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Item 9A. Controls and Procedures

2025-04-23 compared with 2024-04-25 · 325 added, 318 removed, 1182 unchanged (35% of the section changed)

9 unchanged sentences

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls

may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an assessment of the effectiveness of our internal control over financial reporting as of February 28, 2025.

12 unchanged sentences

Hacker, Naoshi Hirose, Michael J.

Inglese, Taro Kawabe, Keiji Okuno, Charles W.

Pollard and Takayuki Sakakida.

Inglese, Keiji Okuno, Charles W.

Pollard, Takayuki Sakakida and Takashi Tsunoda.

Naoshi Hirose 62

1 unchanged sentence

Takayuki Sakakida (Chairman)

Takashi Tsunoda 50

Hacker was appointed to our Board on March 27, 2020 following the consummation of the Merger and served on the prior Board of Aircastle Limited from August 2, 2006 to the consummation of the Merger.

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Hacker serves as the Co-Chair of a series of open-end investment companies that are part of the Columbia Threadneedle family of mutual funds and as an independent director and Chair of the Board of Directors of SpartanNash Company.

Naoshi Hirose was appointed to our Board as of April 8, 2024.

Currently holding the position of Managing Executive Officer and serving as the Regional CEO for the Americas, as well as the Regional COO for North & Central Americas at Marubeni, he also holds the role of President and CEO of Marubeni America Corporation.

Naoshi Hirose was appointed to our Board on April 8, 2024.

Currently holding the position of Managing Executive Officer and serving as the Regional CEO for the Americas at Marubeni, he also holds the role of President and CEO of Marubeni America Corporation.

Hirose joined Marubeni in January 2023 and from April 2023 he held the positions of Managing Executive Officer and Senior Operating Officer for CSO, in which he served as a Member of the Corporate Management Committee, exercising oversight of Marubeni group’s business operations.

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He is a Chartered Financial Analyst who holds a BS in Mechanical Engineering from Rutgers University College of Engineering and his MBA from Rutgers Graduate School of Business Management.

Taro Kawabe was appointed to our Board on March 27, 2020 following the consummation of the Merger.

Kawabe is currently an Executive Officer, Chief Operating Officer of the Finance, Leasing and Real Estate Business Division of Marubeni.

Previously, he was Senior Operating Officer of the Finance and Leasing Business Division of Marubeni from April 2019 to March 2020.

Prior to that, Mr.

Kawabe was the General Manager of the Leasing Business Department of Marubeni from April 2016 to March 2019.

Kawabe joined Marubeni in April 1990.

Kawabe received his degree from Waseda University in 1990.

Keiji Okuno was appointed to our Board as of September 26, 2022.

Keiji Okuno was appointed to our Board on September 26, 2022.

Before joining Aircastle, Mr.

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Okuno had over 15 years at ORIX Group in various roles, including Vice President, Global Business Group, Executive Vice President, and Managing Director.

Okuno received a B.A.

from Dokkyo University and a diploma from New York University.

Okuno received a BA from Dokkyo University and a diploma from New York University.

Okuno is a CPA.

5 unchanged sentences

Takayuki Sakakida was appointed to our Board on March 27, 2020 upon the consummation of the Merger and served on the prior Board of Aircastle Limited from June 9, 2017 to the consummation of the Merger, and was nominated by Marubeni.

Sakakida was appointed Chairman of our Board on April 17, 2024.

In December 2020, Mr.

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Sakakida was appointed as General Manager, Finance & Leasing Business Dept.

– II, Marubeni.

In April 2017, Mr.

Sakakida was appointed as Vice President and General Manager, Aerospace and Ship Unit, Marubeni America Corporation, which is a subsidiary of Marubeni, a general trading company, engaged as an intermediary, importer/exporter, facilitator or broker in various types of trade between and among business enterprises and countries.

- II, Marubeni Corporation.

In April 2017, Mr.

Sakakida was appointed as Assistant General Manager, Aerospace and Defense Systems Department, Marubeni.

From April 2015 to April 2016, he served as General Manager, Business Administration Section, Aerospace and Defense Systems Department of Marubeni.

Sakakida was appointed as Vice President and General Manager, Aerospace and Ship Unit, Marubeni America Corporation.

From April 2015 to April 2016, he served as General Manager, Business Administration Section, Aerospace and Defense Systems Department of Marubeni Corporation.

From April 2011 to 2015, he seconded to MD Aviation Capital Pte Ltd (Singapore) as Managing Director.

Sakakida has over 18 years of experience in the aviation industry and brings to the Board extensive experience in operations, strategic planning and financial matters relevant to the aviation industry.

He maintains high-level contacts with major manufacturers in the aviation industry as well as Asian airlines which may in the future be customers of the Company.

Sakakida has over 20 years’ experience in the aviation industry and brings to the Board extensive experience in operations, strategic planning and financial matters relevant to the aviation industry.

Takashi Tsunoda was appointed to our Board on June 7, 2024.

Tsunoda joined Marubeni in 1997 and is currently General Manager of the Asset Finance Department.

Previously, he was the President and CEO of Marubeni Capital America, a wholly-owned subsidiary of Marubeni Corporation and also served as a Board Member of Nowlake Technology LLC, a U.S.

fintech company, from April 2021 to March 2024.

Tsunoda holds an MBA in finance and accounting from Indiana University’s Kelley School of Business and a BA in Political Science from Waseda University, Tokyo.

Information about our Executive Officers .

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To help ensure that the Company abides by applicable corporate governance standards, our Board has adopted a Code of Business Conduct and Ethics and a Code of Ethics for Chief Executive and Senior Financial Officers, which are posted on our website at http://www.aircastle.com under “ESG” and which are available in print to any shareholder of the Company upon request.

Insider Trading Policies and Procedures .

We are a privately held, voluntary reporting company and there is no established public trading market for our securities.

As a result, the Company has not adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers, employees and the Company itself.

Audit Committee of the Board of Directors .

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Hacker are designated as members of the Audit Committee.

Roy Chandran, our Chief Financial Officer, is also a member of the Audit Committee.

In addition, our Board has determined that Mr.

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Christopher L.

Chief Legal Officer & Secretary

Former Chief Legal Officer & Secretary

Paul O’Callaghan Chief Operations Officer

Paul O’Callaghan, formerly, EVP, Portfolio Management, was appointed and promoted to Chief Operations Officer of the Company effective March 1, 2023.

Christopher L.

Beers, our former Chief Legal Officer & Secretary, retired from the Company effective February 28, 2025.

Pay for Performance Philosophy

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(ii) cash flow;

(iii) growth through new investments;

and (iv) discrete objectives (as described below);

and (iii) growth through new investments (as described below);

• Individual Performance :

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$ 1,720.0 50%-150% 25%

Discrete objectives (4)

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(1) Profit before tax is Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investments, plus earnings of unconsolidated equity method investments.

(1) Profit before tax is Income from continuing operations before income taxes and earnings of unconsolidated equity method investments, plus earnings of unconsolidated equity method investments.

(2) Cash flow for a period is Cash Flow from Operations plus distributions from our joint venture investment, if any.

(3) New investments measures the total annual amount invested in aviation assets.

(4) Our discrete objectives are a qualitative rating based on our performance in maintaining our investment grade ratings, managing our assets and effectiveness on placements given the market environment.

Individual Performance Goals.

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For 2024, we determined the final amount of our annual incentive compensation awards for each employee by applying the weighted corporate financial metrics and individual performance goals, and such awards were paid out to our executive officers in the form of cash.

For additional retention purposes, we also granted long term incentive awards in 2023 as part of our long term incentive award program that was introduced in 2021 – see below for further discussion of our long-term incentive award program.

For additional retention purposes, we also granted long term incentive awards in 2024 as part of our long term incentive award program – see below for further discussion of our long-term incentive award program.

Compensation Overview

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Actual Performance for 2024 Performance Year .

The Company’s financial performance reflects the continued expansion of global air traffic and strong demand for our narrow-body passenger aircraft, OEM production issues and delivery delays, as well as the improved financial health of our airline customers.

Our financial results also are partly driven by the increased demand for our aircraft through lease extension requests, end-of-lease maintenance payments, strong gains on sales and cash settlement proceeds received in respect of 4 aircraft formerly on lease to Russian airlines.

The Company’s financial performance reflects the strong global passenger demand for air travel and robust demand for our narrow-body aircraft due to ongoing OEM delivery delays and supply chain constraints.

The increased demand for our aircraft through lease extension requests and strong gains on sales contributed positively to our financial results, which are also partly driven by cash settlement proceeds received in respect of our contingent and possessed insurance policies for aircraft formerly on lease to Russian airlines.

As a result, the Book Equity IRR for the 2024 performance year was 5.3%.

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For our executive officers other than Mr.

O’Callaghan, the 2021 LTI Awards cliff-vested on February 29, 2024 and the 2022 LTI awards will cliff-vest on February 28, 2025.

For all of our executive officers, the 2023 LTI awards will cliff-vest on February 28, 2026.

O’Callaghan, the 2022 LTI Awards cliff-vested on February 28, 2025.

For all of our executive officers, the 2023 and 2024 LTI awards will cliff-vest on February 28, 2026 and 2027, respectively.

For our executive officers other than Mr.

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Performance Year Book Equity IRR % of Target Annual Award Earned

Fiscal Year 2021 Less than -3.0% 50%

Fiscal Year 2022 2.9% 128%

Fiscal Year 2023 3.9% 148%

O’Callaghan, the portion of his 2021 LTI Award payable for the 2023 performance year was earned at 120% and vested on February 29, 2024, and the portion of his 2022 LTI Award payable for the 2023 performance year was earned at 148% and vested on February 29, 2024.

Fiscal Year 2024 5.3% 150%

O’Callaghan, the portion of his 2022 LTI Award payable for the 2024 performance year was earned at 150% and vested on February 28, 2025.

Other Compensation .

Our NEOs are eligible to receive severance payments and accelerated vesting of restricted cash awards and LTI awards in certain circumstances, as described in greater detail below in the section entitled “Potential Payments upon Termination or Change in Control”.

Our NEOs are eligible to receive severance payments and accelerated vesting of LTI awards in certain circumstances, as described in greater detail below in the section entitled “Potential Payments upon Termination or Change in Control”.

Severance and change in control benefits provide transitional assistance for separated employees and are essential to recruiting and retaining talented executives in a competitive market.

In addition, our NEOs are also eligible to participate in our employee benefit plans, including medical, dental, life insurance and 401(k) plans.

In addition, our NEOs are also eligible to participate in our employee benefit plans, including medical, dental, life insurance and retirement plans.

These plans are available to all employees and do not discriminate in favor of our NEOs.

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(a) a retirement date no earlier than March 27, 2024;

(b) the executive provides at least twelve months' notice;

and (d) such individual is not an executive officer (or serving in any other senior commercial role) with certain competitors prior to the vesting date.

(b) the executive provides at least 12 months' notice;

(c) the executive is at least 55 years old on the date of retirement and (d) such individual is not an executive officer (or serving in any other senior commercial role) with certain competitors prior to the vesting date.

The primary goals of our compensation programs are to attract, motivate and retain the most talented and dedicated employees and to align incentive compensation with Company performance.

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For 2024, the Company’s performance against its corporate financial metrics resulted in an incentive compensation pool equal to 130% of the total target, as shown in the table below.

Certain financial metrics, such as profit before tax and cash flow, were impacted by the effects of the increased demand for our aircraft, end-of-lease maintenance payments, strong gains on sales and cash settlement proceeds received in respect of 4 aircraft formerly on lease to Russian airlines.

Certain financial metrics, such as profit before tax, were impacted by the effects of the increased demand for our aircraft, strong gains on sales and settlement proceeds received in respect of our contingent and possessed insurance policies for aircraft formerly on lease to Russian airlines.

(in millions) Weighting 2024 Performance (in millions) Performance Range Performance Weighted Score

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New investments $ 1,720.0 25% $ 1,637.1 50% - 150% 95% 24 %

Discrete objectives — 20% — 50% - 150% 100% 20 %

Performance versus Individual Performance Goals.

For 2023, the performance of each of our NEOs against the individual performance goals was equal to 110% of target.

For 2024, the performance of each of our NEOs against the individual performance goals was equal to 115% of target, with the exception of Mr.

Chandran whose performance was equal to 125% of target.

The Compensation Committee took the following actions related to fiscal year 2024 annual incentive compensation for our NEOs, which was determined solely based on the achievement of the corporate financial metrics and individual performance goals:

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The Compensation Committee shared these discussions with the full Board on a regular basis.

Grant Policies and Practices.

We do not currently grant equity-based awards.

As such, we do not currently have any policies or practices in place with respect to the timing of equity-based awards in relation to the disclosure of material non-public information.

COMPENSATION COMMITTEE REPORT

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Christopher L.

Beers 2023 $ 575,000 $ 704,838 $ 919,467 $ 15,540 $ 2,214,845

2024 $ 575,000 $ 715,280 $ 1,420,603 $ 67,478 $ 2,778,361

Chief Legal Officer & 2023 575,000 704,838 919,467 15,540 2,214,845

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(1) Bonus compensation consists of:

(i) cash bonuses, (ii) the portion of 2020 bonus restricted cash awards vested in 2022 and 2023, and (iii) the portion of 2019 bonus restricted cash awards vested in 2021 and 2022.

(i) cash bonuses, (ii) the portion of 2020 bonus restricted cash awards vested in 2022, 2023 and 2024, and (iii) the portion of 2019 bonus restricted cash awards vested in 2022.

(2) See Compensation Overview-Long Term Incentive Plan above for information regarding our cash-based LTI awards granted in 2024, 2023 and 2022.

Pursuant to SEC rules, amounts paid out to our NEOs with respect to our cash-based LTI awards will be reported in the “Non-Equity Incentive Plan” column of the Summary Compensation Table for the year earned, not the year in which the LTI award was originally granted.

Accordingly, the amounts reported for 2023 represents the 2021 LTI awards granted to our NEOs (other than Mr.

Accordingly, the amounts reported represents (i) for 2024, the 2022 LTI awards granted to our NEOs (other than Mr.

O’Callaghan), which vested on February 28, 2025 and (ii) for 2023, the 2021 LTI awards granted to our NEOs (other than Mr.

O’Callaghan), which vested on February 29, 2024.

2 unchanged sentences

(3) The amounts reported in this column consist of Company contributions made to each named executive officer’s retirement plan account and certain insurance premiums paid by the Company.

(4) The amount reported in the “All Other Compensation” column for Mr.

Beers also includes $50,821 of accrued vacation time paid as part of his retirement.

Beers’ Retirement Agreement” below.

(5) Paul O’Callaghan became one of the Company’s NEOs for 2023 as a result of his appointment and promotion to Chief Operations Officer effective March 1, 2023.

The amount reported in the “Non-Equity Incentive Plan” column relates to non-executive, cash-based LTI awards granted to Mr.

O’Callaghan in 2022 and 2021 prior to his appointment as Chief Operations Officer, which vested with respect to the 2023 performance year on February 29, 2024 and were paid out immediately upon vesting.

O’Callaghan in 2022 and 2021 prior to his appointment as Chief Operations Officer, which vested with respect to the 2024 and 2023 performance years on February 28, 2025 and February 29, 2024, respectively, and were paid out immediately upon vesting.

Grants of Plan-Based Awards for 2024

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Minimum ($) Target ($) Maximum ($)

Inglese May 1, 2023 February 28, 2026 $ 2,500,000 $ 1,900,418 $ 2,733,752 $ 3,567,086

Roy Chandran May 1, 2023 February 28, 2026 $ 1,000,000 $ 760,168 $ 1,093,502 $ 1,426,836

Winter May 1, 2023 February 28, 2026 $ 1,000,000 $ 760,168 $ 1,093,502 $ 1,426,836

Inglese April 17, 2024 February 28, 2027 $ 2,500,000 $ 1,935,002 $ 2,768,336 $ 3,601,670

Roy Chandran April 17, 2024 February 28, 2027 $ 1,000,000 $ 774,002 $ 1,107,336 $ 1,440,670

Winter April 17, 2024 February 28, 2027 $ 1,000,000 $ 774,002 $ 1,107,336 $ 1,440,670

Christopher L.

Beers May 1, 2023 February 28, 2026 $ 1,000,000 $ 760,168 $ 1,093,502 $ 1,426,836

Paul O’Callaghan May 1, 2023 February 28, 2026 $ 426,919 $ 324,529 $ 466,836 $ 609,142

Beers April 17, 2024 February 28, 2027 $ 1,000,000 $ 774,002 $ 1,107,336 $ 1,440,670

Paul O’Callaghan April 17, 2024 February 28, 2027 $ 411,831 $ 318,757 $ 456,034 $ 593,311

_______________

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Through our subsidiaries, Aircastle Advisor LLC and Aircastle (Ireland) Designated Activity Company, we have entered into an employment agreement (as amended) with each of our NEOs.

These employment agreements generally provide for payment of an annual base salary and the executives’ eligibility to receive an annual cash bonus with indicated target annual cash bonus and LTI award levels.

These employment agreements generally provide for payment of an annual base salary and the executives’ eligibility to receive an performance-based incentives with indicated target annual cash bonus and LTI award levels.

Each employment agreement provides that the NEO is employed “at-will” and may be terminated at any time and for whatever reason by either us or him.

A summary of the payments and benefits to be provided to the NEOs upon a termination of employment, along with a description of the restrictive covenants applicable to each NEO, is set forth below in the section entitled “Potential Payments upon Termination or Change in Control.”

Beers’ Retirement and Consulting Agreement

On October 21, 2024, we entered into a retirement and consulting agreement with Mr.

Beers in connection with his retirement, effective February 28, 2025 (the “Retirement Date”).

Pursuant to his retirement and consulting agreement, Mr.

Beers continued to serve as Chief Legal Officer & Secretary through the Retirement Date and received his base salary and all other components of his usual and customary compensation and benefits, including a cash bonus for the 2024 performance year paid at the regular time based on actual achievement of the corporate financial metrics and individual performance goals for 2024.

He will not receive any new cash-based LTI awards for 2025 or any year thereafter, however he will continue to vest in all of his outstanding unvested LTI awards in accordance with the qualifying retirement feature as if he were a full-time employee of the Company, subject to satisfaction of the Book Equity IRR performance objectives.

Additionally, during the period starting on March 1, 2025 and continuing for a period of 12 months thereafter, Mr.

Beers will be engaged as an independent senior adviser to the Company, providing advice on matters as needed by the Company, including with respect to ongoing Russian aircraft litigation and insurance settlements.

The provisions of the retirement and consulting agreement are subject to Mr.

Beers’ execution and non-revocation of a release of claims and his continued compliance with the restrictive covenants applicable to him.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

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_______________

(1) Includes the portion of 2020 bonus restricted cash awards vesting on March 1, 2024, the 2022 LTI awards (or for Mr.

O’Callaghan, the applicable portion thereof) vesting on February 28, 2025, and the 2023 LIT awards vesting on February 28, 2026 .

(1) Includes the 2022 LTI awards (or for Mr.

O’Callaghan, the applicable portion thereof) vesting on February 28, 2025, the 2023 LTI awards vesting on February 28, 2026 and the 2024 LTI awards vesting on February 28, 2027 .

(2) Christopher L.

Beers, our former Chief Legal Officer & Secretary, retired from the Company effective February 28, 2025.

See the section entitled “Mr.

Beer’s Retirement and Consulting Agreement” above for information regarding his retirement payments and benefits.

As described above in the section entitled “Employment Agreements with NEOs,” we, through our subsidiaries, Aircastle Advisor LLC and Aircastle (Ireland) Designated Activity Company, have entered into employment agreements (as amended) with our named executive officers which set forth certain terms and conditions of their employment relating to termination and termination payments.

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(ii) a pro-rata annual bonus for the year of termination;

(iii) reimbursement of COBRA premiums or health insurance benefits for up to twelve months;

(iii) reimbursement of COBRA premiums or health insurance benefits for up to 12 months;

(iv) accelerated vesting of any remaining cash-based LTI awards;

• such named executive officer covenants not to compete with Aircastle for six months following termination of his employment for any reason and will not solicit the employees of Aircastle or the clients or customers of Aircastle for competing business, in each case, for a period of twelve months following termination.

For a description of the retirement and consulting agreement we entered into with Mr.

Beers in connection with his retirement, see the section entitled “Mr.

Beers Retirement and Consulting Agreement” above.

Director Compensation Table for 2024

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We believe the terms and conditions set forth in such agreements were reasonable and customary for transactions of this type.

We incurred fees from our Shareholders as part of intra-company service agreements totaling $8.3 million during the year ended February 29, 2024, whereby our Shareholders provide 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 $1.5 million during the year ended February 29, 2024.

On January 31, 2024, we entered into an amendment that extended the maturity date of our $200.0 million unsecured revolving credit facility with Mizuho Marubeni Leasing America Corporation, a related party – see Note 8 in the Notes to Consolidated Financial Statements for additional information.

This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.

On February 8, 2024, we entered into an amendment that extended the maturity date of our $300.0 million unsecured revolving credit facility with Mizuho Bank Ltd., a related party – see Note 8 in the Notes to Consolidated Financial Statements for additional information.

This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.

See Note 10 in the Notes to Consolidated Financial Statements for additional information.

Policies and Procedures for Review, Approval or Ratification of Transactions with Related Persons

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Hacker and Pollard to be independent and that Directors Messrs.

Hirose, Inglese, Kawabe and Okuno to be not independent.

Hirose, Inglese, Tsunoda and Okuno to be not independent.

The Board also considers the current Chairman Mr.

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Professional services rendered by EY for the years ended February 28, 2025 and February 29, 2024 were as follows:

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

Audit fees (1)

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Consolidated Balance Sheets as of February 28, 2025 and February 29, 2024.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended February 29, 2024, and February 28, 2023 and 2022.

Consolidated Statements of Cash Flows for the years ended February 29, 2024, and February 28, 2023 and 2022.

Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 29, 2024, and February 28, 2023 and 2022.

Consolidated Statements of Income and Comprehensive Income for the years ended February 28, 2025, February 29, 2024 and February 28, 2023.

Consolidated Statements of Cash Flows for the years ended February 28, 2025, February 29, 2024 and February 28, 2023.

Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 28, 2025, February 29, 2024 and February 28, 2023.

Notes to Consolidated Financial Statements.

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Morgan Securities LLC and RBC Capital Markets, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 6, 2013).

4.5 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).

4.6 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).

4.7 Sixth Supplemental Indenture, dated as of September 25, 2018, 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 September 25, 2018).

4.5 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).

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4.10 Indenture, dated as of July 18, 2023, between Aircastle Limited and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 18, 2023).

Description of Exhibit

4.11 Indenture, dated as of January 22, 2024, between Aircastle Limited and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 22, 2024).

4.12 Indenture, dated as of July 18, 2024, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 18, 2024).

4.13 Guarantee Supplemental Indenture (6.500% Senior Notes due 2028), dated as of July 18, 2024, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.12 to the Company’s Quarterly Report on Form 10-Q filed on October 10, 2024).

Description of Exhibit

4.14 Guarantee Supplemental Indenture (4.250% Senior Notes due 2026), dated as of July 18, 2024, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.13 to the Company’s Quarterly Report on Form 10-Q filed on October 10, 2024).

4.15 Guarantee Supplemental Indenture (5.250% Senior Notes due 2025), dated as of July 18, 2024, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.14 to the Company’s Quarterly Report on Form 10-Q filed on October 10, 2024).

4.16 Guarantee Supplemental Indenture (5.950% Senior Notes due 2029), dated as of July 18, 2024, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.15 to the Company’s Quarterly Report on Form 10-Q filed on October 10, 2024).

4.17 Guarantee Supplemental Indenture (2.850% Senior Notes due 2028), dated as of July 18, 2024, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.16 to the Company’s Quarterly Report on Form 10-Q filed on October 10, 2024).

4.18 Indenture, dated as of January 31, 2025, among Aircastle Limited, Aircastle (Ireland) Designated Activity Company and Computershare Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 31, 2025).

10.1 Form of Employment Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 8, 2017).

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(incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on February 14, 2017).

Description of Exhibit

10.12 Amendment No.

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(incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K filed on February 13, 2020).

Description of Exhibit

10.17 Amendment No.

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10.28 Amendment No.

22 to Purchase Agreement COM0270-15, dated as of May 28, 2024 (Amendment No.

22), by and between Aircastle Holding Corporation and Embraer S.A.

(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on July 11, 2024).

Description of Exhibit

10.29 Amendment No.

23 to Purchase Agreement COM0270-15, dated as of July 23, 2024 (Amendment No.

23), by and between Aircastle Holding Corporation and Embraer S.A.

(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on October 10, 2024).

10.30 Amendment No.

24 to Purchase Agreement COM0270-15, dated as of January 6, 2025 (Amendment No.

24), by and between Aircastle Holding Corporation and Embraer S.A.

10.31 Amendment No.

1 to Letter Agreement COM0271-15 in Purchase Agreement COM0270-15, dated as of November 11, 2016, by and between Aircastle Holding Corporation and Embraer S.A.

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(incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed on February 13, 2020).

Description of Exhibit

10.36 Amendment No.

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(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 7, 2023).

10.39 Amendment Agreement to the Seventh Amended and Restated Credit Agreement, dated as of February 8, 2024, by and among Aircastle Limited, the several lenders from time to time parties thereto, and Citibank N.A., in its capacity as agent for the lenders.

10.42 Amendment Agreement to the Seventh Amended and Restated Credit Agreement, dated as of February 8, 2024, by and among Aircastle Limited, the several lenders from time to time parties thereto, and Citibank N.A., in its capacity as agent for the lenders (incorporated by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K filed on April 25, 2024).

10.43 Retirement and Consulting Agreement, dated October 21, 2024, by and between Aircastle Advisor LLC and Christopher L.

Beers (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on January 10, 2025).

21.1 Subsidiaries of the Subsidiaries of the Registrant.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of 2002.

Description of Exhibit

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.

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(i) Consolidated Balance Sheets as of February 28, 2025 and February 29, 2024;

(ii) Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended February 29, 2024, and February 28, 2023 and 2022;

(iii) Consolidated Statements of Cash Flows for the years ended February 29, 2024, and February 28, 2023 and 2022;

(iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 29, 2024, and February 28, 2023 and 2022;

(ii) Consolidated Statements of Income and Comprehensive Income for the years ended February 28, 2025, February 29, 2024 and February 28, 2023;

(iii) Consolidated Statements of Cash Flows for the years ended February 28, 2025, February 29, 2024 and February 28, 2023;

(iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 28, 2025, February 29, 2024 and February 28, 2023;

and (v) Notes to Consolidated Financial Statements*

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Consolidated Balance Sheets as of February 28, 2025 and February 29, 2024

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the years ended February 29, 2024, and February 28, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended February 29, 2024, and February 28, 2023 and 2022

Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 29, 2024, and February 28, 2023 and 2022

Consolidated Statements of Income and Comprehensive Income for the years ended February 28, 2025, February 29, 2024 and February 28, 2023

Consolidated Statements of Cash Flows for the years ended February 28, 2025, February 29, 2024 and February 28, 2023

Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 28, 2025, February 29, 2024 and February 28, 2023

Notes to Consolidated Financial Statements F - 8

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Aircastle Limited and Subsidiaries (the Company) as of February 29, 2024 and February 28, 2023, and the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders' equity and cash flows for each of the three years in the period ended February 29, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Aircastle Limited and subsidiaries (the Company) as of February 28, 2025 and February 29, 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended February 28, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at February 28, 2025 and February 29, 2024, and the results of its operations and its cash flows for each of the three years in the period ended February 28, 2025, in conformity with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Recoverability assessment and Impairment of flight equipment held for lease

Description of the Matter

As more fully described in Note 1 to the consolidated financial statements, flight equipment held for lease is assessed for recoverability by management on an aircraft-by-aircraft basis annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

As a result of the assessments during the year ended February 29, 2024, the Company recorded impairment charges of $55 million related to the flight equipment held for lease.

Auditing the Company’s assessment of recoverability of flight equipment held for lease was judgmental due to the estimation required in determining the future cash flows to evaluate whether such cash flows were less than the carrying amount of flight equipment.

Further, auditing this analysis also involved evaluating the assumptions utilized in estimating the fair values to calculate the impairment charges.

In particular, the future cash flows were sensitive to changes related to significant assumptions such as the estimation of the future projected lease rates, future maintenance cash flows, as well as the value of aircraft adjusted for maintenance condition at the end of the useful life.

How We Addressed the Matter in Our Audit

To test the estimated future cash flows attributable to the flight equipment held for lease, we performed audit procedures on certain transactions that included, among others, evaluating and testing the estimation of the future projected lease rates, future maintenance cash flows, the value of aircraft adjusted for maintenance condition at the end of the useful life and the underlying data used by the Company in its analysis.

Our testing of the Company’s significant assumptions included, among others, comparing data to currently contracted lease rental and maintenance cash flows, evaluating future projected lease rates to third party data, evaluating the timing and cost of estimated future maintenance cash flows to manufacturers’ specifications and/or historical data, and recalculating end of life value of aircraft or its related parts based on projected maintenance condition at the end of its useful life and comparing it to published third party and/or historical sales data.

In addition, for the assumptions that most significantly impact recoverability we performed a sensitivity analysis to evaluate the changes to the future cash flows from changes in the significant assumptions.

We assessed the historical accuracy of certain assumptions by performing a look back analysis.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Accounting for Income Tax

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As more fully described in Note 11 to the consolidated financial statements, the Company recognized a consolidated provision for income taxes of $22 million for the year ended February 28, 2025.

Auditing the Company’s income tax accounting was complex due to the international tax structure maintained by the Company.

Auditing the Company’s income tax accounting was especially challenging due to the international tax structure maintained by the Company.

Specifically, the auditing of the application of changes in tax law and transactions to transfer, buy or sell aircraft in foreign jurisdictions required increased auditor effort, including the use of tax professionals with specialized skills, to evaluate the Company’s application of the tax laws in relevant jurisdictions and the related income tax.

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(Dollars in thousands, except share data)

February 29, February 28,

February 28/29,

Cash and cash equivalents $ 279,052 $ 129,977

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Additional paid-in capital 2,378,774 2,078,774

Retained earnings (accumulated deficit) 55,000 ( 7,316 )

Retained earnings 146,613 55,000

Total shareholders’ equity 2,525,387 2,133,774

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Aircastle Limited and Subsidiaries

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

Consolidated Statements of Income and Comprehensive Income

(Dollars in thousands, except per share amounts)

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

2025 2024 2023

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Other income (expense):

Loss on extinguishment of debt — ( 636 ) ( 14,156 )

Gain (loss) on extinguishment of debt 285 — ( 636 )

Other 56,247 5,571 14,092

Total other income 56,532 5,571 13,456

Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment 104,376 86,037 ( 289,251 )

Income tax provision (benefit) 23,265 25,466 ( 7,998 )

Earnings of unconsolidated equity method investment,

net of tax 2,205 2,188 3,044

Net income (loss) $ 83,316 $ 62,759 $ ( 278,209 )

Income from continuing operations before income taxes and earnings of unconsolidated equity method investment 142,458 104,376 86,037

Income tax provision 21,948 23,265 25,466

Earnings of unconsolidated equity method investment, net of tax 3,103 2,205 2,188

Net income $ 123,613 $ 83,316 $ 62,759

Preference share dividends ( 21,000 ) ( 21,000 ) ( 21,000 )

Net income (loss) available to common shareholders $ 62,316 $ 41,759 $ ( 294,368 )

Total comprehensive income (loss) available to common shareholders $ 62,316 $ 41,759 $ ( 294,368 )

Net income available to common shareholders $ 102,613 $ 62,316 $ 41,759

Total comprehensive income available to common shareholders $ 102,613 $ 62,316 $ 41,759

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

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(Dollars in thousands)

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

2025 2024 2023

Cash flows from operating activities:

Net income (loss) $ 83,316 $ 62,759 $ ( 278,209 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 123,613 $ 83,316 $ 62,759

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 355,666 348,229 332,663

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Collections on net investments in leases 7,628 3,557 6,505

Security deposits and maintenance payments included in earnings ( 54,373 ) ( 66,194 ) ( 123,969 )

Security deposits, maintenance payments and insurance settlements included in earnings ( 59,959 ) ( 54,373 ) ( 66,194 )

Gain on sale or disposition of flight equipment ( 77,191 ) ( 121,646 ) ( 70,860 )

Loss on extinguishment of debt — 636 14,156

(Gain) loss on extinguishment of debt ( 285 ) — 636

Impairment of aircraft 19,391 55,240 85,623

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Proceeds from sale or disposition of flight equipment 565,921 361,826 426,454

Proceeds from settlement of insurance claims 49,500 — —

Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits 4,157 5,650 28,393

Distributions from unconsolidated equity method investment in excess of earnings — — 104

Other ( 1,613 ) ( 6,408 ) 1,319

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Proceeds from issuance of common shares 300,000 200,000 —

Net proceeds from preference share issuance — — 392,997

Proceeds from secured and unsecured debt financings 1,702,048 2,029,750 493,848

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Dividends paid ( 21,000 ) ( 21,000 ) ( 21,000 )

Net cash and restricted cash provided by (used in) financing activities 406,977 161,316 ( 196,281 )

Net (decrease) increase in cash and restricted cash ( 101,884 ) 61,179 ( 409,916 )

Net cash and restricted cash provided by financing activities 655,286 406,977 161,316

Net increase (decrease) in cash and restricted cash 149,075 ( 101,884 ) 61,179

Cash and restricted cash at beginning of year 129,977 231,861 170,682

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(Dollars in thousands)

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

2025 2024 2023

Reconciliation to Consolidated Balance Sheets:

Cash and cash equivalents $ 129,977 $ 231,861 $ 167,891

Restricted cash and cash equivalents — — 2,791

Unrestricted and restricted cash and cash equivalents $ 129,977 $ 231,861 $ 170,682

Supplemental disclosures of cash flow information:

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(Dollars in thousands, except share amounts)

Common Shares Preference Shares Additional

Capital Retained

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Shareholders’

Common Shares Preference Shares

Shares Amount Shares Amount

Balance, February 28, 2022 14,048 $ — 400 $ — $ 1,878,774 $ ( 49,075 ) $ 1,829,699

Issuance of preference shares — — 400 — 392,997 — 392,997

Preference share dividends — — — — — ( 21,000 ) ( 21,000 )

Net loss — — — — — ( 278,209 ) ( 278,209 )

Net income — — — — — 62,759 62,759

Balance, February 28, 2023

14,048 $ — 400 $ — $ 1,878,774 $ ( 7,316 ) $ 1,871,458

Issuance of common shares 1,516 — — — 200,000 — 200,000

Preference share dividends — — — — — ( 21,000 ) ( 21,000 )

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Preference share dividends — — — — — ( 21,000 ) ( 21,000 )

Common share dividends — — — — — ( 11,000 ) ( 11,000 )

Net income — — — — — 123,613 123,613

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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 February 28, 2025, through the date on which the consolidated financial statements included in this Annual Report were issued.

Segment Reporting

We manage and analyze our business and report our results of operations based on one operating and reportable segment:

leasing, financing, selling and managing commercial flight equipment.

Our Chief Executive Officer is the chief operating decision maker (the “CODM”).

As a single reportable segment entity, the CODM utilizes consolidated net income to evaluate segment performance and allocate resources.

The significant segment expenses and other segment items, such as total assets, that are provided to the CODM align with expense information that is included in the Company’s consolidated balance sheets and statements of income.

Risk and Uncertainties

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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.

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.

Use of Estimates

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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.

Cash and Cash Equivalents

Aircastle considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Virtually all our cash and cash equivalents are held or managed by five major financial institutions.

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

Cash and Cash Equivalents

Aircastle considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Virtually all our cash and cash equivalents are held or managed by five major financial institutions.

Flight Equipment Held for Lease and Depreciation

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If a lease is below or above the range of current lease rates, we present value the estimated amount below or above the fair value range over the remaining term of the lease.

The resulting lease discount or premium is amortized into lease rental income over the remaining term of the lease.

The resulting lease discount or premium is amortized into lease revenue over the remaining term of the lease.

Impairment of Flight Equipment

We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis.

Additional customer or aircraft specific recoverability assessments are 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.

We perform a recoverability test of all aircraft and other flight equipment on a quarterly and annual basis.

We perform a customer or aircraft specific recoverability test 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.

We 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 value deterioration.

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

We focus on aircraft with near-term lease expirations, customers that have entered

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

aircraft does not meet the recoverability test, the aircraft will be adjusted to fair value, resulting in an impairment charge.

Management develops the assumptions used in the recoverability analysis based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third party industry sources.

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 value deterioration.

For assets with indicators of impairment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value.

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.

Our assumptions are 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.

If our estimates or assumptions change, including those related to our customers that have entered judicial insolvency proceedings or similar-type proceedings or restructurings, we may revise our cash flow assumptions and record future impairment charges.

If our estimates or assumptions change, 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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Unconsolidated Equity Method Investment

Aircastle accounts for its interest in an unconsolidated joint venture using the equity method as we do not control the joint venture entity.

Under the equity method, the investment is initially recorded at cost and the carrying amount is affected by its share of the unconsolidated joint venture’s undistributed earnings and losses and distributions of dividends and capital.

We have an unconsolidated equity method investment in an aircraft leasing entity that is accounted for using the equity method as we do not exercise control over the entity.

Under the equity method, the investment is initially recorded at cost and the carrying amount is affected by our share of the unconsolidated equity method investment’s undistributed earnings and losses and distributions of dividends and capital.

The investment may also reflect an equity loss in the event that circumstances indicate an other-than-temporary impairment.

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If a lease is terminated, we recognize security deposits in excess of outstanding lease payments as other revenue.

Maintenance Payments

Typically, under an operating lease, the lessee is responsible for performing all maintenance but they may also be required to make payments to us for heavy maintenance, overhaul or replacement of certain high-value components of the aircraft.

These maintenance payments are based on hours or cycles of utilization or on calendar time, depending upon the component, and are required to be made monthly in arrears or at the end of the lease term.

Our determination of whether

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

to require such payments to be made monthly or to permit a lessee to make a single maintenance payment at the end of the lease term depends on a variety of factors, including the creditworthiness of the lessee, the level of security deposit which may be provided by the lessee and market conditions at the time we enter into the lease.

If a lease requires monthly maintenance payments, we would typically be obligated to reimburse the lessee for costs they incur for heavy maintenance, overhaul or replacement of certain high-value components to the extent of maintenance payments received in respect of the specific maintenance event, usually shortly following completion of the relevant work.

If a lease requires end of lease term maintenance payments, typically the lessee would be required to pay us for its utilization of the aircraft during the lease;

however, in some cases, we may owe a net payment to the lessee in the event heavy maintenance is performed and paid for by the lessee during the lease term and the aircraft is returned to us in better condition than at lease inception.

We record monthly maintenance payments by the lessee as accrued maintenance payments liabilities in recognition of our contractual commitment to refund such receipts.

In these contracts, we typically do not recognize such maintenance payments as maintenance revenue during the lease.

Maintenance Payments

Typically, the lessee will be responsible for performing maintenance on the aircraft and will be required to make payments to us for heavy maintenance, overhaul or replacement of certain high-value components of the aircraft.

These maintenance payments are based on hours or cycles of utilization or on calendar time, depending upon the component, and would be made either monthly in arrears or at the end of the lease term.

Our determination of whether to require such payments to be made monthly or to permit a lessee to make a single maintenance payment at the end of the lease term depends on a variety of factors, including the creditworthiness of the lessee, the level of security deposit which may be provided by the lessee and market conditions at the time we enter into the lease.

If a lessee is making monthly maintenance payments, we would typically be obligated to reimburse the lessee for costs they incur for heavy maintenance, overhaul or replacement of certain high-value components, usually following completion of the relevant work.

If a lessee makes a single end of lease maintenance payment, the lessee would be required to pay us for its utilization of the aircraft during the lease.

In some cases, however, we may owe a net payment to the lessee in the event heavy maintenance is performed and paid for by the lessee during the lease term and the aircraft is returned to us in better condition than at lease inception.

We record monthly maintenance payments by the lessee as accrued maintenance payments liabilities in recognition of our obligation in the lease to refund such receipts, and therefore we typically do not recognize such maintenance payments as maintenance revenue during the lease.

Reimbursements to the lessee upon the receipt of evidence of qualifying maintenance work are charged against the existing accrued maintenance payments liability.

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Lease acquisition costs related to reconfiguration of the aircraft cabin, other lessee specific modifications and other direct costs are capitalized and amortized into revenue over the initial life of the lease, assuming no lease renewals, and are included in other assets.

The Company records an income tax provision in accordance with the various tax laws for those jurisdictions within which our transactions occur.

Aircastle uses an asset and liability based approach in accounting for income taxes.

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A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount estimated by us to be realizable.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities.

We did not have any unrecognized tax benefits.

The Company recognizes the tax benefit from an

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities.

We did not have any unrecognized tax benefits.

Fair Value Measurements

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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.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income and other gains and losses, net of income taxes, if any, affecting shareholders’ equity that, under U.S.

GAAP, are excluded from net income (loss).

Comprehensive Income

Comprehensive income consists of net income and other gains and losses, net of income taxes, if any, affecting shareholders’ equity that, under U.S.

GAAP, are excluded from net income.

Deferred Financing Costs

Deferred financing costs, which are included in borrowings from secured and unsecured financings, net, in the Consolidated Balance Sheets, are amortized using the interest method for amortizing loans over the lives of the relevant related debt.

Deferred financing costs, which are included in borrowings from secured and unsecured financings, net, are amortized using the interest method for amortizing loans over the lives of the relevant related debt.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASC 848”).

ASC 848 provides temporary optional expedients and exceptions to certain U.S.

GAAP contract modification requirements for contracts affected by reference rate reform as entities transition away from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates.

In December 2022, the FASB issued ASU 2022-06 to defer the sunset date of ASC 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the optional expedients in ASC 848.

The ICE Benchmark Administration Limited, LIBOR’s administrator, has ceased publishing all LIBOR settings, including the Overnight, 1-month, 3-month, 6-month, and 12-month USD LIBOR U.S.

dollar settings.

Effective March 1, 2023, we adopted ASC 848 and commenced the transition of our LIBOR-based contracts to the Secured Overnight Financing Rate (“SOFR” or “Term SOFR”).

As of February 29, 2024, we had no aircraft leases or debt financings for which the associated lease rental revenue or interest expense used LIBOR as the applicable reference rate.

The adoption of ASC 848 did not have a material impact on our consolidated financial statements.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires all public entities, including single reportable segment entities, to provide the segment measures of profitability used by the CODM to allocate resources and assess performance in interim and annual periods.

The standard also requires disclosure of significant segment expenses and other segment items that are regularly provided to the CODM.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 using the retrospective method.

We adopted the standard during the year ended February 28, 2025, which did not have a material impact on our consolidated financial statements;

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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The standard requires disclosure of specific categories in the rate reconciliation, using both percentages and reporting currency amounts, as well as disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and individual jurisdictions.

The standard is effective for annual periods beginning after December 15, 2024.

We are currently evaluating the standard, however, it is not expected to have a material impact on our consolidated financial statements.

The standard is effective

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

for annual periods beginning after December 15, 2024 and should be applied on a prospective basis.

We are currently evaluating the standard;

however, it is not expected to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

This standard requires entities to provide additional disclosure around certain costs and expenses presented within the Income Statement.

This standard aims to improve the disclosures around the entity’s expenses and address requests from investors for more detailed information about the types of expenses.

The standard is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted.

The Company does not anticipate that the adoption of the standard will have a material impact on its consolidated financial statements or related disclosures.

Fair Value Measurements

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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.

Assets subject to these measurements include our aircraft and unconsolidated equity method investment.

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 (Level 2 or 3), which includes third party appraisal data, and an income approach (Level 3), which includes 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.

Fair value measurements for aircraft in impairment tests are based on the average of the market approach (Level 2 or 3), which includes third-party appraisal data, and an income approach (Level 3), which includes the Company’s assumptions and appraisal data as to the present value of future cash proceeds from leasing and selling aircraft.

Level 3 valuations contain significant non-observable inputs.

See “Aircraft Valuation” below for further information.

We account for our investment in unconsolidated joint venture under the equity method of accounting.

We account for our unconsolidated equity method investment 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.

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The carrying amounts and fair values of our financial instruments at February 28, 2025 and February 29, 2024, were as follows:

February 29, 2024 February 28, 2023

February 28/29,

Assets Carrying Amount

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Credit Facilities $ 150,000 $ 150,000 $ 20,000 $ 20,000

Unsecured Term Loan — — 155,000 151,449

Term Financings 509,104 513,161 883,451 885,139

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(1) See Assets Measured at Fair Value on a Recurring Basis.

(2) As of February 29, 2024, we had a $ 3.2 million allowance for credit losses on certain investments in debt securities that are carried at amortized cost – see Note 15.

(2) We had a $ 4.1 million and $ 3.2 million allowance for credit losses on certain investments in debt securities that are carried at amortized cost as of February 28, 2025 and February 29, 2024, respectively – see Note 15.

Aircraft Valuation

Impairment of Flight Equipment

During the year ended February 28, 2025, the Company recorded impairment charges totaling $ 19.4 million, including $ 11.0 million of transactional impairments related to a scheduled lease expiration and an aircraft lease amendment.

The Company recognized $ 24.0 million of maintenance revenue for these aircraft during the year ended February 28, 2025.

Total impairment charges also included $ 8.4 million related to flight equipment that was recorded as a component of other assets and subject to tear-down and parts sales programs.

During the year ended February 29, 2024, the Company recorded impairments charges totaling $ 55.2 million.

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The Company recognized $ 48.0 million of maintenance revenue for these aircraft and engines.

See “Annual Recoverability Assessment” below for further information regarding impairment charges recognized as part of our annual fleet review.

During the year ended February 28, 2023, the Company wrote off the remaining book values of 8 narrow-body and 1 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 year ended February 28, 2023.

The Company also recognized $ 20.3 million of maintenance and other revenue for these 9 aircraft related to payments received on maintenance and general security letters of credit.

In addition to the asset write-offs above, during the year ended February 28, 2023, the Company recorded impairment charges totaling $ 53.7 million primarily related to the scheduled lease expirations of 3 narrow-body aircraft and lease terminations of 2 narrow-body aircraft, as well as 1 wide-body aircraft resulting from our annual fleet review.

The Company recognized $ 58.9 million of maintenance and lease rentals received in advance into revenue for these aircraft during the year ended February 28, 2023.

Annual Recoverability Assessment

We performed our annual recoverability assessment of all our aircraft during the third quarter of fiscal 2023.

As a result, of our annul fleet review, we recorded impairment charges of $ 9.5 million related to 3 narrow-body aircraft, as well as 1 spare engine.

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.

Recoverability Assessment

We perform a recoverability assessment of all aircraft and other flight equipment on a quarterly basis and annually during the third quarter of fiscal year 2024.

We perform a recoverability test when events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an aircraft or other flight equipment may not be recoverable.

For assets with indicators of impairment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value.

The undiscounted cash flows consist of cash flows from currently contracted lease rentals and maintenance payments, future projected lease rates and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft.

In the event that an aircraft does not meet the recoverability test, the aircraft will be adjusted to fair value, resulting in an impairment charge.

Management assumptions are 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.

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

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The following table summarizes the activities for the Company’s flight equipment held for lease for the years ended February 28, 2025 and February 29, 2024:

February 29, February 28,

February 28/29,

Beginning balance

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The Company filed claims against the reinsurers of the Russian airlines’ insurance and the Company’s contingent and possessed insurance policies (“C&P Policies”) seeking indemnity.

On December 26, 2023, the Company received cash settlement proceeds of $ 43.2 million in settlement of the Company’s claims under the insurance policies of Joint Stock Company Aurora Airlines and Joint Stock Company Rossiya Airlines (collectively, the “Airlines”) in respect of 4 aircraft (collectively, the “Aircraft”) formerly on lease to the Airlines, which has been recorded within gain on sale or disposition of flight equipment.

The settlement resolves claims against the Airlines, their respective insurers, and transfers the Aircraft title to a Russian insurer.

The Company is in ongoing settlement discussions for the 5 other aircraft that were not included in the insurance settlement.

However, it is uncertain whether any of these discussions will result in any settlement and, if so, in what amount.

Settlement proceeds, net of any related costs, were recorded as a component of gain on sale or disposition of flight equipment for the year ended February 29, 2024.

The receipt of the insurance settlement proceeds serve to mitigate, in part, the Company’s losses under its aviation insurance policies.

The Company reserves all rights under its C&P Policies.

The collection, timing and amount of any future recoveries, including those related to insurance litigation, remain uncertain.

During the fourth quarter of fiscal year 2024, the Company received cash proceeds of $ 49.5 million in settlement of the Company’s claims against certain of the insurers under its C&P Policies.

The settlement proceeds were recorded as a component of other income for the year ended February 28, 2025.

The receipt of the insurance proceeds serve to mitigate in part, the Company’s losses under its aviation insurance policies.

We remain in settlement discussions with some of the remaining insurers under our C&P Policies.

However, the collection, timing and amount of any future recoveries, including those related to insurance litigation, remain uncertain.

Accordingly, at this time, the Company can give no assurance as to when or what amounts it may ultimately collect with respect to these matters.

During the year ended February 29, 2024, the Company received cash settlement proceeds of $ 43.2 million in settlement of the Company’s claims under the insurance policies of Joint Stock Company Aurora Airlines and Joint Stock Company Rossiya Airlines (collectively, the “Airlines”) in respect of 4 aircraft (collectively, the “Aircraft”) formerly on lease to the Airlines, which has been recorded within gain on sale or disposition of flight equipment.

The settlement resolves claims against the Airlines, their respective insurers, and transfers the Aircraft title to a Russian insurer.

Aircastle Limited and Subsidiaries

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At February 28, 2025 and February 29, 2024, our net investment in leases consisted of 14 and 15 aircraft, respectively.

We sold 1 aircraft that was subject to a sales-type lease during the year ended February 28, 2025.

The components of our net investment in leases at February 28, 2025 and February 29, 2024 were as follows:

February 29, February 28,

February 28/29,

Lease receivable $ 121,202 $ 142,983

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Net investment in leases, net $ 257,249 $ 282,439

During the year ended February 29, 2024, 12 aircraft were reclassified from operating leases to sales-type leases and we recognized a provision for credit losses totaling $ 7.0 million for these aircraft.

Collectability of the lease payments for 10 of these 12 aircraft, which was not deemed probable at the effective date of the related lease modifications, became probable during the year ended February 29, 2024.

Accordingly, we derecognized the carrying amounts of the underlying aircraft and lease payments recorded by us as deposit liabilities and recognized net investments in leases.

A selling profit totaling $ 32.7 million for these 10 aircraft was recognized as a component of gain on sale or disposition of flight equipment for the year ended February 29, 2024.

We also sold 1 aircraft that was subject to a sales-type lease during the year ended February 29, 2024.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

As of February 28, 2025, future lease payments on net investment in leases were as follows:

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Difference between undiscounted lease payments and lease receivable $ 36,975

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Concentration of Risk

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The geographic concentration of our Net Book Value as of February 28, 2025 and February 29, 2024 was as follows:

February 29, 2024 February 28, 2023

February 28/29,

Region Number of

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_______________

(1) Of the 3 off-lease aircraft at February 29, 2024, we have 1 narrow-body freighter aircraft that we are currently marketing for lease or sale.

(1) We currently have 1 narrow-body freighter aircraft that we are marketing for lease or sale.

The following table sets forth net book value of flight equipment attributable to individual countries representing at least 10% of net book value of flight equipment based on each lessee’s principal place of business as of:

February 29, 2024 February 28, 2023

February 28/29,

Region Net Book

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Value % Number

$ 750,498 11 % 4 $ — — % —

United States $ 1,223,496 16 % 7 $ 806,162 11 % 5

806,162 11 % 5 — — % —

_______________

(1) As of February 28, 2023, India and the United States represented less than 10% of our Net Book Value.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

India 1,046,978 14 % 3 750,498 11 % 4

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

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

Region 2025 2024 2023

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Total 100 % 100 % 100 %

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

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:

February 29, Year Ended February 28,

Year Ended February 28/29,

2025 2024 2023

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Largest lessees by lease rental revenue 3 20 % 3 21 % 3 21 %

3 21 % 3 21 % 6 38 %

_______________

(1) The number of lessees and combined percentage for the year ended February 28, 2022, includes 1 of our Russian lessees, which accounted for 5 % of total lease rental revenue.

Lease rental revenue for this customer includes the recognition of lease rentals received in advance of $ 17.2 million into revenue;

excluding this amount, this customer accounted for 2 % of total lease rental revenue.

For the year ended February 28, 2025, total revenue attributable to the United States, Spain and India was 15 %, 10 % and 10 %, respectively.

Total revenue attributable to the United States and Spain included $ 37.8 million and $ 40.5 million, respectively, from gains on sale or disposition of flight equipment and maintenance revenue.

For the year ended February 29, 2024, no single country comprised 10% or more of total revenue.

For the year ended February 28, 2023, total revenue attributable to the United States and India was 15 % and 12 %, respectively, and was partially driven by maintenance and other revenue and gains on sale of aircraft.

For the year ended February 28, 2022, we had 6 Russian lessees that accounted for 17 % of our total revenue.

Total revenue from these lessees included $ 89.4 million of lease rentals received in advance, maintenance, security deposits and other revenue resulting from the sanctions placed on Russia, which required the termination of leasing activities.

Unconsolidated Equity Method Investment

We have an equity method investment with Mizuho Leasing which has 8 aircraft with a net book value of $ 244.3 million at February 28, 2025.

February 29, February 28,

Balance at February 28, 2023 $ 40,505 $ 38,317

February 28/29,

Beginning balance $ 42,710 $ 40,505

Earnings of unconsolidated equity method investment, net of tax 3,103 2,205

Balance at February 29, 2024 $ 42,710 $ 40,505

Ending balance $ 45,813 $ 42,710

On October 29, 2024, we entered into a loan agreement to provide our equity method investee with a $ 4.5 million unsecured loan facility, which bears interest at a rate of Term SOFR (as defined in the credit agreement) plus 2 % and is payable on October 29, 2025.

This transaction was approved by our management as an arm’s length transaction under our related party policy.

On January 6, 2025, $ 3.5 million of the outstanding principle amount was repaid by our equity method investee.

Aircastle Limited and Subsidiaries

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Senior Notes due 2024 (2)

— — % N/A 500,000

— 4.125 % 05/01/24 500,000

Senior Notes due 2025 650,000 5.25 % 08/11/25 650,000

— — % N/A 650,000

Senior Notes due 2026 650,000 4.25 % 06/15/26 650,000

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Senior Notes due 2031 500,000 5.75 % 10/01/31 —

Unsecured Term Loan (2)

— — % N/A 155,000

Revolving Credit Facilities 150,000 5.67 % to 6.60 %

05/24/25 to 02/08/28 20,000

Debt issuance costs and discounts ( 47,219 ) ( 46,901 )

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Term Financings

During the year ended February 29, 2024, we borrowed the remaining $ 168.7 million available under our full recourse secured financing facility entered into on November 21, 2022 (the “2022 Secured Facility”).

The total amount borrowed under the 2022 Secured Facility was $ 447.7 million in relation to 17 owned aircraft.

The 2022 Secured Facility bears interest at a floating rate under the Term SOFR (as defined in the credit agreement governing the 2022 Secured Facility) plus 2.35 % per annum and matures on November 21, 2029.

On August 28, 2024, we repaid in full the $ 206.3 million outstanding principal amount of one of our term financings secured by 8 aircraft, and $ 1.9 million of accrued interest.

The secured term financing had a final stated maturity date of September 13, 2024, and we recognized a gain on the early extinguishment of debt of $ 0.3 million.

On December 27, 2024, we repaid in full the $ 60.6 million outstanding principal amount of one of our term financings secured by 7 aircraft, and $ 0.6 million of accrued interest, at its stated maturity date.

On February 28, 2025, we repaid in full the $ 79.7 million outstanding principal amount of one of our term financings secured by 3 aircraft, and $ 0.6 million of accrued interest.

The secured term financing had a final stated maturity date of March 6, 2025.

Unsecured Debt Financings:

5.750 % Senior Notes due 2031

On July 18, 2023, the Company issued $ 650.0 million aggregate principal amount of 6.500 % Senior Notes due 2028 (the “ 6.500 % Senior Notes due 2028”) at an issue price of 99.815 %.

The 6.500 % Senior Notes due 2028 will mature on July 18, 2028, and bear interest at a rate of 6.50 % per annum, payable semi-annually on January 18 and July 18 of each year, commencing on January 18, 2024.

Interest accrues on the 6.500 % Senior Notes due 2028 from July 18, 2023.

On July 18, 2024, the Company and Aircastle (Ireland) Designated Activity Company (“AIDAC”), a wholly-owned subsidiary of the Company, issued $ 500.0 million aggregate principal amount of 5.750 % Senior Notes due 2031 (the

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

“Senior Notes due 2031”) at an issue price of 99.64 %.

The Senior Notes due 2031 will mature on October 1, 2031, and bear interest at a rate of 5.75 % per annum, payable semi-annually on April 1 and October 1 of each year, commencing on April 1, 2025.

Interest accrues on the Senior Notes due 2031 from July 18, 2024.

5.250 % Senior Notes due 2030

On January 22, 2024, the Company issued $ 650.0 million aggregate principal amount of 5.950 % Senior Notes due 2029 (the “Senior Notes due 2029”) at an issue price of 99.391 %.

The Senior Notes due 2029 will mature on February 15, 2029, and bear interest at a rate of 5.95 % per annum, payable semi-annually on February 15 and August 15 of each year, commencing on August 15, 2024.

On January 31, 2025, the Company and AIDAC issued $ 500.0 million aggregate principal amount of 5.250 % Senior Notes due 2030 (the “Senior Notes due 2030”) at an issue price of 99.171 %.

The Senior Notes due 2030 will mature on March 15, 2030, and bear interest at a rate of 5.25 % per annum, payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2025.

Interest accrues on the Senior Notes due 2030 from January 31, 2025.

Revolving Credit Facilities

During the year ended February 29, 2024, we entered into various amendments for one of our unsecured revolving credit facilities that extended the maturity date and expanded the size of the facility from $ 245.0 million to $ 640.0 million.

Of the total commitment, $ 40.0 million was allocated to Tranche C, which matures on May 24, 2025, and $ 600.0 million was allocated to Tranche D, which matures on January 9, 2028.

The facility bears interest at Term SOFR (as defined in the amendment to the credit agreement) plus 1.950 %.

On January 31, 2024, we entered into an amendment that extended the maturity date of our $ 200.0 million revolving credit facility with Mizuho Marubeni Leasing America Corporation, a related party, to January 31, 2027.

The facility bears interest at Term SOFR (as defined in the amendment to the credit agreement) plus 2.01 %.

This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.

On February 8, 2024, we entered into an amendment that extended the maturity date of our $ 300.0 million revolving credit facility with Mizuho Bank Ltd., a related party, to February 7, 2027.

The facility bears interest at Term SOFR (as defined in the amendment to the credit agreement) plus 1.5 %.

This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.

On February 8, 2024, we entered into an amendment that extended the maturity date of our $ 1.0 billion unsecured credit facility, to February 7, 2028.

The facility bears interest at Term SOFR (as defined in the amendment to the credit agreement) plus 1.25 %.

As of February 28, 2025, we had $ 150.0 million in borrowings outstanding under our revolving credit facilities and had $ 2.0 billion available for borrowing.

AIDAC Guarantees

In connection with AIDAC co-issuing the Senior Notes due 2031 with the Company, AIDAC agreed to fully and unconditionally guarantee (the “AIDAC Guarantees”) the Company’s obligations under its:

(i) revolving credit facilities;

(ii) 5.250 % Senior Notes due 2025;

(iii) 4.250 % Senior Notes due 2026;

(iv) 2.850 % Senior Notes due 2028;

(v) 6.500 % Senior Notes due 2028 and (vi) 5.950 % Senior Notes due 2029 (collectively, the “Existing Unsecured Debt”).

As a result of the AIDAC Guarantees, the Senior Notes due 2030 and the Senior Notes due 2031 rank pari passu in right of payment with the Existing Unsecured Debt.

Maturities of the secured and unsecured debt financings over the next five years and thereafter are as follows:

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Issuance of Common Shares

On July 5, 2023, the Company entered into a Subscription Agreement with its Shareholders, pursuant to which the Company has agreed to make a pro rata issuance of the Company’s common shares, $ 0.01 par value per share (the “Shares”), for an aggregate purchase price of up to $ 500.0 million.

The Shares will be issued in two tranches, with 1,516 Shares issued under the first tranche on July 18, 2023, for an aggregate purchase price of $ 200.0 million.

The issuance of the second tranche, which is subject to both the approval of the Company’s Board of Directors and Shareholders, is expected to occur during the Company’s first fiscal quarter of 2024 for an aggregate purchase price of up to $ 300.0

On July 5, 2023, the Company entered into a Subscription Agreement with its Shareholders, pursuant to which the Company agreed to make a pro rata issuance of the Company’s common shares, $ 0.01 par value per share (the “Shares”), for an aggregate purchase price of up to $ 500.0 million.

On July 18, 2023, 1,516 Shares in the aggregate were issued to the Shareholders for an aggregate purchase price of $ 200.0 million.

On June 28, 2024, 2,276 Shares in the aggregate were issued to the Shareholders for an aggregate purchase price of $ 300.0 million, representing the second and final tranche of Shares to be issued under the Subscription Agreement.

The number of Shares and the subscription price per share were determined and agreed to by the parties at the time of issuance.

The Shares rank pari passu in all respects with other common shares of the Company.

The Company has used, and intends to continue to use, the net proceeds from the issuance of Shares for general corporate purposes.

Aircastle Limited and Subsidiaries

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(Dollars in thousands, except per share amounts)

The number of Shares and the subscription price per share are to be determined and agreed to by the parties at the time of issuance.

The Shares will rank pari passu in all respects with other common shares of the Company.

The Company has used and intends to continue to use the net proceeds from the issuance of Shares for general corporate purposes.

Common Share Dividends

On March 17, 2025, the Company paid a dividend to its Shareholders in the amount of $ 11.0 million, which was accrued as of February 28, 2025.

The common share dividend was approved by the Company’s Board of Directors and the Shareholders.

Preference Share Dividends

On March 15, 2023, the Company paid a semi-annual dividend in the amount of $ 10.5 million for its preference shares, which was approved by the Company’s Board of Directors on January 10, 2023, and accrued as of February 28, 2023.

On September 15, 2023, the Company paid a semi-annual dividend in the amount of $ 10.5 million for its preference shares, which was approved by the Company’s Board of Directors on July 11, 2023.

On January 9, 2024, the Company’s Board of Directors approved a semi-annual dividend in the amount of $ 10.5 million for its preference shares, which was accrued as of February 29, 2024, and paid on March 15, 2024.

On March 15, 2024, the Company paid a semi-annual dividend in the amount of $ 10.5 million for its preference shares, which was accrued as of February 29, 2024.

On September 16, 2024, the Company paid a semi-annual dividend in the amount of $ 10.5 million for its preference shares, which was accrued as of August 31, 2024.

On March 17, 2025, the Company paid a semi-annual dividend in the amount of $ 10.5 million for its preference shares, which was accrued as of February 28, 2025.

All semi-annual dividends for our preference shares were approved by the Company’s Board of Directors .

Related Party Transactions

We incurred fees from our Shareholders as part of intra-company service agreements totaling $ 8.7 million and $ 8.3 million during the years ended February 28, 2025 and February 29, 2024, respectively, whereby our Shareholders provide certain management and administrative services to the Company.

These fees are recorded in selling, general and administrative costs in the consolidated statement of income (loss).

In addition, the Company purchased parts under a parts management services and supply agreement with an affiliate of Marubeni totaling $ 1.5 million and $ 4.2 million during the years ended February 29, 2024 and February 28, 2023, respectively.

On February 8, 2024, the Company incurred fees of $ 2.7 million in relation to the amendment of our $ 300.0 million unsecured revolving credit facilities with Mizuho Bank Ltd., a related party - see Note 8 for additional information.

This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.

See Note 8 for additional information regarding amendments entered into during the year ended February 29, 2024 in respect of our unsecured revolving credit facilities with Mizuho Marubeni Leasing America Corporation and Mizuho Bank Ltd., each a related party.

See Note 9 for additional information regarding our Subscription Agreement entered into with our Shareholders during the year ended February 29, 2024.

These fees are recorded in selling, general and administrative costs in the consolidated statements of income.

See Note 9 for additional information regarding our Subscription Agreement entered into with our Shareholders and Note 7 for our loan agreement entered into with our equity method investee during the year ended February 28, 2025.

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 an assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035.

In December 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act which imposes a 15% corporate income tax effective for tax years beginning on or after January 1, 2025, and is expected to supersede the Minister of Finance’s assurance from such date onwards.

The Company expects to be subject to Bermuda corporate income tax with respect to its fiscal year beginning March 1, 2025 and in subsequent years.

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.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The sources of income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment for the years ended February 29, 2024, and February 28, 2023 and 2022, were as follows:

Year Ended February 29, Year Ended February 28,

In December 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act (“CIT Act”) which imposes a 15% corporate income tax effective for tax years beginning on or after January 1, 2025.

The Company will be subject to Bermuda corporate income tax with respect to its fiscal year beginning March 1, 2025 and in subsequent years.

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 currently impose income taxes, primarily the United States and Ireland.

The sources of income from continuing operations before income taxes and earnings of unconsolidated equity method investment for the years ended February 28, 2025, February 29, 2024 and February 28, 2023, were as follows:

Year Ended February 28/29,

2025 2024 2023

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operations 115,205 79,347 64,865

Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investment $ 104,376 $ 86,037 $ ( 289,251 )

The components of the income tax provision (benefit) for the years ended February 29, 2024, and February 28, 2023 and 2022, consisted of the following:

Year Ended February 29, Year Ended February 28,

Income from continuing operations before income taxes and earnings of unconsolidated equity method investment $ 142,458 $ 104,376 $ 86,037

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The components of the income tax provision for the years ended February 28, 2025, February 29, 2024 and February 28, 2023, consisted of the following:

Year Ended February 28/29,

2025 2024 2023

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14,002 13,518 14,759

Deferred income tax (benefit) 20,053 13,690 ( 9,386 )

Deferred income tax 17,550 20,053 13,690

Total $ 21,948 $ 23,265 $ 25,466

Significant components of the Company’s deferred tax assets and liabilities at February 28, 2025 and February 29, 2024, consisted of the following:

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

Deferred tax assets:

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Net deferred tax liabilities $ ( 118,634 ) $ ( 100,357 )

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

The Company had $ 283.1 million of federal net operating loss (“NOL”) carry forwards available at February 28, 2025 with no expiration date to offset future taxable income subject to U.S.

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The Company also had NOL carry forwards of $ 1.3 billion with no expiration date to offset future Irish taxable income.

The Bermuda Corporate Income Tax Act includes a provision which would allow the Company to carry forward losses incurred in Bermuda for the fiscal year ended February 28, 2021 and subsequent fiscal years.

The CIT Act includes a provision which would allow the Company to carry forward losses incurred in Bermuda for the year ended February 28, 2021 and subsequent fiscal years.

The Company has NOL carryforwards of $ 302.3 million with no expiration date to offset future Bermuda taxable income.

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Deferred tax assets and liabilities are included in other assets and accounts payable, accrued expenses and other liabilities, respectively.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

We do not expect to incur income taxes on future distributions of undistributed earnings of non-U.S.

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The aircraft owning subsidiaries resident in Ireland and the U.S.

are subject to tax in those respective jurisdictions.

are currently 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.

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subsidiaries and are subject to tax in those respective jurisdictions.

Differences between statutory income tax rates and our effective income tax rates applied to pre-tax income from continuing operations for the years ended February 29, 2024, and February 28, 2023 and 2022, consisted of the following:

Year Ended February 29, Year Ended February 28,

Differences between statutory income tax rates and our effective income tax rates applied to pre-tax income from continuing operations for the years ended February 28, 2025, February 29, 2024 and February 28, 2023, consisted of the following:

Year Ended February 28/29,

2025 2024 2023

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Other ( 433 ) 1,107 ( 968 )

Provision (benefit) for income taxes $ 23,265 $ 25,466 $ ( 7,998 )

Provision for income taxes $ 21,948 $ 23,265 $ 25,466

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities.

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We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the year.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Ireland and Bermuda Tax Law Changes

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The Finance Bill also requires a 25% withholding tax be applied to dividends and distributions, subject to certain exemptions, as well as introduces new interest deduction rules for a qualifying finance company.

The Company has determined that there is no current year impact of the law change and is currently evaluating the impact the Finance Bill may have in future years on its operations, in particular, with respect to existing intra-entity loans, as well as on our provision for income taxes and the consolidated financial statements.

On December 18, 2023, Bermuda enacted a 15% corporate income tax regime (the “Bermuda CIT”) that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025.

As a result of the Bermuda CIT, the Company’s exemption from Bermuda corporate income, withholding and capital gains taxes will cease on February 28, 2025.

The Company has determined that there is no current year impact of the law change and is currently evaluating the impact the Bermuda CIT may have in future years on its operations, as well as on our provision for income taxes and the consolidated financial statements.

The Finance Bill did not have a significant impact on our consolidated financial statements for the year ended February 28, 2025.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

On December 18, 2023, Bermuda enacted a 15% corporate income tax regime, the CIT Act, that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025.

As a result of the Bermuda CIT, the Company’s exemption from Bermuda corporate income, withholding and capital gains taxes ceased on February 28, 2025.

The Company has appropriately considered the impact of the Bermuda CIT and its impact on current and deferred income taxes.

Interest, Net

The following table shows the components of interest, net.

Year Ended February 29, Year Ended February 28,

Year Ended February 28/29,

2025 2024 2023

6 unchanged sentences

Commitments and Contingencies

Rent expense, primarily for the corporate office and sales and marketing facilities, was $ 2.3 million, $ 2.1 million and $ 1.6 million for the years ended February 29, 2024, and February 28, 2023 and 2022, respectively.

Rent expense, primarily for the corporate office and sales and marketing facilities, was $ 1.9 million, $ 2.3 million and $ 2.1 million for the years ended February 28, 2025, February 29, 2024 and February 28, 2023, respectively.

As of February 28, 2025, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in the United States, Ireland and Singapore for future minimum lease payments as follows:

3 unchanged sentences

At February 28, 2025, we had commitments to acquire 20 aircraft for $ 771.7 million.

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Commitments under signed purchase agreements, including $ 34.4 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft at February 28, 2025, net of amounts already paid, were as follows:

2 unchanged sentences

Total $ 771,676

Aircastle Limited and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars in thousands, except per share amounts)

Other assets consisted of the following as of February 28, 2025 and February 29, 2024:

February 29, February 28,

February 28/29,

Deferred income tax asset $ 78 $ 48

13 unchanged sentences

(1) Net of lease incentives and tenant allowances.

(2) Net of an allowance for credit losses as of February 29, 2024 – see Note 15.

(2) Net of an allowance for credit losses as of February 28, 2025 and February 29, 2024 – see Note 15.

(3) See Note 2.

15 unchanged sentences

$ 6,802 $ 4,099 $ 10,271 $ 21,172

During the year ended February 28, 2025, we recognized an additional provision for credit losses in respect of debt securities and certain receivables that were restructured as part of an airline restructuring.

Aircastle Limited and Subsidiaries

1 unchanged sentence

(Dollars in thousands, except per share amounts)

During the year ended February 29, 2024, we increased our credit provision for net investment in leases as a result of 12 aircraft that were reclassified from operating leases to sales-type leases – see Note 5.

We also recognized a credit provision for debt securities received by us as part of an airline restructuring, as well as certain restructured receivables, during the year ended February 29, 2024.

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts payable, accrued expenses and other liabilities consisted of the following as of February 28, 2025 and February 29, 2024:

February 29, February 28,

February 28/29,

Accounts payable and accrued expenses $ 51,889 $ 57,685

Dividends payable 21,500 10,500

Deferred income tax liability 118,712 100,405

22 unchanged sentences

Naoshi Hirose

/s/ Taro Kawabe Director April 25, 2024

/s/ Keiji Okuno Director April 23, 2025

1 unchanged sentence

Pollard Director April 23, 2025

/s/ Takashi Tsunoda Director April 23, 2025

Takashi Tsunoda

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.

What changed 10-K

Item 9A. Controls and Procedures