7 unchanged sentences
Aircastle acquires, leases, and sells commercial jet aircraft to airlines throughout the world.
−Removed: As of December 31, 2019 , we owned and managed on behalf of our joint venture 287 aircraft leased to 85 lessees located in 49 countries.
+Added: As of February 28, 2021, we owned and managed on behalf of our joint venture 261 aircraft leased to 75 lessees located in 43 countries.
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.
−Removed: In many cases, however, we are obligated to pay a portion of specified maintenance or modification costs.
−Removed: As of December 31, 2019 , the net book value of our flight equipment (including flight equipment held for lease and net investment in direct financing and sales-type leases, or “net book value”) was $7.79 billion compared to $7.40 billion at the end of 2018 .
−Removed: Our revenues and net income for the year ended December 31, 2019 were $917.9 million and $156.6 million , respectively, and for the fourth quarter of 2019 were $243.7 million and $47.3 million , respectively.
−Removed: Growth in commercial air traffic is broadly correlated with world economic activity.
−Removed: In recent years, commercial air traffic growth has expanded at a rate 1.5 to 2 times that of global GDP growth.
−Removed: The expansion of air travel has driven a rise in the world aircraft fleet.
−Removed: There are currently approximately 22,000 commercial mainline passenger and freighter aircraft in operation worldwide.
−Removed: This fleet is expected to continue expanding at a three to four percent average annual rate over the next twenty years.
+Added: However, in many cases we are obligated to pay a specified portion of maintenance or modification costs.
+Added: As of February 28, 2021, the net book value of our flight equipment (including flight equipment held for lease and net investment in direct financing and sales-type leases, or “net book value”) was $6.69 compared to $7.79 billion at the end of 2019.
+Added: Our revenues, net income (loss) and Adjusted EBITDA were $832.3 million, $(333.2) million, and $774.4 million for the year ended February 28, 2021, and were $917.9 million, $156.6 million and $862.2 million for the year ended December 31, 2019.
+Added: On March 27, 2020, the Company successfully completed its merger (the “Merger”) and is now controlled by affiliates of Marubeni Corporation and Mizuho Leasing Company, Limited (“Mizuho Leasing”).
+Added: The Merger has not resulted in any change of the Company’s business strategy, and we believe the Company will benefit by having stable investors with a long-term investment horizon.
+Added: We also may benefit by being affiliated with Mizuho Leasing, part of the Mizuho Financial Group, one of the largest Japanese financial institutions.
+Added: As previously disclosed, on September 30, 2020, the Company’s Board of Directors unanimously agreed to change the Company’s fiscal year end to the twelve-month period ended the last day in February.
+Added: This change better aligns the Company’s financial reporting period with the financial reporting cycle of its shareholders, Marubeni Corporation and Mizuho Leasing.
+Added: Historically, growth in commercial air traffic has been correlated with world economic activity.
+Added: Prior to the COVID-19 pandemic, in recent years commercial air traffic growth expanded at a rate 1.3 to 2 times that of global GDP growth.
+Added: The expansion of air travel has driven the growth in the world aircraft fleet;
+Added: there are approximately 24,000 commercial mainline passenger and freighter aircraft in the world fleet today.
Aircraft leasing companies own approximately 47% of the world’s commercial jet aircraft.
−Removed: 2019 showed sustained growth in air traffic.
−Removed: According to the International Air Transport Association, during 2019 , global passenger traffic increased 4.2% compared to the same period in 2018 .
−Removed: Demand for air travel varies by region.
−Removed: Emerging market economies have generally been experiencing greater increases in air traffic, driven by rising levels of per capita income leading to an increased propensity to fly.
−Removed: Mature markets, such as North America and Western Europe, have been growing more slowly in tandem with their economies.
−Removed: Air traffic growth is also being driven by the proliferation of low cost carriers, which have stimulated demand through lower prices.
−Removed: The outlook for airlines operating in areas with political instability or weakening economies is more uncertain.
−Removed: On balance, we believe air travel will increase over time and, as a result, we expect demand for modern aircraft will continue to remain strong over the long-term.
−Removed: Notwithstanding the sector’s long-term growth, the aviation market is subject to economic variability due to changes in macroeconomic variables, such as interest rates, fuel price levels and foreign exchange rates.
−Removed: The aviation industry is also susceptible to external shocks, such as regional conflicts, epidemics and terrorist events.
−Removed: Mitigating this risk is the portability of the assets, allowing aircraft to be redeployed to locations where there is demand.
−Removed: Fuel prices and interest rates have had a substantial effect on our industry.
−Removed: After dropping to a low of $36 per barrel in December 2015, the price of fuel averaged $61 per barrel during 2019.
−Removed: The prolonged low interest rate environment and the strong overall performance of the aircraft financing sector attracted significant new capital, increasing competition for new investments and putting pressure on margins and returns.
−Removed: Interest rates have risen in the U.S., though current Federal Reserve guidance suggesting rate hikes in the Federal Funds rate are unlikely in the near term.
−Removed: Capital availability for aircraft has varied over time, and we consider this variability to be a basic characteristic of our industry.
−Removed: If pursued properly, this variability represents an important investment opportunity.
−Removed: debt capital market conditions benefit borrowers by permitting access to financing at historic lows.
−Removed: Commercial bank debt also continues to play a critical role for aircraft finance.
−Removed: Export credit agency availability, however, has been curtailed in recent years due to political issues, both in the U.S.
−Removed: and in Europe.
−Removed: While financial market conditions remain attractive, geopolitical issues may increase capital costs and limit availability going forward.
−Removed: We believe capital market developments should generate attractive additional investment and trading opportunities from which we can benefit given our access to different financing sources, our limited capital commitments and our reputation as a reliable trading partner.
−Removed: Our investment grade credit ratings from Moody’s, Standard & Poor’s and Fitch have allowed us to reduce our borrowing costs for our two most recent bond deals and will enable us to more reliably access debt capital throughout the business cycle.
−Removed: Our business approach is differentiated from those of other large leasing companies.
−Removed: Our investment strategy is to seek out the best risk-adjusted return opportunities across the commercial jet market, so the volume and types of assets we buy will vary over time with market conditions.
−Removed: We plan to grow our business and profits over the long-term while maintaining a conservative, flexible capital structure.
−Removed: We prefer to have capital resources available to capture investment opportunities that arise in the context of changing market circumstances.
−Removed: As such, we limit large, long-term capital commitments and are less reliant on orders for new aircraft from aircraft manufacturers as a source of new investments than many of our competitors.
−Removed: On November 5, 2019, Aircastle entered into an Agreement and Plan of Merger (the “Merger Agreement”), with MM Air Limited, a Bermuda exempted company (“Parent”), and MM Air Merger Sub Limited, a Bermuda exempted company and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, among other things, Merger Sub will merge with and into the Company, with Aircastle surviving as a wholly owned subsidiary of Parent (the “Merger”).
−Removed: Parent and Merger Sub are newly-formed entities controlled by affiliates of Marubeni and Mizuho Leasing.
−Removed: Pursuant to the Merger Agreement, subject to certain conditions set forth therein, at the effective time of the Merger (the “Effective Time”), each issued and outstanding common share, par value $0.01 per share, of the Company (the “Common Shares”) (other than (i) shares to be canceled or converted into shares of the surviving company pursuant to the Merger Agreement and (ii) restricted shares to be canceled and exchanged pursuant to the Merger Agreement), shall be converted into the right to receive $32.00 in cash, without interest (the “Merger Consideration”).
−Removed: Consummation of the Merger is subject to the satisfaction of certain remaining customary closing conditions, including, without limitation, (i) approval of the Merger Agreement and the transactions contemplated thereby by the affirmative votes of a majority of the votes cast by holders of outstanding Common Shares at a meeting of the Company’s shareholders;
−Removed: (ii) the receipt of any applicable pre-clearance or similar approval of certain remaining specified jurisdictions (i.e., Chile, Mexico and Morocco), and all required regulatory approvals being in full force and effect;
−Removed: (iii) the absence of any law, judgment or other legal restraint that prevents, makes illegal or prohibits the consummation of the Merger and the other transactions contemplated by the Merger Agreement;
−Removed: (iv) the accuracy of each party’s representations and warranties (subject to certain qualifications);
−Removed: (v) each party’s performance in all material respects of its obligations contained in the Merger Agreement;
−Removed: and (vi) the absence of a material adverse effect on the Company since the date of the Merger Agreement.
−Removed: The Merger Agreement includes customary representations, warranties and covenants of Aircastle, Parent, and Merger Sub.
−Removed: Among other things, Aircastle has agreed to customary covenants regarding the operation of the business of Aircastle and its subsidiaries prior to the closing.
−Removed: Aircastle is permitted to pay regular quarterly dividends up to $0.32 per common share pursuant to the Merger Agreement.
−Removed: The Company currently anticipates that the Merger will close in the first half of calendar year 2020, subject to the satisfaction of the remaining customary closing conditions.
+Added: Under normal circumstances, we would expect the global fleet to continue expanding at a two to four percent average annual rate.
+Added: The COVID-19 crisis has had an unprecedented negative impact on the global economy, and in particular on the aviation sector.
+Added: As a result of COVID-19, there has been a dramatic slowdown in air traffic, with some markets in near complete shutdown.
+Added: While there have been some limited improvements in certain markets recently, according to IATA, as of February 2021, air travel was still down to approximately 30% of normal levels and a full recovery to pre-pandemic levels is not expected for several years.
+Added: IATA estimates this situation will cost the airline industry over $510 billion of lost revenue, a number which may be revised upwards.
+Added: Substantially all of the world’s airlines are experiencing financial difficulties and liquidity challenges, including many of our customers.
+Added: According to IATA, total net losses for the airline industry will reach $126 billion in 2020 and $48 billion in 2021.
+Added: This could affect our lessees’ ability to fulfill their lease payment obligations to us.
+Added: While we believe long-term demand for air travel will return to historical trends over time, the near-term impacts of the COVID-19 economic shock are material;
+Added: the extent and duration of those impacts cannot currently be determined.
+Added: Airlines have been seeking to preserve liquidity by obtaining support from their respective governments, raising debt and equity, delaying or canceling new aircraft orders, furloughing employees, and requesting concessions from lessors.
+Added: Some have sought judicial protection.
+Added: We have agreed to defer lease payments with numerous airline customers,
+Added: which they are obligated to repay over time.
+Added: As of April 15, 2021, we have agreed to defer $108.4 million in near-term lease payments of which $87.4 million are included in Accounts receivable or Other assets as of February 28, 2021.
+Added: This represents approximately 17% of Lease rental and Direct financing and sales-type lease revenues for the twelve months ended February 28, 2021.
+Added: These deferrals have been agreed to with 26 airlines, representing 35% of our customers, for an average deferral of five months of lease rentals.
+Added: In a number of situations, we have agreed to broader restructurings of contractual terms, for example obtaining term extensions, better security packages or other valuable considerations in exchange for short-term economic concessions.
+Added: If air traffic continues to remain depressed over an extended period and if our customers are unable to obtain sufficient funds from private, governmental or other sources, we may need to grant additional deferrals to some of our customers or extend the period of repayment for deferrals we have already made.
+Added: We may ultimately not be able to collect all the amounts we have deferred.
+Added: As of April 15, 2021, seven of our customers are subject to judicial insolvency proceedings or similar protection.
+Added: We lease 23 aircraft to these customers, which comprise 14% of our net book value of flight equipment (including Flight equipment held for lease and Net investment in leases, or “net book value”) and 12% of our Lease rental and direct financing and sales-type lease revenue as of and for the year ended February 28, 2021.
+Added: One of these customers is LATAM, our second largest customer, which represents 8% of our net book value of flight equipment and 6% of our Lease rental revenue as of and for the year ended February 28, 2021.
+Added: Based on historic experience, the judicial process can take up to twelve to eighteen months to be resolved.
+Added: We are actively engaged in these judicial proceedings to protect our economic interests.
+Added: However, the outcome of these proceedings is uncertain and could result in these customers grounding our aircraft, negotiating reductions in aircraft lease rentals, rejecting their leases or taking other actions that could adversely impact us or the value of our aircraft.
+Added: As a result of these proceedings, the recognition of lease rental revenue for certain customers may be done on a cash basis of accounting rather than the accrual method depending on the customers’ lease security arrangements.
+Added: 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 the COVID-19 crisis.
+Added: 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 and low fuel prices.
+Added: In addition, we believe that we have sufficient liquidity to meet our contractual obligations over the next twelve months and as of April 1, 2021, total liquidity of $2.32 billion includes $1.25 billion of undrawn credit facilities, $609 million of unrestricted cash, $123 million of contracted asset sales and $340 million of projected operating cash flows through April 1, 2022.
+Added: As of February 28, 2021, we have commitments to acquire 25 aircraft for $825.1 million, excluding manufacturer credits, between 2021-2025.
+Added: We also believe our platform and personnel position us to effectively manage through the COVID-19 crisis and will enable us to take advantage of new investment opportunities when they arise.
+Added: Our Company employs a team of experienced senior professionals with extensive industry and financial experience.
+Added: Our leadership team members have an average of more than twenty years of relevant industry experience, including managing through prior downturns in the aviation industry, like the 2008 global financial crisis and the September 11, 2001 terror attacks.
Competitive Strengths
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We have a portfolio of modern aircraft that is diversified with respect to lessees, geographic markets, lease maturities and aircraft types.
−Removed: As of December 31, 2019 , our owned and managed aircraft portfolio consisted of 287 aircraft, comprised of a variety of aircraft types leased to 85 lessees located in 49 countries.
+Added: As of February 28, 2021, our owned and managed aircraft portfolio consisted of 261 aircraft, of a variety of types leased to 75 lessees located in 43 countries.
Lease expirations for our owned aircraft are well dispersed, with a weighted-average remaining lease term of 4.2 years.
−Removed: This provides the company with a long-dated base of contracted revenues.
+Added: This provides us with a long-dated base of contracted revenues.
We believe our focus on portfolio diversification reduces the risks associated with individual lessee defaults and adverse geopolitical or economic issues, and results in generally predictable cash flows.
• Flexible, Disciplined Acquisition Approach and Broad Investment Sourcing Network :
−Removed: Since our formation, we have acquired 519 aircraft for $17.27 billion.
Our investment strategy is to seek out the best risk-adjusted return opportunities across the commercial jet market, so our acquisition targets vary with market opportunities.
+Added: Since our formation, we have acquired 525 aircraft for
+Added: $16.7 billion as of February 28, 2021.
We source our acquisitions through well-established relationships with airlines, other aircraft lessors, manufacturers, financial institutions and other aircraft owners.
−Removed: Since our formation in 2004, we built our aircraft portfolio through more than 168 transactions with 94 counterparties.
+Added: Since our formation in 2004, we built our aircraft portfolio through more than 169 transactions with 95 counterparties as of February 28, 2021.
• Significant Experience in Successfully Selling Aircraft Throughout Their Life Cycle :
Our team is adept at managing and executing the sale of aircraft.
−Removed: Since our formation, we have sold 241 aircraft for $5.78 billion.
+Added: Since our formation, we have sold 259 aircraft to 80 buyers for $6.1 billion as of February 28, 2021.
These sales produced net gains of $417.3 million and involved a wide range of aircraft types and buyers.
Of these aircraft, 171, or 66%, were over fourteen years old at the time of sale;
−Removed: many of these being sold on a part-out disposition basis, where the airframe and engines may be sold to various buyers.
+Added: often being sold on a part-out disposition basis, where the airframe and engines may be sold to various buyers.
We believe our competence in selling older aircraft is one of the capabilities that sets us apart from many of our competitors.
• Strong Capital Raising Track Record and Access to a Wide Range of Financing Sources:
−Removed: Aircastle is a publicly listed company, and our shares have traded on the New York Stock Exchange (“NYSE”) since 2006.
−Removed: Since our inception in late 2004, we raised $1.69 billion in equity capital from private and public investors.
−Removed: Our largest shareholder is Marubeni, with whom we maintain a strong, strategic relationship.
+Added: Since our inception in late 2004, we raised approximately $1.7 billion in equity capital from private and public investors as of February 28, 2021.
+Added: We maintain a strong, strategic relationship with Marubeni Corporation (“Marubeni”), which is one of our Controlling Shareholders (as defined below).
We also obtained $18.9 billion in debt capital from a variety of sources including the unsecured bond market, commercial banks, export credit agency-backed debt, and the aircraft securitization market.
1 unchanged sentence
• Our Capital Structure Provides Investment Flexibility:
−Removed: We have $950.0 million available from unsecured revolving credit facilities that expire in 2021 and 2022, thereby limiting our near-term financial markets exposure.
+Added: We have $1.25 billion available from unsecured revolving credit facilities that expire in 2021 and 2022, thereby limiting our near-term financial markets exposure.
Given our relatively limited future capital commitments, we have the resources to take advantage of future investment opportunities.
−Removed: Our large unencumbered asset base and our unsecured revolving lines of credit give us access to the unsecured bond market, allowing us to pursue a flexible and opportunistic investment strategy.
+Added: Our large unencumbered asset base and our unsecured revolving lines of credit give us access to the unsecured bond market, which we expect will allow us to pursue a flexible and opportunistic investment strategy over the long-term.
• Experienced Management Team with Significant Expertise:
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Business Strategy
−Removed: Aircraft owners have benefited from the low interest rate environment in recent years.
−Removed: Particularly strong conditions in the debt capital markets have provided select borrowers, including Aircastle, access to attractively priced, flexible financing.
−Removed: This provides us a competitive advantage over many airlines and lessors.
−Removed: Geopolitical and macroeconomic events may increase the cost of capital and limit its availability in the future.
−Removed: Market dislocations may also, however, provide attractive investment opportunities for Aircastle.
−Removed: We plan to grow our business and profits over the long-term while limiting long-dated capital commitments and maintaining a conservative and flexible capital structure.
+Added: Our traditional business approach is to continue to remain differentiated from those of other large leasing companies.
+Added: The global disruption that occurred as a result of the COVID-19 crisis has required enhanced focus on diligent, proactive risk monitoring while continuing to pursue our core strategies.
+Added: Our focus is to manage risk and secure liquidity while also planning to grow our business and profits over the long-term.
+Added: By limiting long-term capital commitments and maintaining a conservative and flexible capital structure as we remain in this unprecedented situation, we seek to best position ourselves for investment opportunities in future periods of recovery.
Our business strategy entails the following elements:
1 unchanged sentence
In our view, the relative values of different aircraft change over time.
−Removed: We continually evaluate investments across different aircraft models, ages, lessees and acquisition sources and re-evaluate these choices as market conditions and relative investment values change.
+Added: We evaluate investments across different aircraft models, ages, lessees and acquisition sources and re-evaluate these choices as market conditions and relative investment values change.
We believe our team’s experience with a wide range of asset types and the financing flexibility offered through unsecured debt provides us with a competitive advantage.
−Removed: We view orders from equipment manufacturers to be part of our investment opportunity set, but choose to keep our long term capital commitments limited.
−Removed: Originating investments from many different sources across the globe.
−Removed: Our strategy is to seek out worthwhile investments by leveraging our team’s wide range of contacts.
−Removed: We utilize a multi-channel approach to sourcing acquisitions and have purchased aircraft from a large number of airlines, lessors, original equipment manufacturers, lenders and other aircraft owners.
−Removed: Since our formation in 2004, we have acquired aircraft from 94 different sellers.
+Added: In response to the COVID-19 pandemic, we have intentionally limited large, long-term capital commitments and are less reliant on orders for new aircraft from aircraft manufacturers as a source of new investments than many of our competitors.
+Added: While our current posture is defensive given the macro situation, over the long-term we plan to grow our business and profits while maintaining a conservative, flexible capital structure.
• Selling assets when attractive opportunities arise.
1 unchanged sentence
We also use asset sales for portfolio management purposes, such as reducing lessee specific concentrations and lowering residual value exposures to certain aircraft types.
−Removed: Since our formation, we have sold aircraft to 73 buyers.
• Maintaining efficient access to capital from a wide set of sources and leveraging our recent investment grade credit rating.
4 unchanged sentences
We believe our investment grade rating not only reduces our borrowing costs, but also facilitates more reliable access to both unsecured and secured debt capital throughout the business cycle.
+Added: There can be no assurance, however, that we will be able to access capital on a cost-effective basis and our failure to do so could have a material adverse effect on our business, financial condition or results of operations.
• Leveraging our strategic relationships .
−Removed: We intend to capture the benefits provided through the extensive global contacts and relationships maintained by Marubeni, which is our largest shareholder and is one of the largest Japanese trading companies.
−Removed: Marubeni has enabled greater access to Japanese-based financing and helped source and develop our joint venture with Mizuho Leasing.
−Removed: See also description of Merger above.
+Added: We intend to capture the benefits provided through the extensive global contacts and relationships maintained by our shareholders, Marubeni and Mizuho Leasing, which have enabled greater access to Japanese-based financing and helped source and develop our joint venture.
• Capturing the value of our efficient operating platform and strong operating track record .
−Removed: We believe our team’s capabilities in the global aircraft leasing market places us in a favorable position to source and manage new income-generating activities.
−Removed: We intend to continue to focus our efforts in areas where we believe we have competitive advantages, including new direct investments as well as ventures with strategic business partners.
−Removed: Intending to pay quarterly dividends to our shareholders based on the Company ’ s sustainable earnings levels.
−Removed: Aircastle has paid dividends each quarter since our initial public offering in 2006.
−Removed: On October 28, 2019 , our Board of Directors declared a regular quarterly dividend of $0.32 per common share, or an aggregate of $23.9 million for the three months ended December 31, 2019 , which was paid on December 13, 2019 to holders of record on November 29, 2019 .
−Removed: These dividend amounts may not be indicative of any future dividends.
−Removed: Our ability to pay quarterly dividends will depend upon many factors, including those as described in Item 1A.
−Removed: “Risk Factors” and elsewhere in this Annual Report.
−Removed: Declaration Date
−Removed: Dividend per Common Share
−Removed: October 28, 2019
−Removed: November 29, 2019
−Removed: December 13, 2019
−Removed: August 2, 2019
−Removed: August 30, 2019
−Removed: September 16, 2019
−Removed: April 30, 2019
−Removed: June 14, 2019
−Removed: February 8, 2019
−Removed: February 28, 2019
−Removed: March 15, 2019
−Removed: October 30, 2018
−Removed: November 30, 2018
−Removed: December 14, 2018
−Removed: August 3, 2018
−Removed: August 31, 2018
−Removed: September 14, 2018
−Removed: June 15, 2018
−Removed: February 2, 2018
−Removed: February 28, 2018
−Removed: March 15, 2018
−Removed: October 31, 2017
−Removed: November 30, 2017
−Removed: December 15, 2017
−Removed: August 4, 2017
−Removed: August 31, 2017
−Removed: September 15, 2017
−Removed: June 15, 2017
−Removed: February 9, 2017
−Removed: February 28, 2017
−Removed: March 15, 2017
We believe our team’s capabilities in the global aircraft leasing market place us in a favorable position to explore new income-generating activities as capital becomes available for such activities.
We intend to continue to focus our efforts on investment opportunities in areas where we believe we have competitive advantages and on transactions that offer attractive risk/return profiles.
−Removed: There can be no assurance, however, that we will be able to access capital on a cost-effective basis and a failure to do so could have a material adverse effect on our business, financial condition or results of operations.
Acquisitions and Sales
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We may choose to 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.
−Removed: 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.
+Added: Our ability to execute our business strategy, particularly the acquisition of additional commercial jet aircraft
+Added: 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Secured Debt Financings” and “ — Unsecured Debt Financings” under Item 7.
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Typically, the lessee agrees to lease an aircraft for a fixed term, although certain of our leases allow the lessee the option to extend the lease for an additional term or, in rare cases, terminate the lease prior to its expiration.
−Removed: As a percentage of lease rental revenue for the year ended December 31, 2019 , our two largest customers, IndiGo and Lion Air, accounted for 9% and 6%, respectively.
−Removed: The scheduled maturities of our aircraft leases by aircraft type grouping currently are as follows, taking into account sales, sale agreements, lease placements and renewal commitments as of February 10, 2020 :
−Removed: Off-Lease (1)
−Removed: Sold or Sale Agreement
+Added: The scheduled maturities of our aircraft leases by aircraft type grouping currently are as follows, taking into account sales, sale agreements, lease placements and renewal commitments as of April 15, 2021, by fiscal year:
+Added: Aircraft Type 2021 2022 2023 2024 2025 2026 2027 2028 2029 2032 Off-Lease (1)
+Added: Sold or Sale Agreement Total
A319/A320/A320neo/A321 8 11 28 39 20 8 2 7 7 2 6 15 153
+Added: A330-200/300 — 1 1 — 4 — 4 3 — — 3 — 16
737-700/800/900ER 2 9 12 15 7 6 7 4 4 — 2 1 69
+Added: 777-300ER — — — — 2 3 — — — — — — 5
+Added: E195 — — — 3 — — — 1 — — — — 4
+Added: Freighters — — 2 — 3 — — — — — — — 5
+Added: Total 10 21 43 57 36 17 13 15 11 2 11 16 252
______________
−Removed: Consisted of one Boeing 737-800 aircraft which we are marketing for lease or sale.
−Removed: 2020 Lease Expirations and Lease Placements
−Removed: We began 2020 with 32 aircraft having scheduled lease expirations in 2020 and three off-lease aircraft.
−Removed: As of February 10, 2020 , we have agreements to lease or extend thirteen of these aircraft and to sell nine others.
−Removed: Of the remaining thirteen aircraft, which account for 3.9% of our net book value at December 31, 2019 , we expect that six aircraft will be sold at lease end, with the remaining seven aircraft still to be placed.
−Removed: 2021-2024 Lease Expirations and Lease Placements
−Removed: Taking into account lease and sale commitments, we currently have the following number of aircraft with lease expirations scheduled in the period 2021-2024, representing the percentage of our net book value at December 31, 2019 , specified below:
+Added: (1) Consisted of four A320-200 aircraft, two Airbus A321-200 aircraft, three Airbus A330-200 aircraft and two Boeing 737-800 aircraft which we are marketing for lease or sale.
+Added: Fiscal Year 2021 Lease Expirations and Lease Placements
+Added: As of April 15, 2021, we have eleven off-lease aircraft and ten aircraft with leases expiring in fiscal 2021, which combined account for 8% of our net book value at February 28, 2021, still to be placed or sold.
+Added: Fiscal Year 2022-2025 Lease Expirations and Lease Placements
+Added: Taking into account lease and sale commitments, we currently have the following number of aircraft with lease expirations scheduled in fiscal years 2022-2025, representing the percentage of our net book value at February 28, 2021, specified below:
21 aircraft, representing 6%;
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Each of our leases requires the lessee to pay periodic rentals during the lease term.
−Removed: As of December 31, 2019 , rentals on more than 93% of our leases, as a percentage of net book value, are fixed and do not vary according to changes in interest rates.
+Added: As of February 28, 2021, rentals on more than 97% of our leases, as a percentage of net book value, are fixed and do not
+Added: vary according to changes in interest rates.
For the remaining leases, rentals are payable on a floating interest-rate basis.
8 unchanged sentences
Many of our leases also contain provisions requiring us to pay a portion of the cost of modifications to the aircraft performed by the lessee at its expense if such modifications are mandated by recognized airworthiness authorities.
−Removed: these provisions would set a threshold, below which the lessee would not have a right to seek reimbursement and above which we may be required to pay a portion of the cost incurred by the lessee.
+Added: Typically, these provisions would set a threshold, below which the lessee would not have a right to seek reimbursement and above which we may be required to pay a portion of the cost incurred by the lessee.
The lessees are obliged to remove liens on the aircraft other than liens permitted under the leases.
14 unchanged sentences
Our aircraft re-leasing strategy is to develop opportunities proactively, well in advance of scheduled lease expiration, to enable consideration of a broad set of alternatives, including deployment, sale or part-out, and to allow for reconfiguration or maintenance lead times where needed.
−Removed: We also take a proactive approach to monitoring the credit quality of our customers, and may seek early return and redeployment of aircraft if we feel that a lessee is unlikely to perform its obligations under a lease.
+Added: We also take a proactive approach to monitoring the credit quality of our customers, and may seek early return and redeployment of aircraft if we feel that a lessee is unlikely to
+Added: perform its obligations under a lease.
We have invested significant resources in developing and implementing what we consider to be state-of-the-art lease management information systems and processes to enable efficient management of aircraft in our portfolio.
6 unchanged sentences
The aircraft leasing and trading industry is highly competitive with a significant number of active participants.
−Removed: We face competition for the acquisition of aircraft, for the placement of aircraft and for the sale of aircraft which we may wish to divest.
+Added: We face competition for the acquisition, placement and ultimately for the sale of aircraft.
Competition for aircraft acquisitions comes from many sources, ranging from large established aircraft leasing companies to smaller players and new entrants.
−Removed: Competition has increased across most asset types and has drawn many new investors to our business.
+Added: Competition has increased across most asset types and there has been a number of new investors in the market.
Larger lessors are generally more focused on acquiring new aircraft via direct orders with the original equipment manufacturers and through purchase and lease-back transactions with airlines.
−Removed: These larger lessors include AerCap Holdings, GE Capital Aviation Services, Air Lease Corporation, SMBC Aviation Capital, BOC Aviation, Avolon Holdings, Aviation Capital Group and Dubai Aerospace Enterprise.
−Removed: In addition, several major Chinese financial institutions’ leasing subsidiaries are aggressively pursuing business, including Industrial and Commercial Bank of China (“ICBC”) and China Development Bank (“CDB”).
−Removed: In October 2019, Accipter and MCAP merged to create AMCK Aviation.
−Removed: In November 2019, DVB sold its aviation finance activities to MUFG Bank Ltd.
−Removed: In December 2019, GE Capital sold its PK AirFinance subsidiary to Apollo Global Management and Athene Holding.
−Removed: Tokyo Century Corporation, part of the Mizuho Group, acquired the remaining 80% interest in Aviation Capital Group it did not own in December 2019.
+Added: These larger lessors include AerCap Holdings, GE Capital Aviation Services, Air Lease Corporation, SMBC Aviation Capital, BOC Aviation, Avolon Holdings, Aviation Capital Group, Dubai Aerospace Enterprise, Industrial and Commercial Bank of China and China Development Bank.
+Added: In March 2021, AerCap and General Electric announced an agreement where AerCap would take over GE Capital Aviation Services.
Competition for mid-aged and older aircraft typically comes from other competitors that, in many cases, rely on private equity or hedge fund capital sources.
−Removed: Such competitors include Carlyle Aviation Partners, Castlelake, Alterna Capital Partners and other players funded by alternative investment funds and companies.
−Removed: These companies are typically fund-based, rather than having permanent capital structures, and have benefited from the substantially improved availability of debt financing for mid-aged aircraft.
−Removed: Competition for leasing or re-leasing of aircraft, as well as aircraft sales, is based principally upon the availability, type and condition of aircraft, user base, lease rates, prices and other lease terms.
+Added: Such competitors include Carlyle Aviation Partners, Castlelake, Merx Aviation and other players funded by alternative investment funds and companies.
+Added: These companies are typically fund-based, rather than having permanent capital structures, and have benefited from the availability of debt financing for mid-aged aircraft.
+Added: In March 2021 Carlyle Aviation Partners announced an agreement to purchase Fly Leasing Ltd.
+Added: Competition for leasing/re-leasing aircraft, as well as aircraft sales, is based principally upon the availability, type and condition of the aircraft, user base, lease rates, prices and other lease terms.
Aircraft manufacturers, leasing companies, airlines and other operators, distributors, equipment managers, financial institutions and other parties engaged in leasing, managing, marketing or remarketing aircraft compete with us, although their focus may be on different market segments and aircraft types.
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We also believe our access to unsecured debt provides us with a competitive advantage in pursuing investments quickly and reliably and in acquiring aircraft in situations where it may be more difficult to finance on a secured, non-recourse basis.
−Removed: As of December 31, 2019 , we had 111 employees.
+Added: Environmental, Social and Governance (“ESG”) and Human Capital
+Added: Our Company was formed in 2004 on the values of integrity, common decency and respect for others.
+Added: These values continue to this day and are embodied in our Code of Business Conduct and Ethics, which has been adopted by the Board
+Added: of Directors of the Company to serve as a statement of principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business.
+Added: We believe that our commitment to our Company, our employees and the communities within which we operate has led to high employee satisfaction and low employee turnover, and our commitment to our customers and business partners has resulted in high customer satisfaction, as evidenced by long-time relationships with our customers and new/repeat transactions with our business partners.
+Added: We also take environmental and social issues seriously.
+Added: We believe that our commitment to identifying and implementing positive environmental and social related business practices strengthens our Company, and better serves our customers, our communities and the broader environment within which we conduct our business.
+Added: Human Capital
+Added: As of February 28, 2021, we had 107 employees.
None of our employees are covered by a collective bargaining agreement, and we believe that we maintain excellent employee relations.
−Removed: We provide certain employee benefits, including retirement benefits, and health, life, disability and accident insurance plans.
+Added: We believe that our commitment to our employees is critical to our continued success, leading to high employee satisfaction and low employee turnover.
+Added: To facilitate talent attraction and retention, we strive to have a diverse, inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities.
+Added: Each year, we review employee career development and succession planning internally and with our Compensation Committee.
+Added: During the COVID-19 pandemic, the health and safety of our employees, customers and business partners were and are of the highest priority for us, prompting us to put a comprehensive range of protective measures in place at an early stage of the pandemic.
+Added: We have been able to successfully operate with most of our workforce working remotely.
+Added: We expect to start to transition to having our employees return to our offices over time, although we will continue to monitor trends and local government regulations and guidelines, and may adjust our return to office plans accordingly to ensure the health and safety of our employees.
+Added: Our employees share our corporate values of integrity, common decency and respect of others, values which have been established since our Company was formed.
We require our lessees to carry general third-party legal liability insurance, all-risk aircraft hull insurance (both with respect to the aircraft and with respect to each engine when not installed on our aircraft) and war-risk hull and legal liability insurance.
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Government Regulation
−Removed: The air transportation industry is highly regulated.
−Removed: In general, we are not directly subject to most air transportation regulations because we do not operate aircraft.
+Added: The air transportation industry is highly regulated, although Aircastle itself is generally not directly subject to most air transportation regulations as we do not operate aircraft.
In contrast, our lessees are subject to extensive, direct regulation under the laws of the jurisdictions in which they are registered and where they operate.
−Removed: Such laws govern, among other things, the registration, operation, security, and maintenance of our aircraft, as well as environmental and financial oversight regulation of their operations.
−Removed: Our customers may also be subject to noise or emissions regulations in the jurisdictions in which they operate our aircraft.
−Removed: European countries, in particular, have strict environmental regulations, and, in 2008 the European Union (“E.U.”) introduced the European Emissions Trading Scheme (“EU ETS”), which was extended to include carbon dioxide (“CO 2 ”) emissions from aviation in 2012.
−Removed: As a “cap and trade” mechanism, the legislation imposes the requirements of monitoring, reporting and verifying emissions on airlines, and caps CO 2 emissions for each year at a level determined by the legislation.
−Removed: Under the scheme, an airline is only permitted to release as many CO 2 emissions as the ‘carbon credits’ allocated it, with the total number of credits allocated to all airlines being equal to the cap.
−Removed: An airline may increase its allocation by purchasing credits from another airline.
−Removed: However, in 2014, the E.U.
−Removed: limited the application of the EU ETS to flights within the European Economic Area (“EEA”) and deferred any further application until 2024, pending a review of a new initiative by International Civil Aviation Organization (“ICAO”) put in place in 2016.
−Removed: In October 2016, ICAO adopted a global market-based measure to control CO 2 emissions from international aviation.
−Removed: This measure is the “Carbon Offsetting and Reduction Scheme” for International Aviation (“CORSIA”) with the aim of achieving carbon-neutral growth from 2020 onwards.
−Removed: The CORSIA pilot phase (2021-2023) and the CORSIA first phase (2024-2026) will apply only to routes between countries that have each volunteered to participate in the scheme.
−Removed: All airlines that operate routes between two volunteering countries will be subject to the offsetting requirements, which means that any such airline must buy an emissions credit that has been verified as having reduced emissions elsewhere to offset the emissions that that airline would otherwise not have caused.
−Removed: The requirement to offset emissions will be divided among airlines in proportion to their total CO 2 emissions (but not the growth of emissions of the company), which is referred to as the “sectoral” approach to emissions.
−Removed: From 2030 onwards, this sectoral approach will transition to an approach instead based on each airline’s individual rate of growth.
−Removed: From 2030-2032, 20% of offsets will be calculated according to this “individual” approach, and the remaining 80% calculated by the “sectoral” approach.
−Removed: In 2033-2035, 70% of the offset requirements will be based on the “individual” approach.
−Removed: In July 2016, the U.S.
−Removed: Environmental Protection Agency (“EPA”) determined that Greenhouse Gas (“GHG”) emissions from certain aircraft engines contribute to climate change and endangers the public’s health and the environment.
−Removed: The findings are for CO 2 , methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.
−Removed: At that time, the EPA indicated its intention to promulgate new rules to adopt GHG standards promulgated by the ICAO.
−Removed: However, in June 2017, the United States indicated that it is reviewing whether it will remain fully committed to the ICAO rules, including CORSIA.
−Removed: No firm date for conclusion of this review has been announced.
−Removed: Other environmental regulations to which our customers may be subject to include those relating to discharges to surface and subsurface waters, management of hazardous substances, oils, and waste materials, and other regulations affecting their aircraft operations.
+Added: Such laws govern, among other things, the registration, operation, security, and maintenance of our aircraft, environmental issues and the financial oversight of their operations.
+Added: Regulations regarding CO 2 emissions are changing and developing, particularly so in relation to the aviation sector, where there is an additional international angle to the regulation.
+Added: The impact of COVID-19 on the airline sector has further complicated matters.
+Added: Further regulatory changes are expected in the coming years.
+Added: Our customers may also be subject to noise regulations in the jurisdictions in which they operate our aircraft as well as other environmental regulations relating to discharges to surface and subsurface waters, management of hazardous substances, oils, and waste materials.
+Added: See “Risk Factors — Risks Related to Our Aviation Assets — The effects of emissions and noise regulations and policies may negatively affect the airline industry.
+Added: This may cause lessees to default on their lease payment obligations and may limit the market for certain aircraft in our portfolio” for more information.
Subsequent Events
−Removed: The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure since the balance sheet date of December 31, 2019 through the date of this filing, the date on which the consolidated financial statements included in this Form 10-K were issued.
+Added: The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure since the balance sheet date of February 28, 2021 through the date of this filing, the date on which the consolidated financial statements included in this Annual Report were issued.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.