Cover Page
Cover Page - shares | 3 Months Ended | |
May 31, 2022 | Jul. 08, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-32959 | |
Entity Registrant Name | AIRCASTLE LIMITED | |
Entity Incorporation, State or Country Code | D0 | |
Entity Tax Identification Number | 98-0444035 | |
Entity Address, Address Line One | c/o Aircastle Advisor LLC | |
Entity Address, Address Line Two | 201 Tresser Boulevard, Suite 400 | |
Entity Address, City or Town | Stamford | |
Entity Address, State or Province | CT | |
City Area Code | 203 | |
Local Phone Number | 504-1020 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,048 | |
Entity Central Index Key | 0001362988 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --02-28 | |
Entity Address, Postal Zip Code | 06901 | |
Common Shares | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Shares, par value $0.01 per share | |
Security Exchange Name | NONE | |
No Trading Symbol Flag | true | |
Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preference Shares, par value $0.01 per share | |
Security Exchange Name | NONE | |
No Trading Symbol Flag | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 241,030 | $ 167,891 |
Restricted cash and cash equivalents | 650 | 2,791 |
Accounts receivable | 61,538 | 63,666 |
Flight equipment held for lease, net | 6,239,217 | 6,313,950 |
Net investment in leases, net | 148,300 | 150,325 |
Unconsolidated equity method investments | 38,828 | 38,317 |
Other assets | 370,336 | 356,326 |
Total assets | 7,099,899 | 7,093,266 |
LIABILITIES | ||
Borrowings from secured financings, net | 644,763 | 684,039 |
Borrowings from unsecured financings, net | 3,837,104 | 3,835,841 |
Accounts payable, accrued expenses and other liabilities | 174,965 | 177,424 |
Lease rentals received in advance | 38,499 | 37,361 |
Security deposits | 68,832 | 69,189 |
Maintenance payments | 498,355 | 459,713 |
Total liabilities | 5,262,518 | 5,263,567 |
Commitments and Contingencies | ||
SHAREHOLDERS’ EQUITY | ||
Preference shares, $0.01 par value, 50,000,000 shares authorized, 400 (aggregate liquidation preference of $400,000) shares issued and outstanding at May 31, 2022 and February 28, 2022 | 0 | 0 |
Common shares, $0.01 par value, 250,000,000 shares authorized, 14,048 shares issued and outstanding at May 31, 2022 and February 28, 2022 | 0 | 0 |
Additional paid-in capital | 1,878,774 | 1,878,774 |
Accumulated deficit | (41,393) | (49,075) |
Total shareholders’ equity | 1,837,381 | 1,829,699 |
Total liabilities and shareholders’ equity | $ 7,099,899 | $ 7,093,266 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | May 31, 2022 | Feb. 28, 2022 |
Statement of Financial Position [Abstract] | ||
Preference shares, par value | $ 0.01 | $ 0.01 |
Preference shares, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 400 | 400 |
Preferred Stock, Shares Outstanding | 400 | 400 |
Preferred Stock, Liquidation Preference, Value | $ 400,000 | $ 400,000 |
Common shares, par value | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 250,000,000 | 250,000,000 |
Common shares, shares issued | 14,048 | 14,048 |
Common shares, shares outstanding | 14,048 | 14,048 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Revenues: | ||
Lease rental revenue | $ 144,144 | $ 132,125 |
Direct financing and sales-type lease revenue | 2,598 | 2,877 |
Amortization of lease premiums, discounts and incentives | (5,388) | (5,325) |
Maintenance revenue | 27,099 | 26,477 |
Total lease revenue | 168,453 | 156,154 |
Gain on sale of flight equipment | 3,687 | 9,021 |
Other revenue | 3,424 | 635 |
Total revenues | 175,564 | 165,810 |
Operating expenses: | ||
Depreciation | 81,318 | 82,391 |
Interest, net | 50,294 | 58,037 |
Selling, general and administrative | 19,916 | 15,583 |
Provision for credit losses | 580 | 6 |
Impairment of flight equipment | 4,428 | 20,583 |
Maintenance and other costs | 8,065 | 7,528 |
Total operating expenses | 164,601 | 184,128 |
Other income (expense): | ||
Loss on extinguishment of debt | (463) | (24) |
Other | 0 | 10 |
Total other income (expense) | (463) | (14) |
Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investments | 10,500 | (18,332) |
Income tax provision (benefit) | 3,329 | (8,292) |
Earnings of unconsolidated equity method investments, net of tax | 511 | 287 |
Net income (loss) | 7,682 | (9,753) |
Earnings available to common shareholders – Basic | 7,682 | (9,753) |
Total comprehensive income (loss) available to common shareholders | $ 7,682 | $ (9,753) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 7,682 | $ (9,753) |
Adjustments to reconcile net income (loss) to net cash and restricted cash provided by operating activities: | ||
Depreciation | 81,318 | 82,391 |
Amortization of deferred financing costs | 3,597 | 4,191 |
Amortization of lease premiums, discounts and incentives | 5,388 | 5,325 |
Deferred income taxes | 2,865 | 1,850 |
Collections on net investment in leases | 2,282 | 3,913 |
Security deposits and maintenance payments included in earnings | 9,076 | (13,139) |
Gain on sale of flight equipment | (3,687) | (9,021) |
Loss on extinguishment of debt | 463 | 24 |
Impairment of flight equipment | 4,428 | 20,583 |
Provision for credit losses | 580 | 6 |
Other | (508) | (290) |
Changes in certain assets and liabilities: | ||
Accounts receivable | 4,274 | 1,661 |
Other assets | (5,008) | (11,651) |
Accounts payable, accrued expenses and other liabilities | (4,305) | (3,604) |
Lease rentals received in advance | 1,848 | (2,496) |
Net cash and restricted cash provided by operating activities | 110,293 | 69,990 |
Cash flows from investing activities: | ||
Acquisition and improvement of flight equipment | (63,724) | (70,834) |
Proceeds from sale of flight equipment | 58,233 | 63,420 |
Aircraft purchase deposits and progress payments, net of deposits returned and aircraft sales deposits | (8,716) | 11,963 |
Net cash and restricted cash (used in) provided by investing activities | (14,207) | 4,549 |
Cash flows from financing activities: | ||
Repayments of secured and unsecured debt financings | (39,923) | (27,224) |
Debt extinguishment costs | (291) | (24) |
Deferred financing costs | (1,860) | (4,604) |
Security deposits and maintenance payments received | 27,911 | 22,793 |
Security deposits and maintenance payments returned | (425) | (475) |
Dividends paid | (10,500) | 0 |
Net cash and restricted cash used in financing activities | (25,088) | (9,534) |
Net increase in cash and restricted cash: | 70,998 | 65,005 |
Cash and restricted cash at beginning of period | 170,682 | 580,598 |
Cash and restricted cash at end of period | 241,680 | 645,603 |
Cash and cash equivalents | 241,030 | 642,910 |
Restricted cash and cash equivalents | 650 | 2,693 |
Unrestricted and restricted cash and cash equivalents | 241,680 | 645,603 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 44,275 | 44,948 |
Cash (received) paid for income taxes | (576) | 891 |
Supplemental disclosures of non-cash investing activities: | ||
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets assumed in asset acquisitions | 339 | 0 |
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets settled in sale of flight equipment | 3,800 | 12,138 |
Transfers from flight equipment held for lease to Net investment in leases and Other assets | $ 17,734 | $ 3,554 |
Consolidated Statements of Shar
Consolidated Statements of Shareholder's Equity Statement - USD ($) $ in Thousands | Total | Common Shares | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit |
Preferred Stock, Shares Outstanding | 0 | ||||
Balance, shares at Feb. 28, 2021 | 14,048 | ||||
Balance at Feb. 28, 2021 | $ 1,731,070 | $ 0 | $ 0 | $ 1,485,777 | $ 245,293 |
Net income (loss) | (9,753) | ||||
Balance, shares at May. 31, 2021 | 14,048 | ||||
Balance at May. 31, 2021 | $ 1,721,317 | $ 0 | $ 0 | 1,485,777 | 235,540 |
Preferred Stock, Shares Outstanding | 0 | ||||
Preferred Stock, Shares Outstanding | 400 | 400 | |||
Balance, shares at Feb. 28, 2022 | 14,048 | 14,048 | |||
Balance at Feb. 28, 2022 | $ 1,829,699 | $ 0 | $ 0 | 1,878,774 | (49,075) |
Net income (loss) | $ 7,682 | ||||
Balance, shares at May. 31, 2022 | 14,048 | 14,048 | |||
Balance at May. 31, 2022 | $ 1,837,381 | $ 0 | $ 0 | $ 1,878,774 | $ (41,393) |
Preferred Stock, Shares Outstanding | 400 | 400 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Summary of Significant Accounting Policies Organization Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda exempted company that was incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act of 1981 of Bermuda. Aircastle’s business consists of acquiring, leasing, managing and selling commercial jet aircraft. The Company is controlled by affiliates of Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing”). Aircastle is a holding company and conducts its business through subsidiaries that are wholly-owned, either directly or indirectly, by Aircastle. Basis of Presentation and Principles of Consolidation The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The accompanying consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. However, we believe that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2022. The consolidated financial statements include the accounts of Aircastle and all its subsidiaries, including any Variable Interest Entity (“VIE”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. We manage and analyze our business and report on our results of operations based on one operating segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker. The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of May 31, 2022, through the date on which the consolidated financial statements included in this Form 10-Q were issued. Risk and Uncertainties In the normal course of business, Aircastle encounters several significant types of economic risk including credit, market, aviation industry and capital market risks. Credit risk is the risk of a lessee’s inability or unwillingness to make contractually required payments and to fulfill its other contractual obligations to Aircastle. Market risk reflects the change in the value of financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying financings. Aviation industry risk is the risk of a downturn in the commercial aviation industry which could adversely impact a lessee’s ability to make payments, increase the risk of early lease terminations and depress lease rates and the value of the Company’s aircraft. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of its business or to refinance existing debt facilities. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While Aircastle believes the estimates and related assumptions used in the preparation of the consolidated financial statements are appropriate, actual results could differ from those estimates. Lease Revenue Recognition We lease flight equipment under net operating leases with lease terms typically ranging from three In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within other assets. Should we determine that the collectability of rental payments is no longer probable (including any deferral thereof), we will recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue. Impairment of Flight Equipment We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis. A recoverability assessment is also performed whenever events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. When we perform a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the aircraft exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted lease rental and maintenance payments, future projected lease rates and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft. In the event that an aircraft does not meet the recoverability test, the aircraft will be adjusted to fair value, resulting in an impairment charge. See Note 2 in the Notes to Unaudited Consolidated Financial Statements. Management develops the assumptions used in the recoverability analysis based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third party industry sources. The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors, such as the location of the aircraft and accessibility to records and technical documentation. We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform Topic 848 (“ASC 848”), in response to the market transition from the London interbank |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. The following tables set forth our financial assets as of May 31, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Fair Value Measurements at May 31, 2022 Using Fair Value Hierarchy Fair Value as of May 31, 2022 Quoted Prices Significant Significant Valuation Assets: Cash and cash equivalents $ 241,030 $ 241,030 $ — $ — Market Restricted cash and cash equivalents 650 650 — — Market Total $ 241,680 $ 241,680 $ — $ — Fair Value Measurements at February 28, 2022 Using Fair Value Hierarchy Fair Value as of February 28, 2022 Quoted Prices Significant Significant Valuation Assets: Cash and cash equivalents $ 167,891 $ 167,891 $ — $ — Market Restricted cash and cash equivalents 2,791 2,791 — — Market Total $ 170,682 $ 170,682 $ — $ — Our cash and cash equivalents and our restricted cash and cash equivalents consist largely of money market securities that are highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. For the three months ended May 31, 2022, we had no transfers into or out of Level 3. We measure the fair value of certain assets and liabilities on a non-recurring basis, when U.S. GAAP requires the application of fair value, including events or changes in circumstances that indicate the carrying amounts of these assets may not be recoverable. Assets subject to these measurements include our aircraft and investment in unconsolidated joint venture. We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value measurements for aircraft in impairment tests are based on the average of the market approach that uses Level 2 inputs, which include third party appraisal data and an income approach that uses Level 3 inputs, which include the Company’s assumptions and appraisal data as to future cash proceeds from leasing and selling aircraft discounted using the Company’s weighted average cost of capital. We account for our investment in unconsolidated joint ventures under the equity method of accounting. Investments are recorded at cost and are adjusted by undistributed earnings and losses and the distributions of dividends and capital. These investments are reviewed for impairment whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary. Aircraft Valuation Impairment of Flight Equipment During the three months ended May 31, 2022, the Company wrote off the remaining book value of eight narrow-body aircraft in Russia which have not been returned to us totaling $4.4 million. While we maintain title to the aircraft and will continue to pursue repossession, we determined that it is unlikely we will regain possession of these eight aircraft – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. The Company recognized $1.5 million of other revenue for these aircraft related to payments received on letters of credit. During the three months ended May 31, 2021, the Company recorded transactional impairment charges totaling $20.6 million which related to two narrow-body aircraft and were the result of an early lease termination and a scheduled lease expiration. The Company recognized $21.1 million of maintenance revenue for these two aircraft. Annual Recoverability Assessment We plan to perform our annual recoverability assessment of all our aircraft during the third quarter of 2022. We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration. The recoverability assessment is a comparison of the carrying value of each aircraft to its estimated undiscounted future cash flows. We develop the assumptions used in the recoverability assessment, including those relating to current and future demand for each aircraft type, based on management’s experience in the aircraft leasing industry, as well as information received from third-party sources. Estimates of the undiscounted cash flows for each aircraft type are impacted by changes in contracted and future expected lease rates, residual values, expected scrap values, economic conditions and other factors, such as the location of the aircraft and accessibility to records and technical documentation. If our estimates or assumptions change, including those related to our customers that have entered judicial insolvency proceedings, we may revise our cash flow assumptions and record future impairment charges. While we believe that the estimates and related assumptions used in our recoverability assessments are appropriate, actual results could differ from those estimates. Financial Instruments Our financial instruments, other than cash, consist principally of cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and amounts borrowed under financings. The fair value of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable and accounts payable approximates the carrying value of these financial instruments because of their short-term nature. The fair value of our senior notes is estimated using quoted market prices. The fair values of all our other financings are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements. The carrying amounts and fair values of our financial instruments at May 31, 2022 and February 28, 2022 were as follows: May 31, 2022 February 28, 2022 Carrying Amount Fair Value Carrying Fair Value Credit Facilities $ 20,000 $ 20,000 $ 20,000 $ 20,000 Unsecured Term Loan 155,000 152,586 155,000 152,195 Export Credit Agency (“ECA”) Financings — — 21,576 21,931 Bank Financings 647,910 638,242 666,258 675,667 Senior Notes 3,700,000 3,574,154 3,700,000 3,776,997 All our financial instruments are classified as Level 2 except for our senior notes, which are classified as Level 1. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Note 3. Flight Equipment Held for Lease, Net The following table summarizes the activities for the Company’s flight equipment held for lease for the three months ended May 31, 2022: Amount Balance at February 28, 2022 $ 6,313,950 Additions 41,312 Depreciation (81,011) Disposals and transfers to net investment in leases and held for sale (30,606) Impairments (4,428) Balance at May 31, 2022 $ 6,239,217 Accumulated depreciation as of May 31, 2022 $ 2,604,624 Write-off of Russian Aircraft As of May 31, 2022, nine of our aircraft that were previously leased to Russian airlines remain in Russia. We also have one aircraft outside of Russia that is not operational and not in our possession. Most of the operators of these aircraft have continued to fly the aircraft notwithstanding the leasing terminations and our repeated demands for the return of our assets. While we maintain title to the aircraft and will continue to pursue repossession, we determined that it is unlikely we will regain possession of eight of the nine aircraft that remain in Russia. As a result, the Company wrote off the remaining book value of these eight aircraft totaling $4.4 million during three months ended May 31, 2022. These eight aircraft have been removed from the Company’s owned fleet count. The Company is vigorously pursuing insurance claims to recover its losses relating to these aircraft, however, collection, timing and amounts of any insurance recoveries is uncertain. |
Lease Rental Revenues and Fligh
Lease Rental Revenues and Flight Equipment Held for Lease | 3 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Lessor, Operating Leases [Text Block] | Note 4. Lease Rental Revenues Minimum future annual lease rentals contracted to be received under our existing operating leases of flight equipment at May 31, 2022 were as follows: Year Ending February 28/29, Amount (1) 2023 (Remainder of fiscal year) $ 434,816 2024 539,300 2025 434,802 2026 314,749 2027 260,343 Thereafter 745,192 Total $ 2,729,202 _______________ (1) Reflects impact of lessee lease rental deferrals. At May 31, 2022 and February 28, 2022, the amounts of lease incentive liabilities recorded in maintenance payments on our consolidated balance sheets were $18.3 million and $16.5 million, respectively. |
Net Investment in Leases, Net
Net Investment in Leases, Net | 3 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Net Investment in Leases, Net | Net Investment in Leases, Net At May 31, 2022 and February 28, 2022, our net investment in leases consisted of ten and eleven aircraft, respectively. The components of our net investment in leases at May 31, 2022 and February 28, 2022, were as follows: May 31, 2022 February 28, 2022 Lease receivable $ 49,729 $ 52,021 Unguaranteed residual value of flight equipment 100,909 100,068 Net investment leases 150,638 152,089 Allowance for credit losses (2,338) (1,764) Net investment in leases, net $ 148,300 $ 150,325 The activity in the allowance for credit losses related to our net investment in leases for the three months ended May 31, 2022 was as follows: Amount Balance at February 28, 2022 $ 1,764 Provision for credit losses 580 Write-offs (6) Balance at May 31, 2022 $ 2,338 At May 31, 2022, future lease payments on net investment in leases are as follows: Year Ending February 28/29, Amount 2023 (Remainder of fiscal year) $ 7,705 2024 8,973 2025 9,509 2026 8,580 2027 8,292 Thereafter 16,281 Total lease payments to be received 59,340 Present value of lease payments - lease receivable (49,729) Difference between undiscounted lease payments and lease receivable $ 9,611 |
Risks and Uncertainties
Risks and Uncertainties | 3 Months Ended |
May 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure | Note 6. Concentration of Risk The classification of regions in the tables below is based on our customers’ principal place of business. The geographic concentration of our Net Book Value as of May 31, 2022 and February 28, 2022 was as follows: May 31, 2022 February 28, 2022 Region Number Net Book Number Net Book Asia and Pacific 70 32 % 71 32 % Europe 87 28 % 98 30 % Middle East and Africa 10 4 % 10 4 % North America 34 17 % 36 17 % South America 25 13 % 25 13 % Off-lease 15 (1) 6 % 11 (2) 4 % Total 241 100 % 251 100 % _______________ (1) Of the fifteen off-lease aircraft at May 31, 2022, we have one narrow-body aircraft and eight wide-body aircraft which we are currently marketing for lease or sale. (2) Of the eleven off-lease aircraft at February 28, 2022, we have five wide-body aircraft which we are currently marketing for lease or sale. The following table sets forth individual countries representing at least 10% of our Net Book Value as of May 31, 2022 and February 28, 2022: May 31, 2022 February 28, 2022 Country Net Book Net Book Number Net Book Net Book Number India $ 663,307 10% 3 $ 670,523 10% 3 The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows: Three Months Ended May 31, Region 2022 2021 Asia and Pacific 33 % 34 % Europe 29 % 34 % Middle East and Africa 5 % 6 % North America 17 % 14 % South America 16 % 12 % Total 100 % 100 % The following table shows the number of lessees with lease rental revenue of at least 5% of total lease rental revenue and their combined total percentage of lease rental revenue for the periods indicated: Three Months Ended May 31, 2022 2021 Number of Lessees Combined % of Lease Number of Lessees Combined % of Lease Largest lessees by lease rental revenue 4 30% 5 34% For the three months ended May 31, 2022, the Company recognized $25.4 million of maintenance and other revenue, or 14% of our total revenues, related to payments received on maintenance and general security letters of credit from our former Russian lessees. Total revenue attributable to Russia was less than 10% for the three months ended May 31, 2021. For the three months ended May 31, 2022 and 2021, total revenue attributable to India was 12% and 12%, respectively. Judicial Insolvency Proceedings or Similar Protection As of July 8, 2022, three of our customers, to which we lease seventeen aircraft, are subject to judicial insolvency proceedings or similar protection. We have signed restructured lease agreements for fifteen of these aircraft, subject only to the lessees emerging from their respective judicial insolvency processes. |
Unconsolidated Equity Method In
Unconsolidated Equity Method Investment (Notes) | 3 Months Ended |
May 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Unconsolidated Equity Method Investment | Unconsolidated Equity Method Investments We have a joint venture with Mizuho Leasing which has nine aircraft with a net book value of $295.1 million at May 31, 2022. Amount Investment in joint venture at February 28, 2022 $ 38,317 Earnings from joint venture, net of tax 511 Investment in joint venture at May 31, 2022 $ 38,828 On June 30, 2022, the Company received full repayment of the unsecured loan facility it provided to the joint venture in the amount of $1.5 million. |
Borrowings from Secured and Uns
Borrowings from Secured and Unsecured Debt Financings | 3 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
Borrowings from Secured and Unsecured Debt Financings | Borrowings from Secured and Unsecured Debt Financings The outstanding amounts of our secured and unsecured debt financings were as follows: At May 31, 2022 At February 28, 2022 Debt Obligation Outstanding Number of Aircraft Interest Rate Final Stated Outstanding Secured Debt Financings: ECA Financings $ — — —% N/A $ 21,576 Bank Financings (1) 647,910 31 3.00% to 4.55% 06/17/23 to 03/06/25 666,258 Less: Debt issuance costs and discounts (3,147) — (3,795) Total secured debt financings, net of debt issuance costs and discounts 644,763 31 684,039 Unsecured Debt Financings: Senior 5.00% Notes due 2023 500,000 5.00% 04/01/23 500,000 Senior 4.40% Notes due 2023 650,000 4.40% 09/25/23 650,000 Senior Notes due 2024 500,000 4.125% 05/01/24 500,000 Senior Notes due 2025 650,000 5.25% 08/11/25 650,000 Senior Notes due 2026 650,000 4.25% 06/15/26 650,000 Senior Notes due 2028 750,000 2.85% 01/26/28 750,000 Unsecured Term Loans 155,000 2.38% 02/27/24 155,000 Revolving Credit Facilities 20,000 2.21% 06/27/22 to 04/26/25 20,000 Less: Debt issuance costs and discounts (37,896) (39,159) Total unsecured debt financings, net of debt issuance costs and discounts 3,837,104 3,835,841 Total secured and unsecured debt financings, net of debt issuance costs and discounts $ 4,481,867 $ 4,519,880 (1) In May 2022, the Company repaid the principal and accrued interest outstanding under our remaining ECA Financing and incurred early extinguishment costs of $0.5 million. (2) The borrowings under these financings at May 31, 2022 have a weighted-average fixed rate of interest of 3.45%. Unsecured Debt Financings: Revolving Credit Facilities On May 24, 2022, we entered into an amendment for one of our unsecured revolving credit facilities that expanded the size and extended the term of the facility. As a result, the existing $230.0 million commitment was expanded to $280.0 million, with $35.0 million and $245.0 million of the commitment allocated to Tranche B and Tranche C, respectively. Tranche B will mature on February 28, 2023 and Tranche C will mature on May 23, 2025. Tranche A matured on its stated maturity date of December 27, 2021. As of May 31, 2022, we had $20.0 million outstanding under our revolving credit facilities and had $1.4 billion available for borrowing. As of May 31, 2022, we were in compliance with all applicable covenants in our financings. On June 27, 2022, a $100.0 million commitment under one of our unsecured revolving credit facilities, with a total commitment of $1.0 billion, matured on its stated maturity date. The remaining $900.0 million commitment will mature on April 26, 2025. |
Shareholders_ Equity
Shareholders’ Equity | 3 Months Ended |
May 31, 2022 | |
Equity [Abstract] | |
Shareholders’ Equity | Shareholders' EquityOn March 15, 2022, the Company paid a quarterly dividend in the amount of $10.5 million for its Preference Shares, which was approved by the Company’s Board of Directors on January 6, 2022, and accrued as of February 28, 2022. |
Related Party Disclosures
Related Party Disclosures | 3 Months Ended |
May 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsDuring the three months ended May 31, 2022 and 2021, the Company incurred $1.4 million and $1.0 million, respectively, in fees to Marubeni as part of its intra-company service agreement, whereby Marubeni provides certain management and administrative services to the Company. The Company also entered into a parts management services and supply agreement with an affiliate of Marubeni under which we purchased parts totaling $1.7 million and $0.5 million during the three months ended May 31, 2022 and 2021, respectively |
Income Taxes
Income Taxes | 3 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned. The Company received assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035. Consequently, the provision for income taxes relates to income earned by certain subsidiaries of the Company which are located in, or earn income in, jurisdictions that impose income taxes, primarily the United States and Ireland. The sources of income (loss) from continuing operations before income taxes and earnings of our unconsolidated equity method investments for the three months ended May 31, 2022 and 2021 were as follows: Three Months Ended May 31, 2022 2021 U.S. operations $ 5,336 $ 3,711 Non-U.S. operations 5,164 (22,043) Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investments $ 10,500 $ (18,332) Our aircraft-owning subsidiaries generally earn income from sources outside the U.S. and typically are not subject to U.S. federal, state or local income taxes. The aircraft owning subsidiaries resident in the U.S. and Ireland are subject to tax in those respective jurisdictions. We have a U.S.-based subsidiary which provides management services to our subsidiaries and is subject to U.S. federal, state and local income taxes. We also have Ireland and Singapore based subsidiaries which provide management services to our non-U.S. subsidiaries and are subject to tax in those respective jurisdictions. The Company’s effective tax rates (“ETR”) for the three months ended May 31, 2022 and 2021 were 31.7% and 45.2%, respectively. The movement in the ETR is primarily caused by changes in the mix of the Company’s pre-tax earnings/(losses) in its taxable and non-tax jurisdictions. Further, the three months ended May 31, 2021 included a significant decrease in Bermuda income. |
Interest, Net
Interest, Net | 3 Months Ended |
May 31, 2022 | |
Interest Income (Expense), Net [Abstract] | |
Interest Net | Interest, Net The following table shows the components of interest, net: Three Months Ended May 31, 2022 2021 Interest on borrowings and other liabilities $ 47,241 $ 54,033 Amortization of deferred financing fees and debt discount 3,597 4,191 Interest expense 50,838 58,224 Less: Interest income (259) (35) Less: Capitalized interest (285) (152) Interest, net $ 50,294 $ 58,037 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
May 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Rent expense, primarily for the corporate offices and sales and marketing offices, was $0.5 million and $0.4 million for the three months ended May 31, 2022 and 2021, respectively. As of May 31, 2022, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in Stamford, Connecticut; Dublin, Ireland; and Singapore for future minimum lease payments as follows: Year Ending February 28/29, Amount 2023 (Remainder of fiscal year) $ 1,362 2024 1,753 2025 1,784 2026 1,632 2027 1,571 Thereafter 2,412 Total $ 10,514 At May 31, 2022, we had commitments to acquire 23 aircraft for $829.3 million. Commitments, including $63.7 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft, at May 31, 2022, net of amounts already paid, are as follows: Year Ending February 28/29, Amount 2023 (Remainder of fiscal year) $ 472,452 2024 171,258 2025 185,563 2026 — 2027 — Thereafter — Total $ 829,273 |
Other Assets
Other Assets | 3 Months Ended |
May 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets The following table describes the principal components of other assets on our consolidated balance sheets as of May 31, 2022 and February 28, 2022: May 31, February 28, Deferred income tax asset $ 563 $ 570 Lease incentives and lease premiums, net of amortization of $85,234 and $81,553, respectively 50,906 53,513 Flight equipment held for sale 49,059 77,636 Aircraft purchase deposits and Embraer E-2 progress payments 64,293 56,157 Right-of-use asset (1) 5,828 7,176 Deferred rent receivable 51,988 55,478 Other assets 147,699 105,796 Total other assets $ 370,336 $ 356,326 ______________ (1) Net of lease incentives and tenant allowances. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Liabilities | 3 Months Ended |
May 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Liabilities | Accounts Payable, Accrued Expenses and Other Liabilities The following table describes the principal components of accounts payable, accrued expenses and other liabilities recorded our consolidated balance sheets as of May 31, 2022 and February 28, 2022: May 31, February 28, Accounts payable, accrued expenses and other liabilities $ 52,565 $ 58,882 Deferred income tax liability 68,982 66,123 Accrued interest payable 44,690 42,013 Lease liability 8,330 9,846 Lease discounts, net of amortization of $45,355 and $45,546, respectively 398 560 Total accounts payable, accrued expenses and other liabilities $ 174,965 $ 177,424 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda exempted company that was incorporated on October 29, 2004 under the provisions of Section 14 of the Companies Act of 1981 of Bermuda. Aircastle’s business consists of acquiring, leasing, managing and selling commercial jet aircraft. The Company is controlled by affiliates of Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing”). Aircastle is a holding company and conducts its business through subsidiaries that are wholly-owned, either directly or indirectly, by Aircastle. |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements presented are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The accompanying consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. However, we believe that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2022. The consolidated financial statements include the accounts of Aircastle and all its subsidiaries, including any Variable Interest Entity (“VIE”) of which Aircastle is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. We manage and analyze our business and report on our results of operations based on one operating segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker. The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of May 31, 2022, through the date on which the consolidated financial statements included in this Form 10-Q were issued. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. While |
Revenue Recognition Leases, Operating [Policy Text Block] | Lease Revenue Recognition We lease flight equipment under net operating leases with lease terms typically ranging from three In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within other assets. Should we determine that the collectability of rental payments is no longer probable (including any deferral thereof), we will recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue. |
New Accounting Pronouncements, Policy | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform Topic 848 (“ASC 848”), in response to the market transition from the London interbank |
Concentration Risk, Credit Risk, Policy | Risk and Uncertainties In the normal course of business, Aircastle encounters several significant types of economic risk including credit, market, aviation industry and capital market risks. Credit risk is the risk of a lessee’s inability or unwillingness to make contractually required payments and to fulfill its other contractual obligations to Aircastle. Market risk reflects the change in the value of financings due to changes in interest rate spreads or other market factors, including the value of collateral underlying financings. Aviation industry risk is the risk of a downturn in the commercial aviation industry which could adversely impact a lessee’s ability to make payments, increase the risk of early lease terminations and depress lease rates and the value of the Company’s aircraft. Capital market risk is the risk that the Company is unable to obtain capital at reasonable rates to fund the growth of its business or to refinance existing debt facilities. |
Impairment or Disposal of Long-Lived Assets, Policy | Impairment of Flight Equipment We perform an annual recoverability assessment of all aircraft in our fleet, on an aircraft-by-aircraft basis. A recoverability assessment is also performed whenever events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. When we perform a recoverability assessment, we measure whether the estimated future undiscounted net cash flows expected to be generated by the aircraft exceed its net book value. The undiscounted cash flows consist of cash flows from currently contracted lease rental and maintenance payments, future projected lease rates and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft. In the event that an aircraft does not meet the recoverability test, the aircraft will be adjusted to fair value, resulting in an impairment charge. See Note 2 in the Notes to Unaudited Consolidated Financial Statements. Management develops the assumptions used in the recoverability analysis based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third party industry sources. The factors considered in estimating the undiscounted cash flows are impacted by changes in future periods due to changes in projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors, such as the location of the aircraft and accessibility to records and technical documentation. We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value assets and liabilities measured on recurring basis | The following tables set forth our financial assets as of May 31, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Fair Value Measurements at May 31, 2022 Using Fair Value Hierarchy Fair Value as of May 31, 2022 Quoted Prices Significant Significant Valuation Assets: Cash and cash equivalents $ 241,030 $ 241,030 $ — $ — Market Restricted cash and cash equivalents 650 650 — — Market Total $ 241,680 $ 241,680 $ — $ — Fair Value Measurements at February 28, 2022 Using Fair Value Hierarchy Fair Value as of February 28, 2022 Quoted Prices Significant Significant Valuation Assets: Cash and cash equivalents $ 167,891 $ 167,891 $ — $ — Market Restricted cash and cash equivalents 2,791 2,791 — — Market Total $ 170,682 $ 170,682 $ — $ — |
Carrying amounts and fair values of financial instruments | The carrying amounts and fair values of our financial instruments at May 31, 2022 and February 28, 2022 were as follows: May 31, 2022 February 28, 2022 Carrying Amount Fair Value Carrying Fair Value Credit Facilities $ 20,000 $ 20,000 $ 20,000 $ 20,000 Unsecured Term Loan 155,000 152,586 155,000 152,195 Export Credit Agency (“ECA”) Financings — — 21,576 21,931 Bank Financings 647,910 638,242 666,258 675,667 Senior Notes 3,700,000 3,574,154 3,700,000 3,776,997 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment, Lessor Asset under Operating Lease | The following table summarizes the activities for the Company’s flight equipment held for lease for the three months ended May 31, 2022: Amount Balance at February 28, 2022 $ 6,313,950 Additions 41,312 Depreciation (81,011) Disposals and transfers to net investment in leases and held for sale (30,606) Impairments (4,428) Balance at May 31, 2022 $ 6,239,217 Accumulated depreciation as of May 31, 2022 $ 2,604,624 |
Lease Rental Revenues and Fli_2
Lease Rental Revenues and Flight Equipment Held for Lease (Tables) | 3 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | Minimum future annual lease rentals contracted to be received under our existing operating leases of flight equipment at May 31, 2022 were as follows: Year Ending February 28/29, Amount (1) 2023 (Remainder of fiscal year) $ 434,816 2024 539,300 2025 434,802 2026 314,749 2027 260,343 Thereafter 745,192 Total $ 2,729,202 _______________ (1) Reflects impact of lessee lease rental deferrals. |
Net Investment in Leases, Net (
Net Investment in Leases, Net (Tables) | 3 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Schedule of Components of Net Investment in Leases | The components of our net investment in leases at May 31, 2022 and February 28, 2022, were as follows: May 31, 2022 February 28, 2022 Lease receivable $ 49,729 $ 52,021 Unguaranteed residual value of flight equipment 100,909 100,068 Net investment leases 150,638 152,089 Allowance for credit losses (2,338) (1,764) Net investment in leases, net $ 148,300 $ 150,325 |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | The activity in the allowance for credit losses related to our net investment in leases for the three months ended May 31, 2022 was as follows: Amount Balance at February 28, 2022 $ 1,764 Provision for credit losses 580 Write-offs (6) Balance at May 31, 2022 $ 2,338 At May 31, 2022, future lease payments on net investment in leases are as follows: Year Ending February 28/29, Amount 2023 (Remainder of fiscal year) $ 7,705 2024 8,973 2025 9,509 2026 8,580 2027 8,292 Thereafter 16,281 Total lease payments to be received 59,340 Present value of lease payments - lease receivable (49,729) Difference between undiscounted lease payments and lease receivable $ 9,611 |
Risks and Uncertainties (Tables
Risks and Uncertainties (Tables) | 3 Months Ended |
May 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Long-lived Assets by Geographic Areas [Table Text Block] | The geographic concentration of our Net Book Value as of May 31, 2022 and February 28, 2022 was as follows: May 31, 2022 February 28, 2022 Region Number Net Book Number Net Book Asia and Pacific 70 32 % 71 32 % Europe 87 28 % 98 30 % Middle East and Africa 10 4 % 10 4 % North America 34 17 % 36 17 % South America 25 13 % 25 13 % Off-lease 15 (1) 6 % 11 (2) 4 % Total 241 100 % 251 100 % _______________ (1) Of the fifteen off-lease aircraft at May 31, 2022, we have one narrow-body aircraft and eight wide-body aircraft which we are currently marketing for lease or sale. (2) Of the eleven off-lease aircraft at February 28, 2022, we have five wide-body aircraft which we are currently marketing for lease or sale. |
Revenue from External Customers by Geographic Areas [Table Text Block] | The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows: Three Months Ended May 31, Region 2022 2021 Asia and Pacific 33 % 34 % Europe 29 % 34 % Middle East and Africa 5 % 6 % North America 17 % 14 % South America 16 % 12 % Total 100 % 100 % |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | The following table shows the number of lessees with lease rental revenue of at least 5% of total lease rental revenue and their combined total percentage of lease rental revenue for the periods indicated: Three Months Ended May 31, 2022 2021 Number of Lessees Combined % of Lease Number of Lessees Combined % of Lease Largest lessees by lease rental revenue 4 30% 5 34% |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block] | The following table sets forth individual countries representing at least 10% of our Net Book Value as of May 31, 2022 and February 28, 2022: May 31, 2022 February 28, 2022 Country Net Book Net Book Number Net Book Net Book Number India $ 663,307 10% 3 $ 670,523 10% 3 |
Unconsolidated Equity Method _2
Unconsolidated Equity Method Investment (Tables) | 3 Months Ended |
May 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Amount Investment in joint venture at February 28, 2022 $ 38,317 Earnings from joint venture, net of tax 511 Investment in joint venture at May 31, 2022 $ 38,828 |
Borrowings from Secured and U_2
Borrowings from Secured and Unsecured Debt Financings (Tables) | 3 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
Outstanding amounts of secured and unsecured term debt financings | The outstanding amounts of our secured and unsecured debt financings were as follows: At May 31, 2022 At February 28, 2022 Debt Obligation Outstanding Number of Aircraft Interest Rate Final Stated Outstanding Secured Debt Financings: ECA Financings $ — — —% N/A $ 21,576 Bank Financings (1) 647,910 31 3.00% to 4.55% 06/17/23 to 03/06/25 666,258 Less: Debt issuance costs and discounts (3,147) — (3,795) Total secured debt financings, net of debt issuance costs and discounts 644,763 31 684,039 Unsecured Debt Financings: Senior 5.00% Notes due 2023 500,000 5.00% 04/01/23 500,000 Senior 4.40% Notes due 2023 650,000 4.40% 09/25/23 650,000 Senior Notes due 2024 500,000 4.125% 05/01/24 500,000 Senior Notes due 2025 650,000 5.25% 08/11/25 650,000 Senior Notes due 2026 650,000 4.25% 06/15/26 650,000 Senior Notes due 2028 750,000 2.85% 01/26/28 750,000 Unsecured Term Loans 155,000 2.38% 02/27/24 155,000 Revolving Credit Facilities 20,000 2.21% 06/27/22 to 04/26/25 20,000 Less: Debt issuance costs and discounts (37,896) (39,159) Total unsecured debt financings, net of debt issuance costs and discounts 3,837,104 3,835,841 Total secured and unsecured debt financings, net of debt issuance costs and discounts $ 4,481,867 $ 4,519,880 (1) In May 2022, the Company repaid the principal and accrued interest outstanding under our remaining ECA Financing and incurred early extinguishment costs of $0.5 million. (2) The borrowings under these financings at May 31, 2022 have a weighted-average fixed rate of interest of 3.45%. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Sources of income from continuing operations before income taxes | The sources of income (loss) from continuing operations before income taxes and earnings of our unconsolidated equity method investments for the three months ended May 31, 2022 and 2021 were as follows: Three Months Ended May 31, 2022 2021 U.S. operations $ 5,336 $ 3,711 Non-U.S. operations 5,164 (22,043) Income (loss) from continuing operations before income taxes and earnings of unconsolidated equity method investments $ 10,500 $ (18,332) |
Interest, Net (Tables)
Interest, Net (Tables) | 3 Months Ended |
May 31, 2022 | |
Interest Income (Expense), Net [Abstract] | |
Components of Interest | The following table shows the components of interest, net: Three Months Ended May 31, 2022 2021 Interest on borrowings and other liabilities $ 47,241 $ 54,033 Amortization of deferred financing fees and debt discount 3,597 4,191 Interest expense 50,838 58,224 Less: Interest income (259) (35) Less: Capitalized interest (285) (152) Interest, net $ 50,294 $ 58,037 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
May 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of obligations under non-cancelable operating leases | As of May 31, 2022, Aircastle is obligated under non-cancelable operating leases relating principally to office facilities in Stamford, Connecticut; Dublin, Ireland; and Singapore for future minimum lease payments as follows: Year Ending February 28/29, Amount 2023 (Remainder of fiscal year) $ 1,362 2024 1,753 2025 1,784 2026 1,632 2027 1,571 Thereafter 2,412 Total $ 10,514 |
Long-term Purchase Commitment | Commitments, including $63.7 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft, at May 31, 2022, net of amounts already paid, are as follows: Year Ending February 28/29, Amount 2023 (Remainder of fiscal year) $ 472,452 2024 171,258 2025 185,563 2026 — 2027 — Thereafter — Total $ 829,273 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
May 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Principal components of other assets | The following table describes the principal components of other assets on our consolidated balance sheets as of May 31, 2022 and February 28, 2022: May 31, February 28, Deferred income tax asset $ 563 $ 570 Lease incentives and lease premiums, net of amortization of $85,234 and $81,553, respectively 50,906 53,513 Flight equipment held for sale 49,059 77,636 Aircraft purchase deposits and Embraer E-2 progress payments 64,293 56,157 Right-of-use asset (1) 5,828 7,176 Deferred rent receivable 51,988 55,478 Other assets 147,699 105,796 Total other assets $ 370,336 $ 356,326 ______________ (1) Net of lease incentives and tenant allowances. |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
May 31, 2022 | |
Payables and Accruals [Abstract] | |
Principal components of accounts payable, accrued expenses and other liabilities recorded on our consolidated balance sheet | The following table describes the principal components of accounts payable, accrued expenses and other liabilities recorded our consolidated balance sheets as of May 31, 2022 and February 28, 2022: May 31, February 28, Accounts payable, accrued expenses and other liabilities $ 52,565 $ 58,882 Deferred income tax liability 68,982 66,123 Accrued interest payable 44,690 42,013 Lease liability 8,330 9,846 Lease discounts, net of amortization of $45,355 and $45,546, respectively 398 560 Total accounts payable, accrued expenses and other liabilities $ 174,965 $ 177,424 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) | 3 Months Ended |
May 31, 2022 segment | |
Accounting Policies [Line Items] | |
Number of Operating Segments | 1 |
Percentage of Fleet Having Floating-rate Lease Rentals | 1% |
Percentage of Interest Expense Derived from Floating-rate Debt | 5% |
Minimum | Property Subject to Operating Lease | Flight Equipment | |
Accounting Policies [Line Items] | |
Lessor, Operating Lease, Term of Contract | 3 years |
Maximum | Property Subject to Operating Lease | Flight Equipment | |
Accounting Policies [Line Items] | |
Lessor, Operating Lease, Term of Contract | 7 years |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash and cash equivalents | $ 241,030 | $ 167,891 |
Restricted cash and cash equivalents | 650 | 2,791 |
Total | 241,680 | 170,682 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Total | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 |
Total | 0 | 0 |
Estimate of Fair Value Measurement | ||
Assets: | ||
Cash and cash equivalents | 241,030 | 167,891 |
Restricted cash and cash equivalents | 650 | 2,791 |
Total | $ 241,680 | $ 170,682 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | |
May 31, 2022 USD ($) | May 31, 2021 USD ($) aircraft | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | $ 0 | |
Impairment of flight equipment | 4,428 | $ 20,583 |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 175,564 | 165,810 |
Fair Value Disclosures [Text Block] | Fair Value Measurements Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. The following tables set forth our financial assets as of May 31, 2022 and February 28, 2022 that we measured at fair value on a recurring basis by level within the fair value hierarchy. Assets measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Fair Value Measurements at May 31, 2022 Using Fair Value Hierarchy Fair Value as of May 31, 2022 Quoted Prices Significant Significant Valuation Assets: Cash and cash equivalents $ 241,030 $ 241,030 $ — $ — Market Restricted cash and cash equivalents 650 650 — — Market Total $ 241,680 $ 241,680 $ — $ — Fair Value Measurements at February 28, 2022 Using Fair Value Hierarchy Fair Value as of February 28, 2022 Quoted Prices Significant Significant Valuation Assets: Cash and cash equivalents $ 167,891 $ 167,891 $ — $ — Market Restricted cash and cash equivalents 2,791 2,791 — — Market Total $ 170,682 $ 170,682 $ — $ — Our cash and cash equivalents and our restricted cash and cash equivalents consist largely of money market securities that are highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. For the three months ended May 31, 2022, we had no transfers into or out of Level 3. We measure the fair value of certain assets and liabilities on a non-recurring basis, when U.S. GAAP requires the application of fair value, including events or changes in circumstances that indicate the carrying amounts of these assets may not be recoverable. Assets subject to these measurements include our aircraft and investment in unconsolidated joint venture. We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value measurements for aircraft in impairment tests are based on the average of the market approach that uses Level 2 inputs, which include third party appraisal data and an income approach that uses Level 3 inputs, which include the Company’s assumptions and appraisal data as to future cash proceeds from leasing and selling aircraft discounted using the Company’s weighted average cost of capital. We account for our investment in unconsolidated joint ventures under the equity method of accounting. Investments are recorded at cost and are adjusted by undistributed earnings and losses and the distributions of dividends and capital. These investments are reviewed for impairment whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary. Aircraft Valuation Impairment of Flight Equipment During the three months ended May 31, 2022, the Company wrote off the remaining book value of eight narrow-body aircraft in Russia which have not been returned to us totaling $4.4 million. While we maintain title to the aircraft and will continue to pursue repossession, we determined that it is unlikely we will regain possession of these eight aircraft – see Note 3 in the Notes to Unaudited Consolidated Financial Statements. The Company recognized $1.5 million of other revenue for these aircraft related to payments received on letters of credit. During the three months ended May 31, 2021, the Company recorded transactional impairment charges totaling $20.6 million which related to two narrow-body aircraft and were the result of an early lease termination and a scheduled lease expiration. The Company recognized $21.1 million of maintenance revenue for these two aircraft. Annual Recoverability Assessment We plan to perform our annual recoverability assessment of all our aircraft during the third quarter of 2022. We continue to closely monitor the impact of recent crises, such as the Russian invasion of Ukraine and the COVID-19 pandemic, on our customers, air traffic, lease rental rates, and aircraft valuations, and have and will continue to perform additional customer and aircraft specific reviews should changes in facts and circumstances arise that may impact the recoverability of our aircraft. We have and will focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to the impact of the above crises and value deterioration. The recoverability assessment is a comparison of the carrying value of each aircraft to its estimated undiscounted future cash flows. We develop the assumptions used in the recoverability assessment, including those relating to current and future demand for each aircraft type, based on management’s experience in the aircraft leasing industry, as well as information received from third-party sources. Estimates of the undiscounted cash flows for each aircraft type are impacted by changes in contracted and future expected lease rates, residual values, expected scrap values, economic conditions and other factors, such as the location of the aircraft and accessibility to records and technical documentation. If our estimates or assumptions change, including those related to our customers that have entered judicial insolvency proceedings, we may revise our cash flow assumptions and record future impairment charges. While we believe that the estimates and related assumptions used in our recoverability assessments are appropriate, actual results could differ from those estimates. Financial Instruments Our financial instruments, other than cash, consist principally of cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and amounts borrowed under financings. The fair value of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable and accounts payable approximates the carrying value of these financial instruments because of their short-term nature. The fair value of our senior notes is estimated using quoted market prices. The fair values of all our other financings are estimated using a discounted cash flow analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements. The carrying amounts and fair values of our financial instruments at May 31, 2022 and February 28, 2022 were as follows: May 31, 2022 February 28, 2022 Carrying Amount Fair Value Carrying Fair Value Credit Facilities $ 20,000 $ 20,000 $ 20,000 $ 20,000 Unsecured Term Loan 155,000 152,586 155,000 152,195 Export Credit Agency (“ECA”) Financings — — 21,576 21,931 Bank Financings 647,910 638,242 666,258 675,667 Senior Notes 3,700,000 3,574,154 3,700,000 3,776,997 All our financial instruments are classified as Level 2 except for our senior notes, which are classified as Level 1. | |
RUSSIAN FEDERATION | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Proceeds from Lines of Credit | $ 1,500 | |
Maintenance and Security Deposit [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 21,100 | |
Maintenance revenue | RUSSIAN FEDERATION | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 25,400 | |
Wide-body [Member] | Maintenance revenue | RUSSIAN FEDERATION | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 23,900 | |
Transactional | Narrow-body [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Number of aircrafts impaired | aircraft | 2 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
Unsecured Debt | Significant Other Observable Inputs (Level 2) | Reported Value Measurement | Revolving Credit Facility | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 20,000 | $ 20,000 |
Unsecured Debt | Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | Revolving Credit Facility | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 20,000 | 20,000 |
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Reported Value Measurement | DBJ Term Loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 155,000 | 155,000 |
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Reported Value Measurement | Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 3,700,000 | 3,700,000 |
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Estimate of Fair Value Measurement | DBJ Term Loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 152,586 | 152,195 |
Unsecured Debt | Quoted Prices in Active Markets for Identical Assets (Level 1) | Estimate of Fair Value Measurement | Senior Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 3,574,154 | 3,776,997 |
Secured Debt | Significant Other Observable Inputs (Level 2) | Reported Value Measurement | ECA Term Financings | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 0 | 21,576 |
Secured Debt | Significant Other Observable Inputs (Level 2) | Reported Value Measurement | Bank Financings | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 647,910 | 666,258 |
Secured Debt | Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | ECA Term Financings | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | 0 | 21,931 |
Secured Debt | Significant Other Observable Inputs (Level 2) | Estimate of Fair Value Measurement | Bank Financings | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 638,242 | $ 675,667 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
May 31, 2022 USD ($) aircraft | May 31, 2021 USD ($) | Feb. 28, 2022 USD ($) | |
Property, Plant and Equipment [Abstract] | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation | $ 6,239,217 | $ 6,313,950 | |
Impairment of flight equipment | 4,428 | $ 20,583 | |
Depreciation | 81,318 | 82,391 | |
Transfers from flight equipment held for lease to Net investment in leases and Other assets | 17,734 | 3,554 | |
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Depreciation | $ 81,318 | $ 82,391 | |
Percentage of geographic concentration | 100% | 100% | 100% |
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation | $ 6,239,217 | $ 6,313,950 | |
Transfers from flight equipment held for lease to Net investment in leases and Other assets | 17,734 | $ 3,554 | |
Impairment of flight equipment | 4,428 | 20,583 | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 175,564 | $ 165,810 | |
Customers Leasing Aircraft in Russia and Ukraine | Net Book Value | Geographic Concentration Risk | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Percentage of geographic concentration | 1% | ||
RUSSIAN FEDERATION | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Letters of Credit Outstanding, Amount | $ 24,100 | ||
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Number of Aircraft on Lease with Russian Airlines | aircraft | 9 | ||
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION | Wide-body [Member] | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Number of Aircraft on Lease with Russian Airlines | aircraft | 2 | ||
Aircraft Remaining in Country of Base Operations | RUSSIAN FEDERATION | Russian Invasion of Ukraine | Narrow-body [Member] | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Number of Aircraft on Lease with Russian Airlines | aircraft | 8 | ||
Aircraft Outside Country of Base Operations | RUSSIAN FEDERATION | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Number of Aircraft on Lease with Russian Airlines | aircraft | 1 | ||
Flight Equipment | |||
Property, Plant and Equipment [Abstract] | |||
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation | $ 6,239,217 | 6,313,950 | |
Property, Plant and Equipment, Additions | 41,312 | ||
Property, Plant, and Equipment, Lessor Asset under Operating Lease, Accumulated Depreciation | 2,604,624 | ||
Impairment of flight equipment | 4,428 | ||
Depreciation | 81,011 | ||
Transfers from flight equipment held for lease to Net investment in leases and Other assets | (30,606) | ||
Property, Plant, and Equipment, Lessor Asset under Operating Lease [Line Items] | |||
Property, Plant and Equipment, Additions | 41,312 | ||
Depreciation | 81,011 | ||
Property, Plant, and Equipment, Lessor Asset under Operating Lease, Accumulated Depreciation | 2,604,624 | ||
Property, Plant, and Equipment, Lessor Asset under Operating Lease, after Accumulated Depreciation | 6,239,217 | $ 6,313,950 | |
Transfers from flight equipment held for lease to Net investment in leases and Other assets | (30,606) | ||
Impairment of flight equipment | $ 4,428 |
Lease Rental Revenues and Fli_3
Lease Rental Revenues and Flight Equipment Held for Lease (Details) $ in Thousands | May 31, 2022 USD ($) |
Annual future minimum lease rentals receivable | |
2023 (Remainder of fiscal year) | $ 434,816 |
2024 | 539,300 |
2025 | 434,802 |
2026 | 314,749 |
2027 | 260,343 |
Thereafter | 745,192 |
Total | $ 2,729,202 |
Lease Rental Revenues and Fli_4
Lease Rental Revenues and Flight Equipment Held for Lease (Details Textual) - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
Maintenance Payments | ||
Revenue, Major Customer [Line Items] | ||
Lease incentive liabilities | $ 18,300 | $ 16,500 |
Net Investment in Leases, Net_2
Net Investment in Leases, Net (Details Textual) - aircraft | May 31, 2022 | Feb. 28, 2022 |
Leases [Abstract] | ||
Net Investment in Lease, Number of Leased Assets | 10 | 11 |
Net Investment in Leases, Net_3
Net Investment in Leases, Net (Details 2) - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
Capital Leases, Net Investment in Direct Financing Leases [Abstract] | ||
Lease receivable | $ 49,729 | $ 52,021 |
Unguaranteed residual value of flight equipment | 100,909 | 100,068 |
Net investment leases | 150,638 | 152,089 |
Allowance for credit losses | (2,338) | (1,764) |
Net investment in leases, net | 148,300 | $ 150,325 |
Receivable in Remainder of Fiscal Year | 7,705 | |
Receivable in Year Two | 8,973 | |
Receivable in Year Three | 9,509 | |
Receivable in Year Four | 8,580 | |
Receivable in Year Five | 8,292 | |
Thereafter | 16,281 | |
Total | 59,340 | |
Present value of lease payments - lease receivable | (49,729) | |
Difference between undiscounted lease payments and lease receivable | $ 9,611 |
Net Investment in Leases, Net -
Net Investment in Leases, Net - Credit Loss Rollforward (Details) $ in Thousands | 3 Months Ended |
May 31, 2022 USD ($) | |
Net Investment in Lease, Allowance for Credit Loss [Roll Forward] | |
Balance at February 28, 2022 | $ 1,764 |
Provision for credit losses | 580 |
Write-offs | (6) |
Balance at May 31, 2022 | $ 2,338 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 08, 2022 aircraft Lessee | May 31, 2022 USD ($) aircraft Lessee | May 31, 2021 USD ($) Lessee | Feb. 28, 2022 USD ($) aircraft Lessee | |
Concentration Risk [Line Items] | ||||
Property Subject To Or Available for Operating Lease, Number of Units1 | 241 | 251 | ||
Percentage of geographic concentration | 100% | 100% | 100% | |
Number of Offlease Aircraft Marketed for Lease or Sale | 11 | |||
Number of Offlease Aircraft Marketed for Lease | 15 | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ | $ 175,564 | $ 165,810 | ||
Asia Pacific [Member] | ||||
Concentration Risk [Line Items] | ||||
Property Subject To Or Available for Operating Lease, Number of Units1 | 70 | 71 | ||
Europe [Member] | ||||
Concentration Risk [Line Items] | ||||
Property Subject To Or Available for Operating Lease, Number of Units1 | 87 | 98 | ||
Middle East and Africa [Member] | ||||
Concentration Risk [Line Items] | ||||
Property Subject To Or Available for Operating Lease, Number of Units1 | 10 | 10 | ||
North America [Member] | ||||
Concentration Risk [Line Items] | ||||
Property Subject To Or Available for Operating Lease, Number of Units1 | 34 | 36 | ||
South America [Member] | ||||
Concentration Risk [Line Items] | ||||
Property Subject To Or Available for Operating Lease, Number of Units1 | 25 | 25 | ||
RUSSIAN FEDERATION | Maintenance revenue | ||||
Concentration Risk [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ | $ 25,400 | |||
INDIA | ||||
Concentration Risk [Line Items] | ||||
Net Investment in Lease and Net Book Value of Equipment held for Lease | $ | $ 663,307 | $ 670,523 | ||
property subject to or available for operating lease, net (percentage) | 10% | 10% | ||
number of lessees | Lessee | 3,000 | 3 | ||
Geographic Concentration Risk [Member] | Net Book Value | Off Lease | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 6% | 4% | ||
Geographic Concentration Risk [Member] | Net Book Value | Asia Pacific [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 32% | 32% | ||
Geographic Concentration Risk [Member] | Net Book Value | Europe [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 28% | 30% | ||
Geographic Concentration Risk [Member] | Net Book Value | Middle East and Africa [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 4% | 4% | ||
Geographic Concentration Risk [Member] | Net Book Value | North America [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 17% | 17% | ||
Geographic Concentration Risk [Member] | Net Book Value | South America [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 13% | 13% | ||
Geographic Concentration Risk [Member] | Lease Rental Revenue | Asia Pacific [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 33% | 34% | ||
Geographic Concentration Risk [Member] | Lease Rental Revenue | Europe [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 29% | 34% | ||
Geographic Concentration Risk [Member] | Lease Rental Revenue | Middle East and Africa [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 5% | 6% | ||
Geographic Concentration Risk [Member] | Lease Rental Revenue | North America [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 17% | 14% | ||
Geographic Concentration Risk [Member] | Lease Rental Revenue | South America [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 16% | 12% | ||
Geographic Concentration Risk [Member] | Total Revenue [Member] | RUSSIAN FEDERATION | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 14% | |||
Geographic Concentration Risk [Member] | Total Revenue [Member] | INDIA | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 12% | 12% | ||
Subsequent Event [Member] | ||||
Concentration Risk [Line Items] | ||||
Number Of Customers Entering Bankruptcy | Lessee | 3 | |||
Number of Aircrafts Leased to Bankrupt Customers | 17 | |||
Major Customer Group One [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Number of Customers in Major Customer Group | Lessee | 4 | 5 | ||
Major Customer Group One [Member] | Geographic Concentration Risk | Lease Rental Revenue | ||||
Concentration Risk [Line Items] | ||||
Percentage of geographic concentration | 30% | 34% | ||
Wide-body [Member] | RUSSIAN FEDERATION | Maintenance revenue | ||||
Concentration Risk [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ | $ 23,900 | |||
Wide-body [Member] | Subsequent Event [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Offlease Aircraft Marketed for Lease or Sale | 8 | |||
Wide-body [Member] | Number of Off-lease Aircraft Marketed for Lease or Sale from Prior Year [Member] | Subsequent Event [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Offlease Aircraft Marketed for Lease or Sale | 5 | |||
Narrow-body [Member] | Subsequent Event [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Offlease Aircraft Marketed for Lease or Sale | 1 | |||
Total wide-body and narrow-body [Member] | Customers in Bankruptcy Proceedings [Member] | Subsequent Event [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Aircraft Leased to Bankrupt Customer with Signed Restructured Lease Agreements | 15 |
Unconsolidated Equity Method _3
Unconsolidated Equity Method Investment (Details) $ in Thousands | 3 Months Ended | |||
May 31, 2022 USD ($) aircraft | May 31, 2021 USD ($) | Jun. 30, 2022 USD ($) | Feb. 28, 2022 USD ($) | |
Unconsolidated equity method investments | $ 38,828 | $ 38,317 | ||
Earnings of unconsolidated equity method investments, net of tax | 511 | $ 287 | ||
Borrowings from unsecured financings, net | $ 3,837,104 | $ 3,835,841 | ||
Mizuho Leasing (2021) Unsecured Loan Facility (JV) | Unsecured Debt | Subsequent Event [Member] | Corporate Joint Venture | ||||
Borrowings from unsecured financings, net | $ 1,500 | |||
Equity Method Investee | ||||
Total number of aircraft owned by joint ventures | aircraft | 9 | |||
Net Investment in Lease and Net Book Value of Equipment held for Lease | $ 295,100 |
Borrowings from Secured and U_3
Borrowings from Secured and Unsecured Debt Financings (Details) $ in Thousands | 3 Months Ended | ||
May 31, 2022 USD ($) aircraft | May 31, 2021 USD ($) | Feb. 28, 2022 USD ($) | |
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from secured financings | $ 644,763 | $ 684,039 | |
Number of Aircraft Financed | aircraft | 31 | ||
Borrowings from unsecured financings, net | $ 3,837,104 | 3,835,841 | |
Total secured and unsecured debt financings | 4,481,867 | 4,519,880 | |
Payment for Debt Extinguishment or Debt Prepayment Cost | 291 | $ 24 | |
Line of Credit | Revolving Credit Facility | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | 20,000 | ||
ECA Term Financings | Notes Payable, Other Payables | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from secured financings | $ 0 | 21,576 | |
Interest rate | 0% | ||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 500 | ||
ECA Term Financings | Secured Debt | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Number of Aircraft Financed | aircraft | 0 | ||
Bank Financings | Notes Payable, Other Payables | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Debt, Weighted Average Interest Rate | 3.45% | ||
Bank Financings | Notes Payable to Banks | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from secured financings | $ 647,910 | 666,258 | |
Bank Financings | Notes Payable to Banks | Minimum | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Interest rate | 3% | ||
Bank Financings | Notes Payable to Banks | Maximum | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Interest rate | 4.55% | ||
Bank Financings | Secured Debt | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Number of Aircraft Financed | aircraft | 31 | ||
Secured Debt | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Debt Issuance Cost | $ (3,147) | (3,795) | |
Senior Notes Due 2023 | Senior Notes | 5.00 | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 500,000 | 500,000 | |
Interest rate | 5% | ||
Senior Notes Due 2023 | Senior Notes | 4.40% | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 650,000 | 650,000 | |
Interest rate | 4.40% | ||
Senior Notes Due 2024 | Senior Notes | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 500,000 | 500,000 | |
Interest rate | 4.125% | ||
Senior Notes Due 2025 [Member] | Senior Notes | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 650,000 | 650,000 | |
Interest rate | 5.25% | ||
Senior Notes Due 2026 [Member] | Senior Notes | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 650,000 | 650,000 | |
Senior Notes Due 2026 [Member] | Senior Notes | 4.25% [Member] | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Interest rate | 4.25% | ||
Senior Notes Due 2028 | Senior Notes | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 750,000 | 750,000 | |
Senior Notes Due 2028 | Senior Notes | 2.85% | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Interest rate | 2.85% | ||
Floating Rate Term Loan | Notes Payable to Banks | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Interest rate | 2.38% | ||
Floating Rate Term Loan | Floating Rate Term Loan | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Borrowings from unsecured financings, net | $ 155,000 | 155,000 | |
Revolving Credit Facility | Notes Payable to Banks | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Interest rate | 2.21% | ||
2013 Revolving Credit Facility | Line of Credit | Revolving Credit Facility | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 20,000 | ||
Unsecured Debt | |||
Outstanding amounts of secured and unsecured term debt financings | |||
Debt Issuance Cost | $ (37,896) | $ (39,159) |
Borrowings from Secured and U_4
Borrowings from Secured and Unsecured Debt Financings (Details Textual) - USD ($) | 3 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 24, 2022 | |
Debt Instrument [Line Items] | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,400,000,000 | ||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 291,000 | $ 24,000 | |
ECA Term Financings | Notes Payable, Other Payables | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 0% | ||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 500,000 | ||
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility Previous Borrowing Capacity | $ 230,000,000 | ||
Line of Credit Facility, Current Borrowing Capacity | 280,000,000 | ||
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit | Tranche B (Revised) ($35mm) - DBS Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | 35,000,000 | ||
Revolving Credit Facility | DBS (2018) Unsecured Revolving Credit Facility | Line of Credit | Tranche C ($245mm) - DBS Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | 245,000,000 | ||
Revolving Credit Facility | 2013 Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility Previous Borrowing Capacity | 1,000,000,000 | ||
Line of Credit Facility, Current Borrowing Capacity | 900,000,000 | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 20,000,000 | ||
Repayments of Lines of Credit | $ 100,000,000 | ||
Revolving Credit Facility | 2013 Revolving Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Individual Debt Instrument at Time of Issuance Part of Overall Portfolio of Revolving Credit Facilities | 1 | ||
Line of Credit | DBS (2018) Unsecured Revolving Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Individual Debt Instrument at Time of Issuance Part of Overall Portfolio of Revolving Credit Facilities | $ 1 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) $ in Thousands | 3 Months Ended |
May 31, 2022 USD ($) | |
Equity [Abstract] | |
Dividends, Preferred Stock | $ 10,500 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Marubeni Service Agreement | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 1,400 | $ 1,000 |
Marubeni Affiliate Parts Management Services and Supply Agreement | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Amounts of Transaction | $ 1,700 | $ 500 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Sources of income from continuing operations before income taxes | ||
U.S. operations | $ 5,336 | $ 3,711 |
Non-U.S. operations | 5,164 | (22,043) |
Income from continuing operations before income taxes and earnings of unconsolidated equity method investments | $ 10,500 | $ (18,332) |
Income Taxes Income Taxes (Text
Income Taxes Income Taxes (Textual) (Details) | 3 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate, Continuing Operations | 31.70% | 45.20% |
Interest, Net (Details)
Interest, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Interest Income (Expense), Net [Abstract] | ||
Interest on borrowings and other liabilities | $ 47,241 | $ 54,033 |
Amortization of deferred financing costs | 3,597 | 4,191 |
Interest expense | 50,838 | 58,224 |
Less: Interest income | (259) | (35) |
Less: Capitalized interest | (285) | (152) |
Interest, net | $ 50,294 | $ 58,037 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | |
May 31, 2022 USD ($) aircraft | May 31, 2021 USD ($) | |
Types of Commercial Aircraft [Line Items] | ||
Rent expense | $ 500 | $ 400 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2023 (Remainder of fiscal year) | 1,362 | |
2024 | 1,753 | |
2025 | 1,784 | |
2026 | 1,632 | |
2027 | 1,571 | |
Thereafter | 2,412 | |
Total | $ 10,514 | |
Committed to acquire aircraft | aircraft | 23 | |
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
2023 (Remainder of fiscal year) | $ 472,452 | |
2024 | 171,258 | |
2025 | 185,563 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Total | 829,273 | |
Pre-Delivery Payments | ||
Purchase Obligation, Fiscal Year Maturity [Abstract] | ||
Total | $ 63,700 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
Principal components of other assets | ||
Deferred income tax asset | $ 563 | $ 570 |
Lease incentives and lease premiums, net of amortization of $85,234 and $81,553, respectively | 50,906 | 53,513 |
Flight equipment held for sale | 49,059 | 77,636 |
Aircraft purchase deposits and Embraer E-2 progress payments | 64,293 | 56,157 |
Right-of-use asset | 5,828 | 7,176 |
Deferred rent receivable | 51,988 | 55,478 |
Other assets | 147,699 | 105,796 |
Total other assets | 370,336 | 356,326 |
Lease Incentives and Lease Premiums, Accumulated Amortization | $ 85,234 | $ 81,553 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | May 31, 2022 | Feb. 28, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable, accrued expenses and other liabilities | $ 52,565 | $ 58,882 |
Deferred income tax liability | 68,982 | 66,123 |
Accrued interest payable | 44,690 | 42,013 |
Lease liability | 8,330 | 9,846 |
Lease discounts, net of amortization of $45,355 and $45,546, respectively | 398 | 560 |
Total accounts payable, accrued expenses and other liabilities | 174,965 | 177,424 |
Deferred Lease Income, Accumulated Amortization | $ 45,355 | $ 45,546 |