments	63,123		56,157
Right-of-use asset(1)	16,959		7,176
Deferred rent receivable	47,079		55,478
Other assets	110,373		105,796
Total other assets	$	328,978	$	356,326

______________

(1)Net of lease incentives and tenant allowances.

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Accounts Payable, Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Nov. 30, 2022

Payables and Accruals [Abstract]

Principal components of accounts payable, accrued expenses and other liabilities recorded on our consolidated balance sheet

Accounts payable, accrued expenses and other liabilities consisted of the following as of November 30, 2022 and February 28, 2022:

	November 30, 2022		February 28, 2022
Accounts payable, accrued expenses and other liabilities	$	59,491	$	58,882
Deferred income tax liability	79,161		66,123
Accrued interest payable	46,328		42,013
Lease liability	19,597		9,846
Lease discounts, net of amortization of $45,237 and $45,546, respectively	3,696		560
Total accounts payable, accrued expenses and other liabilities	$	208,273	$	177,424

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Nov. 30, 2022 USD ($)	Nov. 30, 2022 USD ($) segment
Accounting Policies [Line Items]
Number of Operating Segments | segment		1
Percentage of Fleet Having Floating-rate Lease Rentals	1.00%	1.00%
Percentage of Interest Expense Derived from Floating-rate Debt	7.00%	9.00%
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit
Accounting Policies [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 280,000	$ 280,000
Tranche C ($245mm) - DBS Revolving Credit Facility | Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit
Accounting Policies [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 245,000	$ 245,000
Minimum | Property Subject to Operating Lease | Flight Equipment
Accounting Policies [Line Items]
Lessor, Operating Lease, Term of Contract	3 years	3 years
Maximum | Property Subject to Operating Lease | Flight Equipment
Accounting Policies [Line Items]
Lessor, Operating Lease, Term of Contract	7 years	7 years

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Fair Value Measurements - Assets Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Cash and cash equivalents	$ 208,208	$ 167,891
Restricted cash and cash equivalents		2,791
Total	208,208	170,682
Significant Other Observable Inputs (Level 2)
Assets:
Cash and cash equivalents	0	0
Restricted cash and cash equivalents		0
Total	0	0
Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	0	0
Restricted cash and cash equivalents		0
Total	0	0
Estimate of Fair Value Measurement
Assets:
Cash and cash equivalents	208,208	167,891
Restricted cash and cash equivalents		2,791
Total	$ 208,208	$ 170,682

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Fair Value Measurements - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($) aircraft	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($) aircraft
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net			$ 0
Impairment of flight equipment	$ 29,880	$ 69,111	67,979	$ 110,926
Revenue from Contract with Customer, Excluding Assessed Tax	257,516	191,480	606,659	514,942
Maintenance revenue	56,574	$ 33,510	103,787	$ 81,204
Maintenance and Security Deposit [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 26,300		33,800
Russian Invasion of Ukraine
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Impairment of flight equipment			31,900
Russian Invasion of Ukraine | Maintenance and Security Deposit [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax			$ 20,300
Transactional
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of aircrafts impaired | aircraft		3		7
Maintenance revenue		$ 24,300		$ 61,400
Transactional | Narrow-body [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of aircrafts impaired | aircraft	2	2	3	6
Transactional | Wide-body [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of aircrafts impaired | aircraft		1		1
Impairments not Related to Russian Invasion of Ukraine
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Impairment of flight equipment	$ 29,900	$ 69,100	$ 36,100	$ 110,900
Fleet Review [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Impairment of flight equipment	$ 6,300
Fleet Review [Member] | Wide-body [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of aircrafts impaired | aircraft	1
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			9
Aircraft Remaining in Country of Base Operations | Russian Invasion of Ukraine | Narrow-body [Member] | RUSSIAN FEDERATION
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			8
Aircraft Remaining in Country of Base Operations | Russian Invasion of Ukraine | Total wide-body and narrow-body [Member] | RUSSIAN FEDERATION
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			9
Aircraft Remaining in Country of Base Operations | Russian Invasion of Ukraine | Freighter | RUSSIAN FEDERATION
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			1

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Fair Value Measurements - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
Unsecured Debt | Significant Other Observable Inputs (Level 2) | Reported Value Measurement | Revolving Credit Facility
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	$ 20,000	$ 20,000
Unsecured Debt | Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | Revolving Credit Facility
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	20,000	20,000
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Reported Value Measurement | DBJ Term Loan
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	155,000	155,000
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Reported Value Measurement | Senior Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	3,700,000	3,700,000
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Estimate of Fair Value Measurement | DBJ Term Loan
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	154,824	152,195
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Estimate of Fair Value Measurement | Senior Notes
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	3,467,718	3,776,997
Secured Debt | Significant Other Observable Inputs (Level 2) | Reported Value Measurement | ECA Term Financings
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	0	21,576
Secured Debt | Significant Other Observable Inputs (Level 2) | Reported Value Measurement | Term Financings
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	664,091	666,258
Secured Debt | Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | ECA Term Financings
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	0	21,931
Secured Debt | Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | Term Financings
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	$ 641,679	$ 675,667

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Flight Equipment Held for Lease, Net (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)	Feb. 28, 2022 USD ($)
Property, Plant and Equipment [Abstract]
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation	$ 6,445,141		$ 6,445,141		$ 6,313,950
Impairment of flight equipment	29,880	$ 69,111	67,979	$ 110,926
Depreciation	82,872	84,526	246,296	250,308
Transfers from flight equipment held for lease to Net investment in leases and Other assets			1,695	22,134
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Depreciation	$ 82,872	$ 84,526	$ 246,296	$ 250,308
Percentage of geographic concentration	100.00%	100.00%	100.00%	100.00%	100.00%
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation	$ 6,445,141		$ 6,445,141		$ 6,313,950
Transfers from flight equipment held for lease to Net investment in leases and Other assets			1,695	$ 22,134
Impairment of flight equipment	29,880	$ 69,111	67,979	110,926
Revenue from Contract with Customer, Excluding Assessed Tax	257,516	191,480	606,659	514,942
Proceeds from Sale of Flight Equipment			334,164	127,584
Gain on sale of flight equipment	$ 53,473	$ 7,420	67,209	$ 17,944
Wide-body [Member]
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Property, Plant and Equipment, Number of Aircraft Sold | aircraft	1
Freighter
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Property, Plant and Equipment, Number of Aircraft Sold | aircraft	2
Freighter and Widebody Aircraft
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Gain on sale of flight equipment	$ 53,500
Russian Invasion of Ukraine
Property, Plant and Equipment [Abstract]
Impairment of flight equipment			31,900
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Impairment of flight equipment			31,900
RUSSIAN FEDERATION
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Letters of Credit Outstanding, Amount	600		600
Proceeds from Lines of Credit			$ 48,900
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			9
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION | Russian Invasion of Ukraine | Narrow-body [Member]
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			8
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION | Russian Invasion of Ukraine | Freighter
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Number of Aircraft on Lease with Russian Airlines | aircraft			1
Aircraft Outside Country of Base Operations | UNITED KINGDOM | Freighter
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Number of Aircraft Repossessed | aircraft			1
Flight Equipment
Property, Plant and Equipment [Abstract]
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation	6,445,141		$ 6,445,141		6,313,950
Property, Plant and Equipment, Additions			668,221
Property, Plant, and Equipment, Lessor Asset under Operating Lease, Accumulated Depreciation	2,250,527		2,250,527
Impairment of flight equipment			64,961
Depreciation			245,303
Transfers from flight equipment held for lease to Net investment in leases and Other assets			(226,766)
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items]
Property, Plant and Equipment, Additions			668,221
Depreciation			245,303
Property, Plant, and Equipment, Lessor Asset under Operating Lease, Accumulated Depreciation	2,250,527		2,250,527
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation	$ 6,445,141		6,445,141		$ 6,313,950
Transfers from flight equipment held for lease to Net investment in leases and Other assets			(226,766)
Impairment of flight equipment			$ 64,961

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Lease Rental Revenues and Flight Equipment Held for Lease (Details) $ in Thousands	Nov. 30, 2022 USD ($)
Annual future minimum lease rentals receivable
2023 (Remainder of fiscal year)	$ 149,970
2024	574,261
2025	486,026
2026	367,340
2027	306,136
Thereafter	900,082
Total	$ 2,783,815

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Lease Rental Revenues and Flight Equipment Held for Lease (Details Textual) - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
Maintenance Payments
Revenue, Major Customer [Line Items]
Lease incentive liabilities	$ 20,200	$ 16,500

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Net Investment in Leases, Net (Details Textual) - aircraft	Nov. 30, 2022	Feb. 28, 2022
Leases [Abstract]
Net Investment in Lease, Number of Leased Assets	8	11

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Net Investment in Leases, Net (Details 2) - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
Capital Leases, Net Investment in Direct Financing Leases [Abstract]
Lease receivable	$ 46,593	$ 52,021
Unguaranteed residual value of flight equipment	82,207	100,068
Net investment leases	128,800	152,089
Allowance for credit losses	(3,296)	(1,764)
Net investment in leases, net	125,504	$ 150,325
Receivable in Remainder of Fiscal Year	2,824
Receivable in Year Two	11,343
Receivable in Year Three	9,364
Receivable in Year Four	8,233
Receivable in Year Five	8,370
Thereafter	15,454
Total	55,588
Present value of lease payments - lease receivable	(46,593)
Difference between undiscounted lease payments and lease receivable	$ 8,995

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Net Investment in Leases, Net - Credit Loss Rollforward (Details) $ in Thousands	9 Months Ended
	Nov. 30, 2022 USD ($)
Net Investment in Lease, Allowance for Credit Loss [Roll Forward]
Balance at February 28, 2022	$ 1,764
Provision for credit losses	1,543
Write-offs	(11)
Balance at November 30, 2022	$ 3,296

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Risks and Uncertainties (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2022 USD ($) aircraft Lessee	Nov. 30, 2021 USD ($) Lessee	Nov. 30, 2022 USD ($) aircraft Lessee	Nov. 30, 2021 USD ($) Lessee	Feb. 28, 2022 USD ($) aircraft Lessee	Jan. 06, 2023 aircraft
Concentration Risk [Line Items]
Property Subject To Or Available for Operating Lease, Number of Units1	241		241		251
Percentage of geographic concentration	100.00%	100.00%	100.00%	100.00%	100.00%
Number of Offlease Aircraft Marketed for Lease or Sale					11
Number of Offlease Aircraft Marketed for Lease	13		13
Revenue from Contract with Customer, Excluding Assessed Tax | $	$ 257,516	$ 191,480	$ 606,659	$ 514,942
Maintenance revenue | $	56,574	33,510	103,787	81,204
Gain on sale of flight equipment | $	$ 53,473	$ 7,420	$ 67,209	$ 17,944
Asia Pacific [Member]
Concentration Risk [Line Items]
Property Subject To Or Available for Operating Lease, Number of Units1	64		64		71
Europe [Member]
Concentration Risk [Line Items]
Property Subject To Or Available for Operating Lease, Number of Units1	90		90		98
Middle East and Africa [Member]
Concentration Risk [Line Items]
Property Subject To Or Available for Operating Lease, Number of Units1	9		9		10
North America [Member]
Concentration Risk [Line Items]
Property Subject To Or Available for Operating Lease, Number of Units1	37		37		36
South America [Member]
Concentration Risk [Line Items]
Property Subject To Or Available for Operating Lease, Number of Units1	28		28		25
INDIA
Concentration Risk [Line Items]
Net Investment in Lease and Net Book Value of Equipment held for Lease | $	$ 0		$ 0		$ 670,523
property subject to or available for operating lease, net (percentage)			0.00%		10.00%
number of lessees | Lessee			0		3
UNITED STATES
Concentration Risk [Line Items]
Maintenance revenue | $	13,700		$ 13,900
Gain on sale of flight equipment | $	$ 47,000		$ 54,800
Geographic Concentration Risk [Member] | Net Book Value | Off Lease
Concentration Risk [Line Items]
Percentage of geographic concentration			5.00%		4.00%
Geographic Concentration Risk [Member] | Net Book Value | Asia Pacific [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration			28.00%		32.00%
Geographic Concentration Risk [Member] | Net Book Value | Europe [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration			30.00%		30.00%
Geographic Concentration Risk [Member] | Net Book Value | Middle East and Africa [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration			3.00%		4.00%
Geographic Concentration Risk [Member] | Net Book Value | North America [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration			20.00%		17.00%
Geographic Concentration Risk [Member] | Net Book Value | South America [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration			14.00%		13.00%
Geographic Concentration Risk [Member] | Lease Rental Revenue | Asia Pacific [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration	31.00%	27.00%	33.00%	31.00%
Geographic Concentration Risk [Member] | Lease Rental Revenue | Europe [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration	30.00%	31.00%	29.00%	34.00%
Geographic Concentration Risk [Member] | Lease Rental Revenue | Middle East and Africa [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration	5.00%	5.00%	5.00%	5.00%
Geographic Concentration Risk [Member] | Lease Rental Revenue | North America [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration	21.00%	15.00%	19.00%	15.00%
Geographic Concentration Risk [Member] | Lease Rental Revenue | South America [Member]
Concentration Risk [Line Items]
Percentage of geographic concentration	13.00%	22.00%	14.00%	15.00%
Geographic Concentration Risk [Member] | Total Revenue [Member] | UNITED STATES
Concentration Risk [Line Items]
Percentage of geographic concentration	29.00%		18.00%
Major Customer Group One [Member]
Concentration Risk [Line Items]
Concentration Risk, Number of Customers in Major Customer Group | Lessee	4	4	4	5
Major Customer Group One [Member] | Geographic Concentration Risk | Lease Rental Revenue
Concentration Risk [Line Items]
Percentage of geographic concentration	25.00%	34.00%	27.00%	34.00%
Wide-body [Member] | Subsequent Event [Member]
Concentration Risk [Line Items]
Number of Offlease Aircraft Marketed for Lease or Sale						3
Wide-body [Member] | Number of Off-lease Aircraft Marketed for Lease or Sale from Prior Year [Member] | Subsequent Event [Member]
Concentration Risk [Line Items]
Number of Offlease Aircraft Marketed for Lease or Sale						1
Narrow-body [Member] | Subsequent Event [Member]
Concentration Risk [Line Items]
Number of Offlease Aircraft Marketed for Lease or Sale						3
Freighter | UNITED KINGDOM | Maintenance revenue
Concentration Risk [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax | $			$ 18,100

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Unconsolidated Equity Method Investment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Feb. 28, 2022 USD ($)
Unconsolidated equity method investment	$ 40,097		$ 40,097			$ 38,317
Earnings of unconsolidated equity method investment, net of tax	603	$ 465	1,780	$ 1,210
Borrowings from unsecured financings, net	$ 3,842,816		$ 3,842,816			$ 3,835,841
Mizuho Leasing (2021) Unsecured Loan Facility (JV) | Unsecured Debt | Corporate Joint Venture
Borrowings from unsecured financings, net					$ 1,500
Equity Method Investee
Total number of aircraft owned by joint ventures | aircraft	9		9
Net Investment in Lease and Net Book Value of Equipment held for Lease	$ 288,600		$ 288,600

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Borrowings from Secured and Unsecured Debt Financings (Details) $ in Thousands	9 Months Ended
	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)	Feb. 28, 2022 USD ($)
Outstanding amounts of secured and unsecured term debt financings
Borrowings from secured financings	$ 656,032		$ 684,039
Number of Aircraft Financed | aircraft	32
Borrowings from unsecured financings, net	$ 3,842,816		3,835,841
Total secured and unsecured debt financings	4,498,848		4,519,880
Payment for Debt Extinguishment or Debt Prepayment Cost	291	$ 13,372
Line of Credit | Revolving Credit Facility
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	20,000		20,000
ECA Term Financings | Notes Payable, Other Payables
Outstanding amounts of secured and unsecured term debt financings
Borrowings from secured financings	$ 0		21,576
Interest rate	0.00%
Payment for Debt Extinguishment or Debt Prepayment Cost	$ 500
ECA Term Financings | Secured Debt
Outstanding amounts of secured and unsecured term debt financings
Number of Aircraft Financed | aircraft	0
Bank Financings | Notes Payable, Other Payables
Outstanding amounts of secured and unsecured term debt financings
Debt, Weighted Average Interest Rate	4.02%
Bank Financings | Notes Payable to Banks
Outstanding amounts of secured and unsecured term debt financings
Borrowings from secured financings	$ 664,091		666,258
Bank Financings | Notes Payable to Banks | Minimum
Outstanding amounts of secured and unsecured term debt financings
Interest rate	2.36%
Bank Financings | Notes Payable to Banks | Maximum
Outstanding amounts of secured and unsecured term debt financings
Interest rate	5.69%
Bank Financings | Secured Debt
Outstanding amounts of secured and unsecured term debt financings
Number of Aircraft Financed | aircraft	32
Secured Debt
Outstanding amounts of secured and unsecured term debt financings
Debt Issuance Cost	$ (8,059)		(3,795)
Senior Notes Due 2023 | Senior Notes | 5.00
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 500,000		500,000
Interest rate	5.00%
Senior Notes Due 2023 | Senior Notes | 4.40%
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 650,000		650,000
Interest rate	4.40%
Senior Notes Due 2024 | Senior Notes
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 500,000		500,000
Senior Notes Due 2024 | Senior Notes | 4.125
Outstanding amounts of secured and unsecured term debt financings
Interest rate	4.125%
Senior Notes Due 2025 [Member] | Senior Notes
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 650,000		650,000
Senior Notes Due 2025 [Member] | Senior Notes | 5.25%
Outstanding amounts of secured and unsecured term debt financings
Interest rate	5.25%
Senior Notes Due 2026 [Member] | Senior Notes
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 650,000		650,000
Senior Notes Due 2026 [Member] | Senior Notes | 4.25%
Outstanding amounts of secured and unsecured term debt financings
Interest rate	4.25%
Senior Notes Due 2028 | Senior Notes
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 750,000		750,000
Senior Notes Due 2028 | Senior Notes | 2.85%
Outstanding amounts of secured and unsecured term debt financings
Interest rate	2.85%
Floating Rate Term Loan | Notes Payable to Banks
Outstanding amounts of secured and unsecured term debt financings
Interest rate	4.84%
Floating Rate Term Loan | Floating Rate Term Loan
Outstanding amounts of secured and unsecured term debt financings
Borrowings from unsecured financings, net	$ 155,000		155,000
Floating Rate Term Loan | Revolving Credit Facility
Outstanding amounts of secured and unsecured term debt financings
Interest rate	4.78%
Unsecured Debt
Outstanding amounts of secured and unsecured term debt financings
Debt Issuance Cost	$ (32,184)		$ (39,159)

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Borrowings from Secured and Unsecured Debt Financings (Details) $ in Thousands	Nov. 21, 2022 USD ($) aircraft	Sep. 08, 2022 USD ($) numberOfRevolvingCreditFacilities	Jul. 30, 2022 USD ($)	Jun. 27, 2022 USD ($)	Nov. 30, 2022 USD ($)	Sep. 07, 2022 USD ($)	May 24, 2022 USD ($) numberOfRevolvingCreditFacilities	Feb. 28, 2022 USD ($)
Debt Instrument [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity					$ 1,400,000
Borrowings from unsecured financings, net					3,842,816			$ 3,835,841
Borrowings from secured financings, net					656,032			684,039
2022 Secured Facility | Secured Debt
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	1.1 billion
Maximum number of aircraft secured by debt instrument | aircraft	17
Debt Instrument, Face Amount	$ 450,000
Borrowings from secured financings, net					0
2022 Secured Facility | Secured Debt | Maximum
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	75
2022 Secured Facility | Secured Debt | Minimum
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	70
2022 Secured Facility | Secured Debt | EBITDA Ratio
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	2.0
2022 Secured Facility | Secured Debt | Consolidated Interest Expense Paid in Cash, Ratio
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	1.0
2022 Secured Facility | Secured Debt | Minimum
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	three
2022 Secured Facility | Secured Debt | Maximum
Debt Instrument [Line Items]
Debt Instrument, Covenant Description	six
2022 Secured Facility | Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.35%
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Borrowings from unsecured financings, net					20,000			$ 20,000
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Line of Credit Facility Previous Borrowing Capacity							$ 230,000
Line of Credit Facility, Current Borrowing Capacity					280,000
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit | Tranche B (Revised) ($35mm) - DBS Revolving Credit Facility
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity					35,000
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit | Tranche C ($245mm) - DBS Revolving Credit Facility
Debt Instrument [Line Items]
Line of Credit Facility, Current Borrowing Capacity					$ 245,000
Revolving Credit Facility | 2013 Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Line of Credit Facility Previous Borrowing Capacity				$ 1,000,000		$ 900,000
Line of Credit Facility, Current Borrowing Capacity		$ 1,000,000
Repayments of Lines of Credit				$ 100,000
Revolving Credit Facility | 2013 Revolving Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate		1.625%
Revolving Credit Facility | 2013 Revolving Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Individual Debt Instrument at Time of Issuance Part of Overall Portfolio of Revolving Credit Facilities | numberOfRevolvingCreditFacilities		1
Revolving Credit Facility | Mizuho Bank Ltd. (2020) Unsecured Revolving Credit Facility [Member] | Line of Credit
Debt Instrument [Line Items]
Repayments of Lines of Credit			$ 50,000
Line of Credit | DBS (2018) Unsecured Revolving Credit Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Individual Debt Instrument at Time of Issuance Part of Overall Portfolio of Revolving Credit Facilities | numberOfRevolvingCreditFacilities							1

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Shareholders’ Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Aug. 31, 2022	Aug. 31, 2021
Equity [Abstract]
Dividends, Preferred Stock	$ 10,500	$ 10,500	$ 5,658

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Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Marubeni Service Agreement
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 1,300	$ 1,000	$ 3,900	$ 2,900
Marubeni Affiliate Parts Management Services and Supply Agreement
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 400	$ 2,700	$ 3,700	$ 4,600

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Sources of income from continuing operations before income taxes
U.S. operations	$ 5,868	$ 6,218	$ 15,994	$ 14,408
Non-U.S. operations	66,704	(45,586)	53,651	(55,098)
Income from continuing operations before income taxes and earnings of unconsolidated equity method investments	$ 72,572	$ (39,368)	$ 69,645	$ (40,690)

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Income Taxes Income Taxes (Textual) (Details)	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Income Tax Disclosure [Abstract]
Effective Income Tax Rate, Continuing Operations	31.80%	(59.70%)	32.10%	(56.20%)

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Interest, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Interest Income (Expense), Net [Abstract]
Interest on borrowings and other liabilities	$ 49,436	$ 47,152	$ 145,069	$ 153,287
Amortization of deferred financing costs	3,517	4,099	10,612	12,483
Interest expense	52,953	51,251	155,681	165,770
Less: Interest income	(1,394)	(448)	(2,401)	(1,160)
Less: Capitalized interest	(802)	(288)	(1,642)	(645)
Interest, net	$ 50,757	$ 50,515	$ 151,638	$ 163,965

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Commitments and Contingencies (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)	Nov. 30, 2022 USD ($) aircraft	Nov. 30, 2021 USD ($)
Types of Commercial Aircraft [Line Items]
Rent expense	$ 500	$ 400	$ 1,400	$ 1,200
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2023 (Remainder of fiscal year)	485		485
2024	2,243		2,243
2025	2,882		2,882
2026	2,731		2,731
2027	2,671		2,671
Thereafter	19,543		19,543
Total	$ 30,555		$ 30,555
Committed to acquire aircraft | aircraft	23		23
Purchase Obligation, Fiscal Year Maturity [Abstract]
2023 (Remainder of fiscal year)	$ 483,357		$ 483,357
2024	179,037		179,037
2025	195,380		195,380
2026	0		0
2027	0		0
Thereafter	0		0
Total	857,774		857,774
Pre-Delivery Payments
Purchase Obligation, Fiscal Year Maturity [Abstract]
Total	$ 46,200		$ 46,200

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Other Assets (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
Principal components of other assets
Deferred income tax asset	$ 380	$ 570
Lease incentives and lease premiums, net of amortization of $84,729 and $81,553, respectively	57,476	53,513
Flight equipment held for sale	33,588	77,636
Aircraft purchase deposits and Embraer E-2 progress payments	63,123	56,157
Right-of-use asset	16,959	7,176
Deferred rent receivable	47,079	55,478
Other assets	110,373	105,796
Total other assets	328,978	356,326
Lease Incentives and Lease Premiums, Accumulated Amortization	$ 84,729	$ 81,553

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Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Feb. 28, 2022
Payables and Accruals [Abstract]
Accounts payable, accrued expenses and other liabilities	$ 59,491	$ 58,882
Deferred income tax liability	79,161	66,123
Accrued interest payable	46,328	42,013
Lease liability	19,597	9,846
Lease discounts, net of amortization of $45,237 and $45,546, respectively	3,696	560
Total accounts payable, accrued expenses and other liabilities	208,273	177,424
Deferred Lease Income, Accumulated Amortization	$ 45,237	$ 45,546