UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended February 28, 2026
or
☐Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
Commission file number 001-32959
AIRCASTLE LIMITED
(Exact name of Registrant as Specified in its Charter)
Bermuda98-0444035
(State or other Jurisdiction of
Incorporation or organization)		(I.R.S. Employer
Identification No.)
c/o Aircastle Advisor LLC
201 Tresser Boulevard, Suite 400
Stamford
Connecticut
06901
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code:    (203) 504-1020
______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Shares, par value $0.01 per shareN/ANONE
Preference Shares, par value $0.01 per shareN/ANONE
Securities registered pursuant to Section 12(g) of the Act:    None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ¨    No  þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  þ    No  ¨
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨Accelerated filer¨
Non-accelerated filerþSmaller reporting company¨
Emerging growth company¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.¨
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  þ
The aggregate market value of the Registrant’s Common Shares based upon the closing price on the New York Stock Exchange on August 31, 2025 (the last business day of registrant’s most recently completed second fiscal quarter), beneficially owned by non-affiliates of the Registrant was $0 because the Registrant’s Common Shares were not publicly traded as of that date. For purposes of the foregoing calculation, which is required by Form 10-K, the Registrant has included in the shares owned by affiliates those shares owned by directors and executive officers and shareholders owning 10% or more of the outstanding common shares of the Registrant, and such inclusion shall not be construed as an admission that any such person is an affiliate for any purpose.
As of April 14, 2026, there were 17,840 outstanding shares of the registrant’s common shares, par value $0.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE
None.



TABLE OF CONTENTS

  Page  
PART I
Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
E - 5
S - 1




SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
All statements included or incorporated by reference in this Annual Report on Form 10-K (this “Annual Report”), other than characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not necessarily limited to, statements relating to our ability to acquire, sell, lease or finance aircraft, raise capital, pay dividends and increase revenues, earnings, EBITDA and Adjusted EBITDA and the global aviation industry and aircraft leasing sector. Words such as “anticipates,” “expects,” “enables,” “intends,” “plans,” “positions,” “projects,” “believes,” “may,” “will,” “would,” “could,” “should,” “seeks,” “estimates” and variations on these words and similar expressions are intended to identify such forward-looking statements. These statements are based on our historical performance and that of our subsidiaries and on our current plans, estimates and expectations and are subject to a number of factors that could lead to actual results being materially different from those described in the forward-looking statements; Aircastle can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any such forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this Annual Report. These risks or uncertainties include, but are not limited to, those described from time to time in Aircastle’s filings with the Securities and Exchange Commission (“SEC”), including as described in Item 1A, and elsewhere in this Annual Report. In addition, new risks and uncertainties emerge from time to time, and it is not possible for Aircastle to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this Annual Report. Aircastle expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.
WEBSITE AND ACCESS TO COMPANY’S REPORTS
The Company’s Internet website can be found at www.aircastle.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished with the SEC are available free of charge through our website under “Investors — SEC Filings.”
Our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Board of Directors committee charters (including the charters of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee) are available free of charge through our website under “ESG.” In addition, our Code of Ethics for the Chief Executive and Senior Financial Officers, which applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Treasurer, is available in print, free of charge, to any shareholder upon request to Investor Relations, Aircastle Limited, c/o Aircastle Advisor LLC, 201 Tresser Boulevard, Suite 400, Stamford, Connecticut 06901.
The information on the Company’s website is not part of, or incorporated by reference, into this Annual Report, or any other report we file with, or furnish to, the SEC.



PART I
INTRODUCTION
ITEM 1. BUSINESS
Unless the context suggests otherwise, references in this Annual Report to “Aircastle,” the “Company,” “we,” “us,” or “our” refer to Aircastle Limited and its subsidiaries. Throughout this Annual Report, when we refer to our aircraft, we include aircraft that we have transferred into grantor trusts or similar entities for purposes of financing such assets through term financings. These grantor trusts or similar entities are consolidated for purposes of our financial statements. All amounts in this Annual Report are expressed in U.S. dollars and the financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Overview
Aircastle acquires, leases, and sells commercial jet aircraft to airlines worldwide. We are a leading secondary market investor, sourcing aircraft through a variety of acquisition channels, including other aircraft lessors, airlines through purchase-leaseback transactions, financial institutions and other aircraft owners, and aircraft manufacturers. We have significant experience in successfully managing aircraft throughout their life cycle, including lease and technical management, aircraft redeliveries, transitions, and asset sales or disposals. We sell aircraft and engine assets, either with a lease attached or on a part-out basis, with the objective of generating profits and reinvesting sale proceeds. Our aircraft are managed by an experienced team based in the United States, Ireland and Singapore.
As of February 28, 2026, we owned and managed 282 aircraft leased to 76 lessees located in 45 countries. The net book value of our fleet (comprised of flight equipment held for lease and net investment in leases, or “Net Book Value”) was $8.5 billion as of February 28, 2026, an increase of 8% from $7.9 billion as of February 28, 2025. The weighted average age of our fleet was 9.0 years and the weighted average remaining lease term was 5.4 years. The weighted average utilization rate of our fleet was 99% for the year ended February 28, 2026. During the year ended February 28, 2026, we purchased 46 aircraft and sold 33 aircraft and other flight equipment. As of February 28, 2026, we had commitments to purchase 17 aircraft with delivery through November 2028 for $829.5 million, which includes estimated amounts for pre-delivery deposits, contractual price escalations and other adjustments.
Our total revenues, net income and Adjusted EBITDA were $975.1 million, $194.0 million, and $945.1 million, respectively, for the year ended February 28, 2026, and $821.0 million, $123.6 million and $789.9 million, respectively, for the year ended February 28, 2025. Cash flow provided by operating activities was $483.1 million and $464.0 million for the years ended February 28, 2026 and 2025, respectively. Our financial performance continued to reflect strong global passenger demand for air travel and sustained demand for our narrow-body aircraft, driven by ongoing Original Equipment Manufacturer (“OEM”) delivery delays and broader supply chain constraints. These market conditions supported elevated lease extension activity and strong gains on sales, which contributed positively to our operating results. Our financial performance was also favorably impacted by additional cash settlement proceeds received in respect of our contingent and possessed insurance policies for aircraft formerly on lease to Russian airlines.
Growth in commercial air traffic has historically been correlated with global economic activity and has grown at a rate of approximately one to two times that of global gross domestic product (“GDP”) growth. This growth in air travel has driven expansion of the global aircraft fleet, which currently consists of approximately 28,000 commercial mainline passenger and freighter aircraft. Aircraft leasing companies own approximately 49% of the world’s commercial passenger jet aircraft. Under normal market conditions, we would expect the global fleet to continue expanding at an average annual rate of approximately 2 to 3%.
We believe our portfolio, which is primarily comprised of new technology and mid-life narrow-body aircraft, will remain attractive to our airline customers, enabling them to respond to continued growth in global air travel demand. As a leading secondary market investor, we believe that our long-standing strategy of maintaining conservative leverage and limiting long-term financial commitments positions us well to pursue attractive investment opportunities as they arise.
We employ a team of experienced senior professionals with extensive industry and financial experience. Our leadership team has an average of more than 30 years of relevant industry experience and has successfully managed the business through prior periods of industry disruption, including the COVID-19 pandemic, the 2008 global financial crisis, and the September 11, 2001 terror attacks.
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We believe we have sufficient liquidity to meet our contractual obligations over the next 12 months. As of April 1, 2026, total liquidity of approximately $2.6 billion consisted of $2.0 billion of undrawn credit facilities, $0.5 billion of projected adjusted operating cash flows and sales through April 1, 2027 and $0.1 billion of unrestricted cash through April 1, 2027.
Middle East Conflict
Recent armed conflicts and heightened geopolitical tensions in the Middle East have increased uncertainty regarding regional stability. Military actions and retaliatory measures involving multiple parties in the region have disrupted, and may continue to disrupt, commercial aviation and related economic activity, including oil markets and trade flows.
We are closely monitoring the evolving conflict and related geopolitical developments. While the ultimate impact on our business, financial condition and results of operations is currently uncertain, these hostilities have adversely affected, and an escalation or prolonged continuation of hostilities could continue to adversely affect, commercial aviation activity in the region, including through airspace closures, reduced flight operations, increased fuel and insurance costs, supply chain disruptions and broader macroeconomic effects. Such impacts could, in turn, negatively affect the financial condition and operating performance of airlines operating in, or flying through, the region, potentially resulting in lease restructurings, payment deferrals, or defaults.
As of and for the year ended February 28, 2026, our airline customers located in the Middle East represented approximately 5% of both our Net Book Value and lease rental revenue. Although our exposure to the region is limited and diversified across lessees and aircraft types, a sustained deterioration in regional or economic conditions could nevertheless have an adverse effect on our business, financial condition and results of operations.
Our Competitive Strengths
We believe the following competitive strengths positions us to generate attractive risk-adjusted returns and capitalize on growth opportunities across market cycles in the global aviation industry:

•Diversified Portfolio of Modern, in Demand Aircraft: We own a portfolio of modern commercial jet aircraft that is diversified by lessee, geography, lease maturity and aircraft type. As of February 28, 2026, our owned and managed aircraft fleet consisted of 282 aircraft leased to 76 lessees in 45 countries. Lease expirations for our owned aircraft are well dispersed, with a weighted-average remaining lease term of 5.4 years. This provides us with a long-dated base of contracted revenues. We believe our focus on portfolio diversification reduces the risks associated with individual lessee defaults and localized geopolitical or economic disruptions, and results in generally predictable cash flows.
•Flexible, Disciplined Acquisition Strategy Supported by a Broad Sourcing Network: Our investment strategy is designed to identify attractive risk-adjusted return opportunities across the commercial jet market, allowing our acquisition activity to adapt to changing market conditions. We source our acquisitions through well-established relationships with other aircraft lessors, airlines, financial institutions, other aircraft owners and aircraft and engine manufacturers. Since our formation in 2004, we have acquired 691 aircraft for $23.0 billion as of February 28, 2026. We have executed more than 217 transactions with 115 counterparties as of February 28, 2026, reflecting the breadth of our sourcing network and enhancing our ability to selectively deploy capital where we see the most compelling opportunities.
•Significant Experience in Successfully Selling Aircraft Across Their Life Cycle: Our team is adept at managing and executing the sale of aircraft, either with a lease attached or on a part-out basis. Since our formation, we have sold 387 aircraft to 118 buyers for $8.2 billion as of February 28, 2026. These sales produced net gains of $808.9 million and involved a wide range of aircraft types and buyers. Of these aircraft, 278, or 72%, were over 14 years old at the time of sale; often being sold on a part-out disposition basis, where the airframe and engines may be sold to various buyers. We believe our proven capability to sell older aircraft differentiates us from many of our competitors.
•Strong Capital Raising Track Record and Access to Diverse Global Funding Sources: Since our inception, we have raised $2.6 billion in equity capital from private and public investors as of February 28, 2026. In addition, we have raised $25.0 billion in debt capital from a variety of sources, including the unsecured bond market, commercial banks, export credit agency-backed debt and the aircraft securitization
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market. We maintain strong, strategic relationships with our shareholders, Marubeni Corporation (“Marubeni”) and Mizuho Leasing Company, Limited (“Mizuho Leasing” and together with Marubeni, our “Shareholders”), who have originated Japanese structured aircraft investment transactions, including Japanese Operating Lease and Japanese Operating Lease with Call Option (“JOLCO”) transactions. The diversity and global nature of our financing sources demonstrate our ability to adapt to changing market conditions and seize new opportunities.
•Our Capital Structure Provides Investment Flexibility: As of February 28, 2026, we had $1.9 billion available from unsecured revolving credit facilities, 100% of which is not scheduled to mature until 2028 through 2029, thereby limiting our near-term financial markets exposure. Combined with our relatively limited forward capital commitments, we have the resources to take advantage of future investment opportunities. Our large, unencumbered asset base and our unsecured revolving lines of credit give us access to the unsecured bond market, which we expect will allow us to pursue a flexible and opportunistic investment strategy over the long term.
•Experienced Management Team with Significant Expertise: Our leadership team has significant relevant industry experience, and we have expertise in the acquisition, leasing, financing, technical management, restructuring/repossession and sale of aviation assets. This experience spans several industry cycles, a wide range of business conditions and diverse geographic markets. We believe our management team is well positioned to manage risk, optimize portfolio performance and support our long-term capital and growth objectives.
•Global and Scalable Business Platform: We operate through offices in the United States, Ireland and Singapore, using a modern asset management system designed specifically for aircraft operating lessors and capable of handling a significantly larger aircraft portfolio. We believe that our current facilities, systems and personnel are capable of supporting an increase in our revenue base and asset base without a proportional increase in overhead costs.
Business Strategy
Our business approach is to continue to remain differentiated from other leasing companies that rely on large order books with aircraft manufacturers. Recent global disruptions have required, and may continue to require, an enhanced focus on diligent and proactive risk monitoring, while continuing to pursue our core strategies. Our focus is to actively manage risk, secure liquidity and maintain financial flexibility, while growing our assets and profits over the long term. By limiting long-term capital commitments and maintaining a conservative capital structure, we seek to best position ourselves for future investment opportunities.
Our business strategy entails the following elements:
•Pursuing a disciplined and differentiated investment strategy. In our view, the relative values of different aircraft change over time. We continually reevaluate investments across different aircraft models, ages, lessees and acquisition channels as market conditions and relative investment values change. We believe our team’s experience with a wide range of asset types and the financing flexibility provided by our access to unsecured debt gives us a competitive advantage. We view orders from aircraft manufacturers to be part of our investment opportunity set; however, we have limited long-term capital commitments and are not dependent on manufacturer order books as a primary source of growth, unlike many of our competitors. Over the long term we plan to grow our business and profits while maintaining a conservative and flexible capital structure.
•Selling assets when attractive opportunities arise. We sell assets with the aim of realizing value, generating gains and reinvesting proceeds into new investment opportunities. We also use asset sales as an active portfolio management tool, including reducing lessee-specific concentrations and lowering residual value exposures to certain aircraft types.
•Maintaining efficient access to capital from a wide set of sources and leveraging our investment grade credit rating. We believe the aircraft investment market is influenced by the business cycle. Our strategy is to increase acquisition activity when asset prices are low and to emphasize asset sales when prices are high. To implement this approach, we believe it is important to maintain access to a wide variety of financing sources. Since 2018, we have had an investment grade corporate credit rating and maintained strong portfolio and capital structure metrics while achieving critical scale through accretive growth. We believe our investment
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grade rating lowers our borrowing costs and facilitates more reliable access to both unsecured and secured debt capital throughout the business cycle. There can be no assurance, however, that we will be able to access capital on a cost-effective basis and our failure to do so could have a material adverse effect on our business, financial condition or results of operation.
•Leveraging our strategic relationships. We intend to optimize the benefits provided through our extensive global industry relationships, as well as those maintained by our Shareholders. These relationships enhance our access to Japanese-based financing sources and have supported the sourcing and development of our joint venture activities.
•Capturing the value of our efficient operating platform and proven operating track record. We believe our team’s capabilities in the global aircraft leasing market positions us to explore new income-generating activities as capital becomes available. We intend to continue focusing our efforts on investment opportunities where we believe we have competitive advantages and on transactions that offer attractive risk-adjusted returns.
•Maintaining a balanced and diversified lease portfolio. We operate within a defined risk appetite articulated through our risk guardrails, which are designed to manage portfolio risk and highlight areas where action to mitigate risk may be appropriate. Our risk guardrails set limits on lessee concentration by risk rating, geographic concentrations, aircraft type concentrations, overall portfolio credit quality distribution, and lease maturity distribution. We believe that our balanced and diversified fleet, together with disciplined portfolio management, has and will enable us to reduce the risks associated with the impact of adverse geopolitical and macroeconomic events.
Acquisitions and Sales
We originate acquisitions and sales through well-established relationships with other aircraft lessors, airlines, financial institutions, other aircraft owners, and aircraft manufacturers, as well as through a variety of sourcing channels. We believe that sourcing such transactions globally through multiple channels provides a broad, diversified and relatively consistent pipeline of opportunities. During the year ended February 28, 2026, we acquired 46 aircraft for $1.7 billion and sold 33 aircraft and other flight equipment for net proceeds of $729.5 million. We recognized gains on the sale or disposition of aircraft totaling $95.9 million.
Our objective is to develop, maintain and actively manage a diverse operating lease portfolio. We regularly review our operating lease portfolio to optimize portfolio diversification and capital allocation, and to sell aircraft when we believe doing so will achieve more attractive risk-adjusted cash flows than reinvesting in and re-leasing the aircraft. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Acquisitions and Sales.”
We have an experienced acquisition and sales team based in the United States, Ireland and Singapore that maintains strong relationships with a wide variety of market participants throughout the world. We believe that our seasoned personnel, global footprint and extensive industry contacts enhance our access to acquisition and sales opportunities, and that our strong operating track record supports reliable access to both debt and equity capital markets.
Potential investments and sales are evaluated by teams comprised of marketing, technical, risk management, finance and legal professionals. These teams consider a variety of factors before we commit to purchase or sell an aircraft, including price, specification and configuration, age, condition and maintenance history, operating efficiency, lease terms, financial condition and liquidity of the lessee, jurisdiction, industry trends and future redeployment potential and values. We believe that utilizing a cross-functional team of experts to consider investment parameters helps us to more comprehensively assess risk-adjusted returns of potential acquisitions and to execute transactions efficiently, including progressing expeditiously on letters of intent and acquisition documentation.
Finance
We operate in a capital-intensive industry and have a demonstrated track record of consistently raising substantial capital from both debt and equity investors. We believe that our liquidity sources, including cash on hand, funds generated from operations, maintenance payments received from lessees, equity offerings, unsecured bond offerings, borrowings secured by our aircraft, draws under our revolving credit facilities and proceeds from any future aircraft sales,
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will be sufficient to satisfy our liquidity and capital resource needs over the next 12 months. We may choose to repay all or a portion of such borrowings from time to time with the net proceeds from subsequent long-term debt financings, additional equity offerings or cash generated from operations and asset sales. Our ability to execute our business strategy, particularly the acquisition of additional commercial jet aircraft or other aviation assets, depends to a significant degree on maintaining continued access to debt and equity capital on terms we deem attractive.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
Segments
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.
Aircraft Leases
Our aircraft are generally leased under net leases, pursuant to which we retain the benefits and bear the risks associated with re-leasing the aircraft and the residual value of the aircraft at the end of the lease. Leasing can be an attractive alternative to ownership for airlines, as it provides greater fleet flexibility, requires lower upfront capital commitments, and reduces aircraft residual value risks.
Typically, the lessee agrees to lease an aircraft for a fixed term, although certain of our leases allow the lessee the option to extend the lease for an additional term or, in limited cases, to terminate the lease prior to its scheduled expiration. Our leases require the lessee to pay periodic rentals during the lease term. Approximately 99% of our leases have fixed rental rates that are payable monthly in advance in U.S. dollars. For variable-rate leases, rentals are payable on a floating interest-rate basis using the secured overnight financing rate (“SOFR”).
Generally, we receive a cash deposit or letter of credit as security for the lessee’s performance of its obligations under the lease.
Under our leases, the lessee is responsible for paying operating expenses incurred or accrued during the term of the lease, which typically include maintenance, overhaul, fuel, crew, landing, airport and navigation charges, certain taxes, licenses, consents and approvals, aircraft registration and insurance premiums. Many of our leases also contain provisions requiring us to pay a portion of the cost of aircraft modifications performed by the lessee at its expense where such modifications are mandated by recognized airworthiness authorities. The lessees are obliged to remove any liens on the aircraft, other than liens permitted under the leases.
In general, the lessee is responsible for performing maintenance on the aircraft and is required to make payments for heavy maintenance, overhaul or replacement of certain high-value components. These maintenance payments are typically calculated based on hours or cycles of utilization or on calendar time, depending upon the applicable component, and are made either monthly in arrears or at the end of the lease term. Our determination of whether to require such payments to be made monthly or to permit a lessee to make a single maintenance payment at the end of the lease term depends on a variety of factors, including the creditworthiness of the lessee, the amount of security deposit provided by the lessee and market conditions at the time we enter into the lease. Where a lessee makes monthly maintenance payments, we are generally obligated to use such funds to reimburse the lessee for costs they incur for eligible heavy maintenance, overhaul or replacement of certain high-value components during the lease term, typically following completion of the relevant work. Where a lessee makes a single end of lease maintenance payment, the lessee would typically be required to compensate us for its utilization of the aircraft during the lease. In some cases, however, we may owe a net payment to the lessee if heavy maintenance is performed and paid for by the lessee and the aircraft is returned to us in better condition than at lease inception.
Our leases generally provide that the lessees’ payment obligations are absolute and unconditional under any and all circumstances and require payments to be made without set-off, withholding or counterclaim for any amounts the lessor may owe the lessee or for any claims the lessee may have against the lessor for any reason. Certain leases provide limited exceptions, including where a breach of quiet enjoyment by the lessor may permit a lessee to withhold payment. The leases also generally include an obligation of the lessee to gross up payments under the lease where lease payments are subject to withholding and other taxes, although there may be some limitations to the gross up obligation, including
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provisions which do not require a lessee to gross up payments if the withholdings arise out of our ownership or tax structure. In addition, changes in law may result in the imposition of withholding and other taxes and charges that are not reimbursable by the lessee under the lease or that cannot be reimbursed under applicable law. Our leases also generally require the lessee to indemnify the lessor for tax liabilities relating to the leases and the aircraft, including in most cases, value added tax and stamp duties, but excluding income tax or its equivalent imposed on the lessor.
The scheduled maturities of our aircraft leases by aircraft type grouping currently are as follows, taking into account sales, sale agreements, lease placements and renewal commitments as of April 14, 2026, by fiscal year:
Aircraft Type202620272028202920302031203220332034203520362037Off-LeaseSold or Sale AgreementTotal
A319/A320/A3216 16 26 23 11 14 5 — 3 — — — — 5 109 
A320neo/A321neo2 7 1 5 3 8 7 6 5 3 1 2 4 — 54 
A330-200/300— 2 — 5 1 4 — — — — — — — — 12 
737-700/800— 9 8 11 8 1 3 3 4 2 1 — — 1 51 
737-MAX8/MAX9— — — — 1 1 4 3 3 1 4 6 — — 23 
E1954 1 — — — — — — — — — — — — 5 
E2-195— — — — — 5 5 1 4 3 — — — — 18 
Freighters— — — — 3 — 1 1 — — — — — — 5 
Total12 35 35 44 27 33 25 14 19 9 6 8 4 6 277 
Fiscal Year 2026 Lease Expirations and Lease Placements
As of April 14, 2026, we have 4 off-lease aircraft and 12 aircraft with leases expiring in fiscal year 2026, which combined account for 4% of our Net Book Value at February 28, 2026, still to be placed or sold.
Fiscal Year 2027-2030 Lease Expirations and Lease Placements
Taking into account lease and sale commitments, we currently have the following number of aircraft with lease expirations scheduled between fiscal years 2027 and 2030, representing the percentage of our Net Book Value at February 28, 2026, specified below:
•2027: 35 aircraft, representing 10%;
•2028: 35 aircraft, representing 9%;
•2029: 44 aircraft, representing 15%; and
•2030: 27 aircraft, representing 9%.
Lease Management and Remarketing
Our aircraft re-leasing strategy is focused on proactively developing opportunities well in advance of scheduled lease expirations. This approach allows us to evaluate a broad set of alternatives, including redeployment, sale or part-out, and to allow for reconfiguration or maintenance lead times where needed. We also proactively monitor the credit quality of our customers and may seek early return and redeployment of aircraft if we feel that a lessee is unlikely to perform its obligations under a lease. In addition, we have invested significant resources in developing and implementing modern, efficient lease management information systems and processes to support the effective management and remarketing of aircraft within our portfolio.
Portfolio Risk Management
Our objective is to build and maintain a balanced and diversified lease portfolio that delivers returns commensurate with risk. We have a defined risk appetite framework to support portfolio risk management and to identify areas where actions to mitigate risk may be appropriate, taking into account the following:
• individual lessee exposures;
• geographic concentrations;
• aircraft type concentrations;
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• portfolio credit quality distribution; and
• lease maturity distribution.
We have a dedicated risk management team that performs detailed due diligence on lessees when aircraft are acquired with a lease already in place and for placement of aircraft with new lessees following lease expiration or termination. The risk management team also monitors the portfolio on an ongoing basis.
Other Aviation Assets and Alternative New Business Approaches
We believe investment opportunities may arise in related areas, including financing secured by commercial jet aircraft, as well as jet engine and spare parts leasing, trading and financing. From time to time, we have made, and may continue to make opportunistic investments in these or other sectors or in other aviation-related assets, and we intend to continue to explore other income-generating activities and investments opportunities.
We source and service investments for our joint venture, to which we provide marketing, asset management and administrative services. We are paid market-based fees for these services, which are recorded in other revenue in our consolidated statements of income.
We believe we have a world class servicing platform and may also pursue opportunities to capitalize on these capabilities, including providing aircraft management services for third party aircraft owners.
Competition
The aircraft leasing and trading industry is highly competitive with a significant number of active participants. We face competition for the acquisition, placement and sale of aircraft. Competition for aircraft acquisitions comes from many sources, ranging from large established aircraft leasing companies to smaller players and new entrants.
Competition for leasing, re-leasing and selling aircraft is based upon a number of factors, including aircraft availability, type and condition, operator base, customer relationships, lease rates, pricing, and other lease terms. Aircraft manufacturers, leasing companies, airlines and other operators, distributors, equipment managers, financial institutions and other parties engaged in leasing, managing, marketing or remarketing aircraft compete with us, although their focus may be on different market segments and aircraft types.
Larger lessors are generally more focused on acquiring new aircraft via direct orders with the OEMs and through purchase lease-back transactions with airlines. These larger lessors include AerCap Holdings, SMBC Aviation Capital, Avolon Holdings, Air Lease Corporation, Dubai Aerospace Enterprise, Aviation Capital Group and BOC Aviation.
Competition for mid-aged and older aircraft comes from other competitors that, in many cases, rely on private equity, hedge fund or other alternative capital sources. Such competitors include Carlyle Aviation Partners, Castlelake and other players, including new entrants, funded by alternative investment funds and companies. These companies are typically fund-based, rather than supported by permanent capital structures and have benefited from the availability of debt financing for mid-aged aircraft, although some have also established permanent capital structures to access the unsecured debt markets.
Some of our competitors have greater financial resources and/or a lower cost of capital. A number of competitors place speculative orders for new aircraft to be leased upon delivery from the manufacturer, which compete with both new and used aircraft offered by other lessors. The aircraft leasing industry is also characterized by ongoing merger and acquisition activity and new entrants, as barriers to entry are relatively low.
We believe we compete favorably in aircraft acquisition, leasing and sales activities due to the reputation of our experienced team, extensive market relationships and demonstrated ability to source and acquire aircraft effectively. We also believe our access to unsecured debt provides a competitive advantage by enabling us to pursue investment opportunities quickly and reliably, including in situations where secured, non-recourse financing may be less readily available.


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Insurance
We require our lessees to carry general third-party legal liability insurance, all-risk aircraft hull and spares insurance (both with respect to the aircraft and with respect to each engine or part when not installed on our aircraft), war-risk hull and spares insurance, and excess war liability insurance. We are named as an additional insured on liability insurance policies carried by our lessees, and we or one of our lenders will be designated as a contract party/loss payee in the event of a total loss of the aircraft. We maintain contingent and possessed hull, war, excess war and legal and liability insurance coverage with respect to our aircraft which provides coverage when our equipment is not on lease or where a lessee party fails to indemnify us. This coverage is intended to protect against certain risks, including where a lessee’s insurance fails, but excluding coverage for other risks such as the risk of insolvency of the primary insurer or reinsurer. Not all losses are covered by insurance and in some cases, the insurers also have maximum limits (aggregate limits) on amounts payable.
We maintain insurance policies to cover non-aviation risks related to physical damage to our equipment and property, as well as with respect to third-party liabilities arising through the course of our normal business operations (other than aircraft operations). We also maintain limited business interruption insurance designed to cover a portion of the costs we would expect to incur in connection with a disruption to our main facilities, and we maintain directors’ and officers’ liability insurance providing coverage for liabilities related to the service of our directors, officers and certain employees. Consistent with industry practice, our insurance policies are generally subject to deductibles or self-retention amounts.
Geopolitical events and regional conflicts have, in recent years, led insurers to reassess their coverage and significantly increase premiums. In addition, insurance claims arising from geopolitical events may remain unsettled and, in some cases, may be subject to dispute resolution or litigation, which could take years to resolve, if at all. We believe that the insurance coverage currently carried by our lessees and by Aircastle is consistent with industry practice and provides adequate protection against the accident-related and other covered risks involved in the conduct of our business. However, there can be no assurance that we have adequately insured against all risks, that lessees will at all times comply with their obligations to maintain insurance, that our lessees’ insurers and re-insurers will be or will remain solvent and able to satisfy any claims, that any particular claim will ultimately be paid or that we or our lessees will be able to procure adequate insurance coverage at commercially reasonable rates in the future. Furthermore, war risk insurance may be automatically cancelled as a result of certain events outside our control, including the escalation of armed conflict or geopolitical instability.
Corporate Responsibility and Sustainability
We believe that our commitment to identifying and implementing positive environmental and social related business practices strengthens our Company, and better serves our customers, our communities and the broader environment within which we conduct our business. Board oversight of environmental, social and governance (“ESG”) matters is conducted by the Company’s Risk and Governance Committee. A detailed report with our ESG disclosures in alignment with Global Reporting Initiative guidance can be found on our website at www.aircastle.com. The information on our website regarding our ESG disclosures is not part of, nor incorporated by reference, into this report, or any other report we file with, or furnish to, the SEC.
Our Commitment to Environmental Sustainability
Ambitious targets have been made towards the ultimate goal of curbing the adverse effects of climate change. Since 2021, the International Air Transport Association (“IATA”) has maintained a Fly Net Zero commitment for aviation to achieve net zero carbon by 2050. For ambitious measures to reach implementation, a wide political and administrative consensus will be required. Due to the inherent complexities of jet aircraft, decarbonizing aviation requires more radical new technology as compared to other modes of transportation. Sustainable Aviation Fuel (“SAF”) is an alternative to conventional jet fuel that, on a lifecycle basis, reduces greenhouse gas emissions associated with air travel compared to conventional jet fuel. Hydrogen and electronic propulsion for commercial jet aircraft are longer-term initiatives.
The Company believes the operations of our customers could be affected by the potential impacts of both climate change and sustainability targets and initiatives aimed at curbing its effect, so we are committed to monitoring sustainability developments. The Company’s long-term strategic plan takes these rapidly developing initiatives into
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consideration when we evaluate the technology behind the aircraft we target for investment. For the year ended February 28, 2026, 63% of our incremental net book value acquired was new technology aircraft with higher efficiency and lower emissions. Although the Company continues to increase the new technology portion of our fleet, it is understood that manufacturer output is below the global market’s demand for new aircraft. Technical challenges to certain engine types that service new aircraft types also have extended the lives of current technology aircraft.
In addition, the Company is an investment partner in the United Airlines Ventures’ Sustainable Flight Fund whose objective is scaling up the availability of SAF. SAF provides the most readily available means for airline operators to reduce their carbon emissions while using existing technology. Many governments have mandated SAF blends for commercial aircraft operators. The high cost and low availability of SAF present challenges for airlines seeking to meet these mandates.
In making this commitment, the Company joins other corporate partners who represent various parts of the aviation supply chain that have committed over $200 million in capital to invest in a roster of companies developing cutting edge technologies for SAF production.
Our People
As of February 28, 2026, we had 119 employees. None of our employees are covered by a collective bargaining agreement, and we believe that we maintain excellent employee relations.
We believe that our commitment to our employees is critical to our continued success, leading to high employee satisfaction and low employee turnover. To facilitate talent attraction and retention, we strive to have an inclusive and safe workplace, with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities. Each year, we review employee career development and succession planning internally and with our Compensation Committee.
Our Culture & Governance
Our C.A.S.T.L.E. Values guide our people and our operations: Community – we unify and collaborate to create a better work environment; Accountability – we are reliable, honest and act with integrity; Sustainability – we embrace sustainable initiatives which have local and global impacts; Transparency – we build trust through open, honest and respectful communication; Leadership – we coach, mentor and empower our people to expand their potential; and Equality – we foster inclusivity and respect for all.
These values are embodied in the spirit of our Code of Business Conduct and Ethics, which has been adopted by the Board of Directors of the Company to serve as a statement of principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business.
The Company also maintains independent third-party whistle-blower platforms for anonymous reporting of fraud or ethics violations. Our cybersecurity initiatives provide protection through malware detection, cloud penetration testing, threat hunting and incident responsiveness.
We believe that our commitment to our Company, our employees and the communities in which we operate has led to high employee satisfaction and low employee turnover, as discussed above, and our commitment to our customers and business partners has resulted in high customer satisfaction, as evidenced by long-standing relationships with our customers and new/repeat transactions with our business partners.
Government Regulation
The air transportation industry is highly regulated. Aircastle itself is generally not directly subject to most air transportation regulations as we do not operate aircraft. By contrast, our lessees are subject to extensive, direct regulation under the laws of the jurisdictions in which they are registered and where they operate. Such laws govern, among other things, the registration, operation, security, and maintenance of our aircraft, environmental issues and the financial oversight of their operations.
Regulatory requirements applicable to the aviation industry, including those relating to carbon emissions, sustainability initiatives and aircraft noise, continue to evolve and, in many cases, involve an international regulatory
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framework. The impact of these regulatory developments on the airline sector, together with broader global events and periods of industry disruption, has increased regulatory complexity and uncertainty. Additional regulatory changes affecting the aviation industry may occur in the future, the scope and impact of which are difficult to predict.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could materially adversely affect our business, financial condition, results of operations in future periods or our ability to meet our debt obligations. The risks described below are not the only risks facing our Company. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or results of operations.
Summary of Risk Factors
Risks Related to Our Lessees
•We are indirectly impacted by the risks facing airlines and their ability to perform their obligations under the relevant lease depends on their financial condition, which may be affected by factors beyond our control, such as currency movements, fuel price volatility, weak economic conditions, and geopolitical instability.
•Lessee defaults, bankruptcies, aircraft repossessions, and lease payment restructurings or rescheduling could have a material adverse impact on our future revenue and cash flows.
•An adverse economic or political event in any region or country in which our lessees or our aircraft are concentrated could have a material adverse effect on our financial results.
•Airlines operating in emerging markets face heightened political and economic risks, which could affect the ability of our lessees to meet their obligations to us.
Risks Related to Our Aviation Assets
•Lease rates and aircraft values are subject to supply-demand dynamics and may decline due to excess capacity or the introduction of new aircraft and engine technology.
•Climate-related regulations and preferences for more fuel-efficient aircraft could reduce demand for older aircraft types.
•The concentration of our portfolio around a specific aircraft or engine type could have a material adverse effect on our business should the aircraft or engine type encounter disruptions, manufacturing and quality control issues, or other difficulties.
•We operate in a highly competitive aircraft leasing market with low barriers to entry, which may make it difficult for us to take advantage of investment opportunities or make investments that are consistent with our investment objectives.
Risks Related to Our Leases
•A lessee may fail to meet its maintenance obligations or other operational requirements applicable under the relevant lease, which may require us to incur unanticipated or significant costs.
•The failure to pay certain operational costs and discharge liens on the aircraft could result in the grounding or arrest of our aircraft and prevent or delay the re-lease, sale or other use of our aircraft.
•Failure to obtain adequate insurance coverage or lessee noncompliance with indemnity provisions may result in us, as lessor, being held liable for losses from the operation of the aircraft.
•Political or regulatory restrictions may impair our ability to export, re-register, or transfer aircraft.
Risks Related to Our Operations
•We operate a global business that may be subject to events outside of our control, such as economic downturns, epidemic or pandemic diseases, terrorist attacks, war or armed hostilities, and natural disasters, which may adversely affect the demand for air travel.
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•Foreign laws, rules, and regulations, as well as escalating tariffs, trade tensions, and protectionist measures may adversely affect our business, financial condition and results of operations.
•Our ability to obtain debt financing on satisfactory terms depends on financial market conditions, as well as our credit rating, and any volatility in the capital markets or a credit downgrade may increase our borrowing costs and adversely affect our earnings and cash flow.
•We bear the risk or re-leasing and selling our aircraft and may not fully recover our investment through either future lease cash flows or a sale, which may result in a write down of the value of some of our assets.
•We are subject to cybersecurity threats and data protection regulations, and failure to maintain secure IT systems could disrupt our operations.
Risks Related to Our Organization and Structure
•We are a holding company with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations.
Risks Related to Taxation
•We are subject to complex and evolving tax laws in jurisdictions where we have significant operations, including Ireland, Bermuda, and the U.S., which may have an adverse effect on our results of operations.
•Our business would be adversely affected by the imposition of taxes should we no longer qualify for certain tax exemptions for which we are currently eligible.
•Global initiatives, such as the Organization for Economic Cooperation and Development’s (“OECD”) action plan with respect to base erosion and profit shifting (“BEPS”) may increase our effective tax rate and tax liabilities in future periods.
Risks Related to Our Lessees
Risks affecting the airline industry may materially adversely affect our customers.
We operate as a supplier to airlines and are indirectly impacted by the risks facing airlines. The ability of lessees to perform their obligations under the relevant lease depends on their financial condition, which may be affected by factors beyond our control, including:
•passenger and air cargo demand, fare levels and air cargo rates;
•operating costs, including the price and availability of jet fuel, labor costs and the cost, availability, and scope of insurance coverages;
•manufacturer production levels and reliability of new aircraft and engine types resulting from production quality issues and technical or other difficulties;
•restrictions in labor contracts and labor difficulties, including pilot shortages;
•availability of financing, including covenants in financings, terms imposed by credit card issuers, collateral posting requirements contained in hedging contracts and the ability of airlines to make or refinance principal payments;
•economic conditions, including economic downturns or recession, financial system distress and currency fluctuations;
•aircraft accidents or other safety-related events;
•the availability of government support through subsidies, loans, guarantees, equity investments;
•changing political conditions, including risk of protectionism, travel restrictions, or trade barriers;
•geopolitical events, including war, terrorism, epidemic or pandemic diseases and natural disasters;
•the impact of climate change and related compliance costs on demand and supply of air travel;
•cyber risk, including information hacking, viruses, ransomware and malware; and
•governmental regulation of airlines, including noise regulations, emissions regulations, climate change initiatives, and aircraft age limitations.
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These factors, and others, may lead to defaults by our customers, may delay or prevent aircraft deliveries or transitions, may result in payment or other lease term restructurings, may increase our costs from repossessions or may reduce our revenues due to downtime or lower re-lease rates.
Adverse currency movements could negatively impact the profitability of our lessees.
Many of our lessees are exposed to currency risk as they earn revenues in local currencies while a significant portion of their liabilities and expenses, including fuel, debt service, and lease payments are denominated in U.S. dollars. If the local currency is devalued, our lessees may not be able to increase revenue sufficiently to offset the impact of exchange rates on these expenses. In addition, the implementation of strict currency controls by local governments may make it difficult for our lessees to access U.S. dollars. Currency depreciation and currency controls could impact the ability of our customers to meet their contractual obligations in a timely manner. Shifts in foreign exchange rates can be significant, are difficult to predict, and can occur quickly.
Increases in fuel prices could negatively impact the profitability of our lessees.
Fuel costs represent a major expense to airlines and are subject to significant volatility. Airlines may not be able to successfully manage their exposure to fuel prices through hedging or other risk management strategies, and significant increases could materially affect their operating results. Airlines may not be able to pass on increases in fuel prices to their customers through higher fares, particularly in competitive markets or during periods of weakened demand. Fuel price volatility may be exacerbated by geopolitical events, including armed conflicts, political instability or disruptions to global energy supply, which can result in sudden and sustained increases in fuel costs. High fuel prices may also have a general impact on consumer spending and reduce demand for air transportation.
Lessee defaults could materially adversely affect our business, financial condition and results of operations.
Investors should expect some lessees to experience payment difficulties, particularly in difficult economic, financial or operating environments. As a result of their financial condition and constraints on liquidity, lessees may be significantly in arrears in their rental or maintenance payments. Liquidity issues are more likely to lead to airline failures during periods of significant declines in air traffic, financial system distress, volatile fuel prices and broader economic slowdowns. Given the size of our aircraft portfolio, we expect that from time to time some lessees will be slow or will fail to make their payments in full under their leases.
We may not correctly assess the credit risk of a lessee at the time of lease origination, or that risk could change over time. We may not be able to charge or maintain risk-adjusted lease rates, and lessees may not be able to continue to perform their financial and other obligations under our leases in the future. We may experience some level of delinquency under our leases, and levels of delinquencies and defaults may increase over time. A lessee may experience periodic difficulties that are not financial in nature, which could impair its performance of maintenance obligations under the leases. These difficulties may include failure to perform required aircraft maintenance and labor-management disagreements or disputes.
In the event that a lessee defaults under a lease, any security deposit paid or letter of credit provided by the lessee may not be sufficient to cover the lessee’s outstanding or unpaid lease obligations and required maintenance and transition expenses.
Significant costs resulting from lease defaults could have a material adverse effect on our business.
While we have the right to repossess aircraft and to exercise other remedies upon a lessee default, repossession of an aircraft may involve significant time and cost. Such costs may include legal and other expenses of court or other governmental proceedings, particularly if the lessee is contesting the proceedings, and costs to obtain possession, deregistration of the aircraft and flight and export permissions. Delays resulting from these proceedings would increase the period during which the aircraft is not generating revenue. We may also incur maintenance, refurbishment or repair costs that a defaulting lessee has failed to undertake or pay and that are necessary to put the aircraft in suitable condition for re-lease or sale. We may be required to pay off liens, claims, taxes and other governmental charges to obtain clear possession and to remarket the aircraft for re-lease or sale. We may also incur maintenance, storage or other costs while we have physical possession of the aircraft.
We may suffer other adverse consequences due to a lessee default and the repossession of the aircraft. Our rights upon a lessee default vary significantly by jurisdiction and may include the need to obtain a court order for repossession
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of the aircraft and consents for deregistration or re-export of the aircraft. When a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations may apply. Certain jurisdictions give rights to the trustee in bankruptcy or a similar officer to assume or reject the lease or to assign it to a third party, or entitle the lessee or another third party to retain possession of the aircraft without paying lease rentals or without performing all of the obligations under the lease. There can be no assurance that jurisdictions that have adopted the Cape Town Convention will enforce it as written. Certain of our lessees are owned in whole or in part by government-related entities, which could complicate our efforts to repossess the relevant aircraft. Accordingly, we may be delayed in, or prevented from, enforcing our rights under a lease and in re-leasing or selling the affected aircraft.
If we repossess an aircraft, we may not necessarily be able to export or deregister and redeploy the aircraft. If a lessee or other operator flies only domestic routes, repossession may be more difficult, especially if the jurisdiction permits the lessee or the other operator to resist deregistration. Significant costs may also be incurred in retrieving or recreating aircraft records required for registration of the aircraft and obtaining a certificate of airworthiness. A default and exercise of remedies involving a lessee where we have significant exposure could have a materially adverse impact on our future revenue and cash flows.
If our lessees encounter financial difficulties and we decide to restructure our leases with those lessees, this could result in less favorable leases and significant reductions in our cash flow.
When a lessee is late in making payments or fails to make payments in full, we may elect to or may be required to restructure the lease. Restructuring may involve anything from a simple rescheduling of payments to the termination of a lease without receiving all the past due amounts. If requests for payment restructuring or rescheduling are granted, rental payments may be reduced, deferred or otherwise modified over all or some part of the remaining term of the lease, and the terms of payment may be less favorable or such payments may not be made. We may be unable to agree upon acceptable terms for any requested restructurings and as a result may be forced to exercise our remedies under those leases and we may be unable to repossess our aircraft on a timely basis. If we, in the exercise of our remedies, repossess the aircraft, we may not be able to re-lease the aircraft promptly, at favorable rates, or at all.
The terms and conditions of payment restructurings or reschedulings, particularly involving lessees where we have significant exposure, may adversely affect our cash flows.
Airline reorganizations could have an adverse effect on our financial results.
As a result of adverse economic conditions, airlines may be forced to reorganize. Bankruptcies and reduced demand may lead to the grounding of significant numbers of aircraft and negotiated reductions or deferrals of aircraft lease rental rates, with the effect of depressing aircraft market values. Additional grounded aircraft and lower market values would adversely affect our ability to sell certain of our aircraft on favorable terms, or at all, or re-lease other aircraft at favorable rates comparable to the then current market conditions, which collectively would have an adverse effect on our financial results. We may not recover any of our claims or damages against an airline under bankruptcy or insolvency protection.
If our lessees fail to appropriately discharge aircraft liens, we might find it necessary to pay such claims.
In the normal course of business, liens that secure the payment of airport fees and taxes, custom duties, air navigation charges (including charges imposed by Eurocontrol), landing charges, crew wages, repairer’s charges, salvage or other liens, may, depending on the jurisdiction, attach to the aircraft. These liens may secure substantial sums that may, in certain jurisdictions or for certain types of liens (particularly “fleet liens”), exceed the value of the relevant aircraft. Although the financial obligations relating to these liens are the responsibility of our lessees, if they fail to fulfill their obligations, these liens may attach to our aircraft and ultimately become our responsibility. Until these liens are discharged, we may be unable to repossess, re-lease or sell the aircraft or unable to avoid detention or forfeiture of the aircraft.
Our lessees may not comply with their obligations under their respective leases to discharge liens arising during the terms of their leases. If they do not do so, we may find it necessary to pay the claims secured by any liens in order to repossess the aircraft.


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Risks associated with the concentration of our lessees in certain geographical regions could harm our business or financial results.
Through our lessees and the countries in which they operate, we are exposed to the specific conditions and associated risks of those particular jurisdictions. An adverse economic, political, or regulatory event or a deterioration in operating conditions in any region or country in which our lessees or our aircraft are concentrated could affect the ability of our lessees to meet their obligations to us or expose us to heightened legal or political risks associated with the affected jurisdictions, which could have a material adverse effect on our financial results.
Many of our lessees operate in emerging markets and we are indirectly subject to the economic and political risks associated with such markets.
Emerging markets may be more vulnerable to economic and political problems, such as significant fluctuations in gross domestic product, interest and currency exchange rates, government instability, nationalization and expropriation of private assets, less predictable or less developed legal and judicial systems, change in law regarding recognition of contracts or ownership rights, changes in governments or government policy and the imposition of taxes, tariffs or other charges by governments. The occurrence of these events may adversely affect our ownership interests in aircraft, our ability to enforce our contractual rights, or the ability of our lessees to meet their lease obligations. For the year ended February 28, 2026, 50 of our lessees, which operated 130 aircraft and generated 51% of our lease rental revenue, are domiciled or habitually based in emerging markets.
Risks Related to Our Aviation Assets
The variability of supply and demand for aircraft could depress lease rates for our aircraft.
The aircraft leasing and sales industry has experienced periods of aircraft oversupply. The oversupply of a specific type of aircraft in the market is likely to depress aircraft lease rates for, and the value of, that type of aircraft. The supply and demand for aircraft is affected by various cyclical and non-cyclical factors that are not under our control, including:
•passenger and air cargo demand;
•operating costs, including fuel costs, and general economic conditions affecting our lessees’ operations;
•foreign exchange rates;
•interest rates and the availability of capital to finance certain aircraft types;
•airline restructurings and bankruptcies;
•changes in control of, or restructurings of, other aircraft leasing companies;
•new-entrant manufacturers, or existing manufacturers producing new aircraft and engine types;
•manufacturer production levels, production quality control issues, and technical or other difficulties;
•geopolitical events, including war, prolonged armed conflict and acts of terrorism;
•governmental regulation, tariffs and other restrictions, such as sanctions, on trade or the leasing of aircraft;
•climate change initiatives, technological change, aircraft noise and emissions regulations, aircraft age limits and other factors leading to reduced demand for, early retirement or obsolescence of aircraft models;
•outbreaks of communicable diseases and natural disasters;
•reintroduction into service of aircraft previously grounded or in storage; and
•airport and air traffic control infrastructure constraints.
These and other factors may produce movements in aircraft values and lease rates, which could adversely affect the economics of aircraft acquisitions, result in lease defaults, or delay or prevent aircraft from being re-leased or sold on favorable terms.
Other factors that could cause a decline in aircraft value and lease rates.
In addition to factors linked to the aviation industry generally, other factors that may affect the value and lease rates of our aircraft include:
•the age of the aircraft;
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•the particular maintenance and operating history of the airframe and engines;
•the number of operators using that type of aircraft;
•whether the aircraft is subject to a lease and, if so, whether the lease terms are favorable to the lessor;
•the demand for and availability of such aircraft;
•applicable airworthiness directives or manufacturer’s service bulletins that have not yet been performed;
•grounding orders or other regulatory action that could prevent or limit utilization of our aircraft;
•regulatory and legal requirements that must be satisfied before the aircraft can be purchased, sold or re-leased; and
•compatibility of our aircraft configurations or specifications with those desired by operators and financiers.
Any decrease in the values of, or lease rates for, commercial aircraft which may result from the above factors or other unanticipated factors may have a material adverse effect on our financial results.
Climate change may have a long-term impact on our business.
There are inherent climate-related risks wherever our business is conducted. Changes in market dynamics, stakeholder and financier expectations, and local, national and international climate change policies and regulatory frameworks all have the potential to disrupt our business and operations. Various countries, including the United States and countries in the European Union (“E.U.”), have announced sustainability initiatives that, among other things, aim to reduce carbon emissions, explore sustainable aviation fuels and establish sustainability measures and targets. Developing climate and environmental regulations may impact the types of aircraft we target for investment and the demand for certain aircraft and engine types, and could result in a significant increase in our costs and expenses, including compliance, reporting, operational and capital costs, and adversely affect future revenue, cash flows and financial performance. Failure to address climate change or to adapt our business strategy to evolving climate-related expectations could result in greater exposure to economic and other risks and impact our ability to meet developing climate goals.
The introduction of new technology aircraft types and higher production levels could cause our existing aircraft portfolio to become outdated and therefore less desirable.
New aircraft types or variants, and higher production levels of new technology aircraft types that have already been launched, may cause certain aircraft in our existing aircraft portfolio to become less desirable to potential lessees or purchasers. New technology aircraft may shorten the economic lives of certain aircraft in our portfolio or limit demand for those aircraft. Certain new technology aircraft programs, including the Boeing 737 MAX and 787 and the Airbus A220, A320neo family, A330neo and A350, are currently in production. The Boeing 777X is expected to enter service in 2027. In addition, the Commercial Aircraft Corporation of China Ltd. has developed aircraft models intended to compete with certain narrow-body aircraft manufactured by Airbus and Boeing, as well as regional jet aircraft manufactured by Embraer. These new technology aircraft types, and potential variants of these types, may reduce the desirability of, and have an adverse effect on the residual values and future lease rates of, older aircraft types and variants. The development of more fuel-efficient engines could make aircraft in our portfolio with less fuel-efficient engines less attractive to potential lessees.
The effects of emissions and noise regulations and policies may challenge the current growth trajectory of the airline industry. Sustainability regulations and initiatives could increase the operating costs of our customers.
Many governments have imposed limits on aircraft engine emissions, such as NOx, CO and CO2, consistent with current International Civil Aviation Organization (“ICAO”) standards. In February 2024, the Federal Aviation Administration released guidance to reduce carbon pollution emitted by most large airplanes flying in U.S. airspace. The rule requires incorporating improved fuel-efficient technologies for airplanes manufactured after January 1, 2028, and for subsonic jet airplanes and large turboprop and propeller airplanes that are not yet certified.
European countries have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft productivity. The E.U. has included the aviation sector in its emissions trading scheme (“ETS”), a cap-and-trade system that sets a limit on the amount of carbon dioxide that can be emitted by all industries, including aviation. Although the ETS was initially implemented granting free emissions allowances based on an airline’s emissions history, a 2023 proposal was adopted by the European Parliament and the European Council, which modifies the ETS system such
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that ETS free emissions allowances will phase out for the aviation sector by 2026. Although the ETS is likely to increase costs for airlines operating in Europe, it remains to be seen what effect, if any, this will have on our business.
ICAO adopted a global market-based measure to control CO2 emissions from international aviation called the Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”). CORSIA is currently in its first phase (2024-2026) wherein compliance applies only to routes between countries that have each volunteered to participate in the scheme. All airlines that operate routes between two volunteering countries will be subject to the offsetting requirements. From 2027 onwards, CORSIA compliance will be mandatory.
Sustainable Aviation Fuel has been identified by IATA as the primary means by which IATA’s NetZero 2050 goal is to be achieved. Many governments, including the E.U., the United Kingdom, Brazil and Japan, have mandated aviation operators employ benchmarked percentages of SAF “drop in” blend on future commercial flights. A significant increase in SAF production will be required to make these benchmarks attainable, and at present, the cost of SAF is approximately two to three times the cost of fossil jet fuel. Meeting mandated SAF blends could pose a significant operating cost to our customers.
Over time, it is possible that governments will adopt additional regulatory requirements and/or market-based policies to reduce emissions and noise levels from aircraft. Such initiatives may be based on concerns regarding climate change, energy security, public health, local impacts, or other factors, and may impact the global market for certain aircraft and cause behavioral shifts that result in decreased demand for air travel. These concerns could result in limitations on our customers’ operation of our fleet and our ability to lease or re-lease certain older aircraft, particularly aircraft equipped with older technology engines.
Compliance with current or future regulations could cause our lessees to incur higher costs and lead to higher ticket prices, which could mean lower demand for travel and adverse impacts on the financial condition of our lessees. Such compliance may also affect our lessees’ ability to make rental and other lease payments and limit the market for aircraft in our portfolio.
Corporate responsibility, specifically related to ESG matters, could expose us to additional risks and costs.
In recent years, there has been an increased expectation for companies across many industries to balance commercial interests with responsible ESG practices focused on accountability to stakeholders. In recognition of this trend, organizations are sometimes evaluated by rating agencies using differing and evolving sustainability evaluation criteria, which, in some cases, results in ESG-specific ratings or scores. Certain institutional investors and lenders, including those that invest in our unsecured notes or provide secured lending facilities, may be required or may choose to consider ESG-related risks in allocating capital. As a result, they may limit exposure to certain industries or companies based on ESG considerations. Our ability to obtain financing at strategic rates could be impacted by these perceptions and ratings or by any developing key performance indicators which the Company and financiers may develop over time.
More recently, there has been increased divergence in ESG-related regulation, policy and sentiment across jurisdictions, including differing approaches in the United States and in certain international markets, which may result in regulatory or compliance uncertainty. Our efforts to implement ESG-related initiatives, and the timing and manner of their adoption, may be impacted by broader changes in ESG sentiment (including those in opposition to ESG principles), policy shifts and divergence of regulations, policies and practices with respect to these matters. If we are unable to meet ESG-related standards or expectations, whether established by us or third parties, it could result in adverse publicity, reputational harm, and/or loss of investment, which could adversely affect our business, results of operations, financial condition, and liquidity.
The older age of some of our aircraft may expose us to higher maintenance-related expenses.
In general, the costs of operating an aircraft, including maintenance expenditures, tend to increase as an aircraft ages. Additionally, older aircraft typically are less fuel-efficient than newer aircraft and may be more difficult to re-lease or sell, particularly if, due to increasing production rates by aircraft manufacturers or airline insolvencies, older aircraft are competing with a greater supply of newer aircraft in the lease or sale market. Expenses like fuel, carbon-related charges, aging aircraft inspections, maintenance or modification programs and related airworthiness directives may reduce the economic viability of operating older aircraft and may result in increased lessee defaults. We may also incur some of these increased maintenance expenses and regulatory costs upon acquisition or re-leasing of our aircraft. In
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addition, the re-leasing of larger wide-body aircraft may result in higher reinvestment and maintenance expenditures than re-leasing narrow-body aircraft.
The concentration of aircraft or engine types in our portfolio could lead to adverse effects on our business should any difficulties specific to a particular type of aircraft or engine occur.
Our portfolio is concentrated in certain aircraft and engine types. The supply of commercial aircraft is dominated by Airbus and Boeing and there are a limited number of engine manufacturers. Should any aircraft or engine types or any manufacturers encounter disruptions, including supply chain issues, manufacturing and quality control issues, financial instability or other difficulties, it would cause a decrease in the value of these assets, an inability to lease them on favorable terms or at all, or a potential grounding of these aircraft or engines, which may adversely impact our financial results, to the extent the affected type comprises a significant percentage of our portfolio.
Certain engine‑specific issues have adversely affected parts of the commercial aviation industry in recent years. For example, there has been an ongoing impact related to Pratt & Whitney geared turbofan engines, which has resulted in the temporary grounding of a significant number of Airbus A320 family aircraft worldwide. While these issues may moderate over time, they are expected to persist into the latter part of the decade, and could continue to result in reduced aircraft utilization, higher maintenance costs or extended downtime. In addition, delays in aircraft or engine deliveries from manufacturers, including Airbus and Boeing, could also adversely affect our business, results of operations, financial condition, and liquidity. Elevated levels of engine groundings may place additional pressure on maintenance facilities and engine repair shops. As a result, there may be insufficient capacity at maintenance, repair and overhaul facilities to perform required inspections, repairs or overhauls on a timely basis, which could further extend engine downtime and adversely affect aircraft utilization and lease revenues.
We operate in a highly competitive market for investment opportunities and for the leasing and sale of aircraft.
The aircraft leasing industry is highly competitive and we compete with other lessors, airlines, aircraft manufacturers, financial institutions, aircraft brokers and other investors with respect to aircraft acquisitions, leasing and sales.
A number of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances, lower investment return requirements or different assessments of credit, residual value or market risk, which could allow them to consider a wider variety of investments, establish more relationships, bid more aggressively on aviation assets available for sale and offer lower lease rates or sales prices than we can. Some of our competitors may provide financial services, maintenance services or other inducements to potential lessees or buyers that we are unable or unwilling to provide. As a result of competitive pressures, we may not be able to take advantage of attractive investment opportunities, and we may not be able to identify and make investments that are consistent with our investment objectives. Additionally, the barriers to entry in the aircraft acquisition and leasing market are comparatively low, and new entrants appear from time to time. We may not be able to compete effectively against present and future competitors in the aircraft acquisition, leasing or sales market.
Periods of prolonged aircraft delivery delays may cause some aircraft lessors to adjust their investment strategies, including increasing their focus on secondary market acquisitions. To the extent such shifts occur, competition in the secondary market may intensify, which could adversely affect acquisition pricing, asset availability or our ability to execute our growth strategy.
Risks Related to Our Leases
If lessees are unable to fund their maintenance obligations on our aircraft, we may incur increased costs at the conclusion of the applicable lease.
The standards of maintenance observed by lessees and the condition of the aircraft may affect the future values and rental rates for our aircraft.
Under our leases, the lessee is responsible for maintaining the aircraft and complying with all governmental requirements applicable to the lessee and the aircraft, including, operational, maintenance, and registration requirements
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and airworthiness directives, although in certain cases we may agree to share certain of these costs. Failure of a lessee to perform required aircraft maintenance or required airworthiness directives could result in a decrease in value of such aircraft, an adverse effect on our ability to lease the aircraft at favorable rates or at all, or a potential grounding of such aircraft, and will likely require us to incur increased maintenance and modification costs upon the expiration or earlier termination of the applicable lease, which could be substantial, to restore such aircraft to an acceptable condition. If any of our aircraft are not subject to a lease, we would be required to bear the entire cost of maintaining that aircraft and performing any required airworthiness directives.
Our leases may require the lessee to make periodic payments to us during the lease term to provide reserves for major maintenance events. In such cases, we generally have an obligation to reimburse the lessee for qualifying maintenance once performed. Other leases do not provide for any periodic maintenance reserve payments and, instead, typically require the lessee to make payments at the end of the lease term. However, if such lessees default, the value of the aircraft could be negatively affected by the maintenance condition and we may be required to fund the entire cost of performing major maintenance on the relevant aircraft without having received compensating maintenance payments from these lessees.
Even if we receive maintenance payments, these payments may not cover the entire expense of the scheduled maintenance they are intended to fund. In addition, maintenance payments typically cover only certain scheduled maintenance requirements and may not cover all required maintenance and all scheduled maintenance. As a result, we may incur unanticipated or significant costs at the conclusion of a lease.
Failure to pay certain potential additional operating costs could result in the grounding or arrest of our aircraft and prevent the re-lease, sale or other use of our aircraft.
As in the case of maintenance costs, we may incur other operational costs upon a lessee default or where the terms of the lease require us to pay a portion of those costs. Such costs include:
•the costs of casualty, liability and political risk insurance and the liability costs or losses when insurance coverage has not been or cannot be obtained as required, or is insufficient in amount or scope;
•the costs of licensing, exporting or importing an aircraft, airport charges, customs duties, air navigation charges, landing fees and similar governmental or quasi-governmental impositions, which can be substantial;
•penalties and costs associated with the failure of lessees to keep aircraft registered under all appropriate local requirements or obtain required governmental licenses, consents and approvals; and
•carbon taxes or other fees, taxes or costs imposed under emissions limitations, climate change regulations or other initiatives.
The failure to pay certain of these costs can result in liens on the aircraft. The failure to register the aircraft can result in a loss of insurance. These matters could result in the grounding or arrest of the aircraft and prevent the re-lease, sale or other use of the aircraft until the problem is cured.
Our lessees may have inadequate insurance coverage or fail to fulfill their respective indemnity obligations, which could result in us not being covered for claims asserted against us.
By virtue of holding title to the aircraft, lessors may be held strictly liable for losses resulting from the operation of aircraft or may be held liable for those losses based on other legal theories. Liability may be placed on an aircraft lessor in certain jurisdictions even under circumstances in which the lessor is not directly controlling the operation of the aircraft.
Lessees are required under our leases to indemnify us for, and insure against, liabilities arising out of the use and operation of the aircraft, including third-party claims for death or injury to persons and damage to property for which we may be deemed liable. Lessees are required to maintain public liability, property damage and hull all risk and hull war risk insurance on the aircraft at agreed upon levels. However, they are not generally required to maintain political risk insurance. Following the September 11, 2001 terrorist attacks and, more recently, the Russian invasion of Ukraine, aviation insurers have reassessed their coverage and significantly increased premiums. Aviation insurers significantly reduced the amount of insurance coverage available to airlines for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. At the same time, they significantly increased the premiums for such third-party war risk and terrorism liability insurance and coverage in general. As a result, the amount of such third-party war risk and terrorism liability insurance that is commercially available at any time may be below the amount stipulated in our leases.
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Our lessees’ insurance (including any available governmental supplemental coverage) and our contingent and possessed insurance may not cover, or be sufficient to cover, all types of claims that may be asserted against us and recovery may also be subject to aggregate limits. Any inadequate insurance coverage or default by lessees in fulfilling their indemnification or insurance obligations will reduce the proceeds that would be received by us upon an event of loss under the respective leases or upon a claim under the relevant liability insurance.
Failure to obtain certain required licenses and approvals could negatively affect our ability to re-lease or sell aircraft.
A number of our lessees must obtain licenses, consents or approvals from governmental or regulatory authorities in order to import or operate the aircraft or comply with the terms of their leases. These may include consents required for certain payments under the leases and for the import, export or deregistration of the aircraft. Subsequent changes in applicable law or administrative practice may increase such requirements and a governmental consent, once given, might be withdrawn. Consents needed in connection with future re-leasing or sale of an aircraft may not be forthcoming. Any of these events could adversely affect our ability to re-lease or sell aircraft.
Risks Related to Our Operations
Escalating tariffs, trade tensions, and protectionist measures may adversely affect our business, financial condition and results of operations.
Our business relies on the global movement of aircraft across international borders, and our airline customers operate in a highly interconnected global marketplace. More recently, certain governments have introduced new tariffs or expanded existing trade and protectionist measures, and such measures continue to evolve, creating ongoing uncertainty that may affect our operations. Protectionist policies in key markets worldwide, including the United States, the E.U. and China, may impact where we can source aircraft acquisitions, place and deliver aircraft, and sell or dispose of aircraft and other flight equipment. The implementation and enforceability of trade restrictions, or the expansion, modification or re-imposition of existing tariffs and other trade barriers may negatively impact our business and financial performance, including, but not limited to:
•tariffs on aircraft, engines and related components, which may increase aircraft acquisition costs, maintenance, expenses or operating costs borne by us or our lessees;
•retaliatory or reciprocal trade measures may disrupt global supply chains for aircraft and engine manufacturers, potentially resulting in delivery delays, reduced production rates or increased costs;
•restrictions, approvals or other regulatory requirements affecting cross-border leasing, financing, ownership or transfer of aircraft, which could complicate, delay or prevent transactions or limit our ability to place aircraft with certain lessees;
•trade restrictions or route-specific limitations may impair our lessees' ability to operate profitably in certain markets, potentially affecting their financial condition and ability to meet lease payment obligations; and
•broader geopolitical or economic instability arising from prolonged trade disputes, which may affect regions where we have significant assets deployed or reduce demand for air travel in certain markets.
Given the ongoing and dynamic nature of global trade policies and related uncertainties, it is difficult to predict the scope, timing, duration, enforceability or impact of tariffs, trade restrictions or related government actions, or their cumulative effect on us, our lessees or aircraft and engine manufacturers. Unfavorable trade policies, including tariffs, export and import restrictions, sanctions or other regulatory controls and uncertainties regarding the ability to obtain refunds for previously paid tariffs that have been invalidated, may adversely affect our business, financial condition, and results of operations.
Events outside of our control, including economic downturns, the threat or realization of epidemic or pandemic diseases, terrorist attacks, war or armed hostilities between countries or non-state actors, and natural disasters may adversely affect the demand for air travel, the financial condition of our lessees and of the aviation industry more broadly, and may ultimately impact our business.
Air travel can be disrupted, sometimes severely, by the occurrence of unexpected events outside of our and our lessees’ control. Such events may include disruptions to government operations, including partial or full shutdowns of government services, which could result in reduced staffing or operational constraints at airports or aviation-related
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agencies, such as the Transportation Security Administration, leading to longer security wait times, flight delays or reduced passenger demand.
The occurrence of any such event, or multiple such events, could cause our lessees to experience decreased passenger demand, higher operating and financing costs and lower revenues, which could adversely affect their ability to make lease payments to us. These conditions may lead to lease restructurings, defaults or repossessions, reduce our lease revenues and cash flows, and could require us to record impairment charges to the extent we cannot recover our investment in affected aircraft assets.
Passenger demand for air travel has been materially affected by epidemic and pandemic diseases. Most recently, the COVID-19 pandemic resulted in a significant decline in global air travel levels, and prior epidemics and health events, including severe acute respiratory syndrome, bird flu, swine flu, the Zika virus, and Ebola, have also negatively affected air travel. Such events have resulted, and similar events in the future may result, in prolonged periods of depressed air traffic, which may lead to weaker demand for certain aircraft types as well as airline customer defaults, bankruptcies or reorganizations. To the extent our lessees lack sufficient liquidity to withstand such periods, and are unable to obtain funding from private, government or other sources, we may be required to provide lease concessions, including deferrals or broader lease restructurings, which may negatively impact our business, financial condition, cash flows and results of operations. Future epidemic or pandemic diseases, or the fear of such events, could similarly provoke responses that negatively affect passenger air travel.
The airline industry has also been disrupted by terrorist attacks and by war or armed hostilities between countries or non-state actors, as well as the threat or fear of such events. These events may lead to reduced passenger demand and revenues due to safety concerns, additional security measures, increased fuel prices, higher financing costs, and difficulty in raising funds on favorable terms, or at all. In addition, these events may lead to higher costs of aircraft insurance or reduced availability of coverage, for future claims caused by acts of war, terrorism, sabotage, hijacking and other similar perils. They may also lead to higher insurance costs due to the increased security measures and potential special charges, such as those related to the impairment of aircraft and other long-lived assets stemming from the above conditions. More recently, armed conflicts and regional instability, including in parts of Russia, Ukraine and the Middle East, have and may continue to have adverse effects on macroeconomic conditions, including fuel prices, the availability and cost of insurance, security conditions, currency exchange rates and financial markets. Airspace closures have and may require certain of our airline customers to continue re-routing flights to avoid such airspace which has resulted in increased flight times and fuel costs. Prolonged or expanded conflicts could result in new or additional sanctions, embargoes, further escalation or regional instability, and geopolitical shifts. Such geopolitical instability and uncertainty could have a negative impact on our ability to lease aircraft, collect payments from, and support customers in certain regions based on trade restrictions, embargoes and export control law restrictions, and logistics restrictions, including closures of air space, and could materially adversely affect our business, financial condition, and results of operations.
Natural disasters or other natural phenomena, such as severe weather conditions, floods, earthquakes or volcanic eruptions, may also disrupt air travel or airline operations in affected regions and could have an adverse effect on our lessees’ ability to satisfy their lease payment obligations to us.
Volatile financial market conditions may adversely impact our liquidity, our access to capital and our cost of capital and may adversely impact the airline industry and the financial condition of our lessees.
We may, from time to time, seek to opportunistically refinance, amend, re-price or otherwise replace our debt, obtain additional debt financing or enter into other financing arrangements, reduce or extend our debt, lower our interest payments or cost of capital available, or otherwise improve our financial position or the terms of our debt or other financing agreements. These actions may include open market or negotiated debt repurchases, repayments, redemptions or retirements of our debt or other financing arrangements.
The amount of debt that may be borrowed or issued, refinanced, repurchased, repaid, redeemed or otherwise retired, if any, will depend on prevailing market conditions, the trading levels of our debt, our cash position, compliance with our debt covenants and other factors. The availability and pricing of debt financing are subject to volatility and remain susceptible to global events, including economic downturns, political changes, rising interest rates, currency fluctuations, and the rate of international economic growth. If we need, but are unable, to obtain adequate capital on satisfactory terms, or at all, as a result of negative conditions in the capital markets or otherwise, our business, financial condition and results of operations could be materially adversely affected.
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We bear the risk of re-leasing and selling our aircraft.
We bear the risk of re-leasing or selling our aircraft in order to generate cash flows. Only a portion of an aircraft’s value is supported by contractual cash flows from leases, and we are therefore exposed to the risk that the residual value will not be sufficient to permit us to fully recover our investment, which could require us to record impairment charges. In certain cases, we commit to purchase aircraft that are not subject to lease and therefore are subject to lease placement risk.
Other factors that may affect our ability to fully realize our investment in our aircraft, and that may increase the likelihood of impairment charges, include credit deterioration or default by a lessee, higher fuel prices which may reduce demand for older, less fuel-efficient aircraft, changes in environmental regulations or emissions requirements, age restrictions, customer preferences and other factors that may shorten the economic lives or reduce the marketability of certain aircraft types.
We own and lease long-lived assets, and adverse market conditions or customer defaults may require us to write down the value of some of our assets.
We perform recoverability assessments of our aircraft and other flight equipment at least annually, and more frequently when events or changes in circumstances indicate that the carrying amount or net book value of an asset may not be recoverable. We perform aircraft-specific recoverability tests whenever such indicators exist. For assets with indicators of impairment, we assess whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value. These undiscounted cash flows include cash flows from currently contracted lease rentals and maintenance payments, future projected lease rates and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft. If an aircraft does not meet the recoverability test, the aircraft will be written down to its estimated fair value, resulting in an impairment charge.
Our estimates and assumptions are based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third-party industry sources. The factors considered in estimating the undiscounted net cash flows are subject to change in future periods and may be affected by changes in projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors, such as the location of the aircraft and accessibility to records and technical documentation. If our estimates or assumptions change, we may revise our cash flow assumptions and record future impairment charges.
Departure of key officers could harm our business and financial results.
Our senior management’s reputations and relationships with lessees, sellers, buyers and financiers of aircraft are a critical element of our business. We face intense competition for qualified personnel from other companies in the aircraft leasing industry, and we believe there is a limited pool of executives with the requisite experience in our industry. The Company seeks to maintain a pipeline of senior management talent to support continuity and succession planning, including for the Chief Executive Officer position and other key leadership positions. Our Board of Directors is actively involved in succession planning, including regular review of short- and long-term succession plans for senior positions. Our future success depends, to a significant extent, upon the continued service of our senior management personnel, including the Chief Executive Officer, and if we lose one or more of these individuals, our business could be adversely affected.
We are subject to risks related to our indebtedness that may limit our operational flexibility and our ability to compete with our competitors.
As of February 28, 2026, our total indebtedness was $5.3 billion, representing 66% of our total capitalization. Aircastle Limited is either the principal or co-obligor on, or has guaranteed, most of this indebtedness, and we are responsible for the timely payment of amounts due and compliance with covenants under the related debt documentation. We may be unable to generate sufficient cash to pay, when due, the principal of, interest on or other amounts due with respect to our indebtedness. Our substantial amount of indebtedness may increase our vulnerability to adverse economic and industry conditions, reduce our flexibility in planning for or reaction to changes in our business or industry, and adversely affect our cash flow and our ability to operate our business and compete effectively with our competitors. Our indebtedness subjects us to certain risks, including:
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•while our current levels of secured indebtedness are limited, future increases in secured indebtedness may require us to pledge aircraft or other assets as collateral, which could limit our flexibility to sell or otherwise dispose of such aircraft, restrict our ability to incur additional indebtedness, or require us to apply proceeds from asset sales to repay such indebtedness;
•failure to comply with the terms of our indebtedness, including restrictive covenants, may result in additional interest being due, events of default or the acceleration of principal and unpaid interest on such indebtedness, and may result in the forfeiture of aircraft pledged as collateral; and
•non-compliance with covenants prohibiting certain investments and other restricted payments, raising additional capital or refinancing our existing debt, may reduce our operational flexibility and limit our ability to refinance.
Our ability to obtain debt financing and our cost of debt financing is, in part, dependent upon our credit ratings and a credit downgrade or being put on negative watch could adversely impact our financial results.
Maintaining our credit ratings depends on our financial performance and on other factors, including the outlook of the ratings agencies on our sector and on the market generally. A downgrade of our credit rating or placement on negative watch may make it more difficult or costly for us to raise debt financing in the unsecured bond market, or may result in higher pricing or less favorable terms under other financings. Any such downgrade or negative watch may make it more difficult or more costly for us to satisfy our funding requirements. Any future tightening of capital or regulation of financial institutions could impact our ability to raise funds in the commercial bank loan market in the future.
An increase in our borrowing costs may adversely affect our earnings.
We primarily finance our business through the issuance of senior notes. As our senior notes mature, we may be required to repay them by issuing new senior notes, which could result in higher borrowing costs, or repay them by using cash on hand or cash from the sale of our assets.
The provisions of our long-term financings require us to comply with financial and other covenants. Our compliance with these ratios, tests and covenants depends upon, among other things, the timely receipt of lease payments from our lessees and upon our overall financial performance.
•Senior Notes. Our senior note indentures impose operating and financial restrictions on our activities. These restrictions limit our ability to, or in certain cases prohibit us from incurring liens and include a cross-default to certain other financings of the Company.
•Unsecured Revolving Credit Facilities and Term Loan. Our unsecured revolving credit facilities and term loan contain $1.1 billion minimum net worth covenants, minimum unencumbered asset ratios, minimum fixed coverage ratios and cross-defaults to certain other financings of the Company.
The terms of our financings also restrict our ability to incur or guarantee additional indebtedness or engage in mergers, amalgamations or consolidations among our subsidiary companies or between a subsidiary company and a third party or otherwise dispose of all or substantially all of our assets.
We are subject to various risks and requirements associated with foreign laws, rules and regulations.
The international nature of our business exposes us to trade and economic sanctions and other restrictions imposed by the U.S. and other governments. The U.S. Departments of Justice, Commerce and Treasury, as well as other agencies and authorities have a broad range of civil and criminal penalties, they may seek to impose against companies for violations of export controls, the Foreign Corrupt Practices Act (“FCPA”), and other federal statutes, sanctions and regulations, including those established by the Office of Foreign Assets Control (“OFAC”). Increasingly, similar or more restrictive foreign laws, rules and regulations, including the U.K. Bribery Act (“UKBA”), and European laws and regulations may also apply to us. By virtue of these laws and regulations, we may be obliged to limit our business activities, we may incur costs for compliance programs and we may be subject to enforcement actions or penalties for noncompliance. In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws, and we expect the relevant agencies to continue to increase these activities.
We have compliance policies and training programs in place for our employees with respect to FCPA, OFAC Regulations, UKBA and similar laws, but there can be no assurance that our employees, consultants or agents will not
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engage in conduct for which we may be held responsible. Violations of FCPA, OFAC Regulations, UKBA and other laws, sanctions or regulations may result in severe criminal or civil penalties, and we may be subject to other liabilities.
The General Data Protection Regulation (“GDPR”) requires us to protect certain personal data of E.U. citizens. While we have implemented processes and controls to comply with GDPR requirements, the manner in which the E.U. will interpret and enforce certain provisions remains unclear and we could incur significant fines of up to 4% of worldwide revenue, individual damages and reputational risks if the E.U. determines that our controls and processes are ineffective and we have failed to adequately comply with the requirements.
We are dependent upon information technology systems, which are subject to disruption, damage, failure and risks associated with implementation and integration.
We are dependent upon information technology systems to manage, process, store and transmit information associated with our operations, which may include proprietary business information and personally identifiable information of our customers, suppliers and employees. Our information technology systems are subject to disruption, damage or failure from a variety of sources, including malware, ransomware, security breaches, cyber-attacks, cybersecurity incidents, employee error and defects in design, any of which could be enhanced or facilitated by artificial intelligence. There may also be an elevated risk of cyber-attacks and cybersecurity incidents by certain countries based on geopolitical tensions and events. Damage, disruption, or failure of information technology systems may result in interruptions to our operations or may require a significant investment to fix or replace them or may result in significant damage to our reputation. Although various measures have been implemented to manage our risks related to the information technology systems and network disruptions, our resources and technical sophistication may not be adequate to prevent all types of cyber-attacks and cybersecurity incidents that could lead to the payment of fraudulent claims, loss of sensitive information, including our own proprietary information or that of our customers, suppliers and employees, and could harm our reputation and result in lost revenues and additional costs and potential liabilities.
Risks Related to Our Organization and Structure
We are a holding company with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations.
Aircastle Limited is a holding company with no material direct operations. Our principal assets are the equity interests we directly or indirectly hold in our operating subsidiaries. As a result, we are dependent on loans, dividends, distributions and other payments from our subsidiaries to generate the funds necessary to meet our financial obligations, including our debt service obligations. Although there are currently no material legal restrictions on our operating subsidiaries’ ability to distribute assets to us, legal restrictions, including governmental regulations and contractual obligations, or future debt agreements entered into by us or our subsidiaries, could restrict, prohibit or impair our operating subsidiaries’ ability to pay dividends or make loan or other distributions to us. Our subsidiaries are legally distinct from us and may be prohibited or restricted from paying dividends or otherwise making funds available to us under certain conditions.
Risks Related to Taxation
If Aircastle were treated as engaged in a trade or business in the United States, it would be subject to U.S. federal income taxation on a net income basis, which would adversely affect our business.
If, contrary to expectations, Aircastle were treated as engaged in a trade or business in the United States, the portion of its net income, if any, that was “effectively connected” with such trade or business would be subject to U.S. federal income taxation at a maximum rate of 35% for taxable years ending on or prior to December 31, 2017 and 21% for taxable years beginning after December 31, 2017 (such rate, the “Federal Rate”). In addition, Aircastle would be subject to the U.S. federal branch profits tax on its effectively connected earnings and profits at a rate of 30%. The imposition of such taxes would adversely affect our business.
The U.S. Corporate Alternative Minimum Tax (“AMT”) proposals may impact our effective tax rate in future periods.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (the “IRA”). The IRA includes a provision which imposes a 15% minimum tax on adjusted financial statement income (“AFSI”) for corporations. For a corporation that is a member of a foreign-parented multi-national group, the AMT applies where (i) the three-year
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average annual AFSI from all members of the foreign-parented multi-national group exceeds $1 billion, and (ii) the three-year average annual AFSI from the group’s U.S. corporation(s) is $100 million or more. The application of the corporate alternative minimum tax remains subject to evolving administrative guidance, including proposed regulations issued by the U.S. Department of the Treasury, and any final regulations or other guidance could differ materially from currently available guidance.
We do not currently expect the corporate alternative minimum tax to have a material impact on our financial position. However, we will continue to evaluate the impact as further information becomes available.
If there is not sufficient trading in shares of our ultimate parent company, or if 50% of such shares are held by certain 5% shareholders, we could lose our eligibility for an exemption from U.S. federal income taxation on rental income from our aircraft used in “international traffic” and could be subject to U.S. federal income taxation, which would adversely affect our business.
We expect that we are currently eligible for an exemption under Section 883 of the Internal Revenue Code of 1986, as amended (the “Code”), which provides an exemption from U.S. federal income taxation with respect to rental income derived from aircraft used in international traffic by certain foreign corporations. No assurances can be given that we will continue to be eligible for this exemption. To qualify for this exemption in respect of rental income, the lessor of the aircraft must be organized in a country that grants a comparable exemption to U.S. lessors (Bermuda and Ireland each do), and certain other requirements must be satisfied. We can satisfy these requirements in any year if, for more than half the days of such year, our shares are primarily and regularly traded on a recognized exchange and certain shareholders, each of whom owns 5% or more of our shares (applying certain attribution rules), do not collectively own more than 50% of our shares. Following the Merger, these stock ownership requirements are currently tested at the Marubeni and Mizuho Leasing levels such that Aircastle and its subsidiaries can continue to qualify for the Section 883 exemption if the stock of Marubeni is considered to be primarily and regularly traded on a recognized stock exchange and non-qualifying 5% or greater shareholders are not considered to collectively own more than 50% of Marubeni’s shares, as described above. If Marubeni’s shares cease to satisfy these requirements, then we may no longer be eligible for the Section 883 exemption with respect to rental income earned by aircraft used in international traffic. If we were not eligible for the exemption under Section 883 of the Code, we expect that the U.S. source rental income of Aircastle Bermuda generally would be subject to U.S. federal taxation, on a gross income basis, at a rate of not in excess of 4% as provided in Section 887 of the Code. If, contrary to expectations, Aircastle Bermuda did not comply with certain administrative guidelines of the Internal Revenue Service, such that 90% or more of Aircastle Bermuda’s U.S. source rental income were attributable to the activities of personnel based in the United States, Aircastle Bermuda’s U.S. source rental income would be treated as income effectively connected with the conduct of a trade or business in the United States. In such case, Aircastle Bermuda’s U.S. source rental income would be subject to U.S. federal income taxation on its net income at the Federal Rate as well as state and local taxation. In addition, Aircastle Bermuda would be subject to the U.S. federal branch profits tax on its effectively connected earnings and profits at a rate of 30%. The imposition of such taxes would adversely affect our business.
We are subject to risks related to the Bermuda Economic Substance Act 2018.
Pursuant to the Economic Substance Act 2018 (as amended) of Bermuda (the “ESA”) that came into force in January 2019, a resident entity, other than an entity which is resident for tax purposes in certain jurisdictions outside Bermuda, that carries on as a business in any one or more of the “relevant activities” referred to in the ESA must comply with economic substance requirements. The ESA may require in-scope Bermuda entities which are engaged in such “relevant activities” to be directed and managed in Bermuda, have an adequate level of qualified employees in Bermuda, incur an adequate level of annual expenditure in Bermuda, maintain adequate physical presence in Bermuda or perform core income-generating activities in Bermuda. The list of “relevant activities” includes, among other things, carrying on any one or more of: insurance, financing and leasing (which excludes operating leases), headquarters, intellectual property and holding entities.
Entities subject to the economic substance requirements are required to evidence their compliance and file an economic substance declaration with the Registrar of Companies in Bermuda on an annual basis.
Any entity that must satisfy economic substance requirements but fails to do so could face financial penalties, a restriction of its business activities, automatic reporting by the Bermuda authorities to the competent authorities in the E.U. or other jurisdiction of the entity’s beneficial owners, on an entity’s non-compliance or being struck-off as a
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registered entity in Bermuda. If any one of the foregoing were to occur it may adversely affect the business operations of the Company or its Bermuda subsidiaries.
The Company and its Bermuda subsidiaries believe they have complied with the ESA requirements and have filed, and will continue to file, annual economic substance declarations with the Registrar of Companies in Bermuda as required. The Registrar of Companies in Bermuda ultimately assesses compliance with the ESA requirements.
We are subject to a Corporate Income Tax Regime in Bermuda.
In December 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act (“CIT Act”) which imposes a 15% corporate income tax effective for tax years beginning on or after January 1, 2025. Accordingly, the Company is subject to Bermuda corporate income tax with respect to its fiscal year beginning March 1, 2025 and subsequent years as a Bermuda constituent entity of a multi-national group. A multi-national group is defined for these purposes as a group with entities in more than one jurisdiction with consolidated revenues of at least €750 million for two out of the four previous fiscal years. Bermuda constituent entities of a multi-national group are subject to a 15% tax on the net taxable income of such constituent entities as determined in accordance with and subject to the adjustments set out in the CIT Act (including in respect of foreign tax credits applicable to the Bermuda constituent entities).
We may become subject to an increased rate of Irish taxation which would adversely affect our business.
Previously, Irish Revenue had issued certain confirmations regarding the application of the 12.5% tax rate to activities, such as leasing and financing, undertaken by Irish lessors. Irish Revenue has advised that these confirmations no longer apply, effective as of January 1, 2024. Instead, certain aspects of the Irish leasing regime have been codified into law in Finance Act (No. 2) 2023 and Irish Revenue released guidance in January 2024 regarding the tax treatment of leasing companies. The combination of the revised law and guidance could impose a higher threshold on our Irish lessors and financing companies when demonstrating they have sufficient activity to avail themselves of the 12.5% tax rate on their leasing and financing activity. The changes, along with any associated restructuring that may be required, could increase our Irish effective tax rate.
Our Irish subsidiaries and affiliates are expected to be subject to corporation tax on their income from leasing, managing, and servicing aircraft at the 12.5% tax rate applicable to trading income. This expectation is based on certain assumptions, including that we will maintain at least the current level of our business operations in Ireland. The tax treatment of financing activity within the group, however, is much less certain. If we are not successful in achieving trading status in Ireland, the non-trading income activities of our Irish subsidiaries and affiliates would be subject to tax at the rate of 25% and capital gains would be taxed at the rate of 33%. Furthermore, certain expenses in non-trading companies may also be non-deductible for tax purposes, increasing the effective tax rate further.
The Finance Act (No. 2) 2023 also introduced outbound payment rules which apply to certain interest and royalty payments and, distributions made by a company to an “associated entity” on or after April 1, 2024. The rules apply withholding tax, or disapply existing domestic withholding tax exemptions, to certain outbound payments. Two entities will be associated if there is more than a 50% relationship in terms of share capital or ownership. Two entities will also be associated in cases where one entity has definite influence in the management of the other entity, or where the two entities are both associated entities of another entity. Transactions with unrelated third parties should not be affected by the provisions. In addition, to be in scope of the rules, the interest or royalty payment must also be made by a company to an “associated entity” that is resident in a “specified territory.”
Aircraft lease rentals are outside the scope of these rules (as they are not considered to be a royalty). There are a number of exemptions available with respect to interest payments, including where the payment is an “excluded payment.” There are also a number of exemptions available with respect to distributions, including where the payment is an “excluded payment” or the distribution is made out of income, profits or gains which have been chargeable directly or indirectly to Irish income tax, corporation tax or capital gains tax. The outbound payment rules may therefore apply to certain payments which may increase the effective tax rate in Ireland.
Ireland has implemented Pillar Two and we may incur additional top-up tax charges in future periods to ensure that the Irish companies are taxed at a minimum effective tax rate of 15%.

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We may become subject to income or other taxes in the non-U.S. jurisdictions in which our aircraft operate, where our lessees are located or where we perform certain services which would adversely affect our business.
Certain Aircastle entities are expected to be subject to the income tax laws of Bermuda, Ireland and the United States. In addition, we may be subject to income or other taxes in other jurisdictions by reason of our activities and operations, where our aircraft operate or where the lessees of our aircraft (or others in possession of our aircraft) are located. Although we have adopted operating procedures to reduce the exposure to such taxation, we may be subject to such taxes in the future and such taxes may be substantial. In addition, if we do not follow separate operating guidelines relating to managing a portion of our aircraft portfolio through offices in Ireland and Singapore, income from aircraft not owned in such jurisdictions would be subject to local tax. Changes in tax law could impose withholding taxes on lease payments during the term of a lease. Our leases typically require our lessees to indemnify us in respect of taxes, however, a lessee may fail to make such indemnification payment. The imposition of such taxes could adversely affect our business.
The introduction of Base Erosion and Profit Shifting by the Organization for Economic Cooperation and Development may impact our effective tax rate in future periods.
The Organization for Economic Cooperation and Development (the “OECD”) has introduced an action plan with respect to base erosion and profit shifting (“BEPS”). The plan targets, among other things, tax avoidance measures such as hybrid instruments, excessive interest deductions, treaty shopping, and permanent establishment avoidance.
As part of its BEPS actions, the OECD published the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting” (“MLI”). The MLI seeks to incorporate agreed tax treaty-related measures combating tax avoidance into bilateral existing tax treaties without the need to negotiate new treaties. The MLI may apply to double tax treaties entered into by other countries in which we have operations (in some cases with effect from as early as January 2019).
The MLI entered into force for Ireland in May 2019, and became effective for withholding tax on January 1, 2020. The MLI changed Ireland's treaties by including a principal purpose test (“PPT”), which will disallow treaty benefits where it is reasonable to conclude that the main purpose or one of the main purposes of a transaction or arrangement is to obtain directly or indirectly the benefits of the treaty. Given the subjectivity of the PPT, there is a risk that each counterparty jurisdiction will interpret it differently, which creates uncertainty in its application to leasing and other arrangements. Until such time as countries develop guidance on how the test will be applied, it will be difficult to determine its effect on us.
Ireland did not adopt the MLI’s “dependent agent” permanent establishment threshold. Some countries could seek a bilateral re-negotiation on the point to change the dependent agent provisions in their tax treaty with Ireland. Any such change could take some time to be agreed and subsequently ratified before it could come into effect.
Further changes to tax law will be required in order to fully implement the BEPS action plans. Currently, it is difficult to determine what further BEPS actions the governments of lessee jurisdictions will implement. Depending on the nature of the BEPS action plans adopted, it may result in an increase in our effective tax rate and cash taxes liabilities in future periods.
It is expected that Pillar Two will increase the effective tax rate of the group.
On January 29, 2019, the OECD announced an initiative to create an international consensus on new rules (referred to as “BEPS 2.0”) for the framework governing international taxation, which was supported by the publication of the Pillar One and Pillar Two Blueprint Reports (the “Blueprints”) on October 12, 2020. The stated aim is to move beyond the arm’s length principle and the scope of current taxing rights are limited to businesses with a physical presence in a country. The new rules, if adopted, would readjust the balance of taxing rights and multinational companies (“MNC”) profit allocation between jurisdictions where MNC assets are owned and the markets where users and consumers are based.
On October 8, 2021, Ireland and Bermuda, approved a statement, known as the OECD BEPS Inclusive Framework (the “IF”), providing a framework for BEPS 2.0, which builds upon the Blueprints. The IF and revised Pillar Two Blueprint include a global minimum effective tax rate of 15% for groups with annual consolidated revenue in excess of €750 million, subject to certain exclusions. On December 12, 2022, the E.U. council unanimously agreed to allow E.U. countries until December 31, 2023 to adopt the Pillar 2 rules into domestic legislation. Further guidance is expected from
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the OECD and the E.U. as to how certain aspects of the Pillar Two rules will operate mechanically, and as such it is difficult to determine the degree to which these changes may result in an increase in our effective tax rate and cash tax liabilities in future periods.
Ireland has enacted the E.U. Minimum Tax Directive into domestic legislation with effect from January 1, 2024. The legislation is largely in line with the E.U. Minimum Tax Directive and OECD Guidance. The implementation of these rules mean that the group must be taxed at a minimum effective tax rate of 15% as calculated under the Pillar 2 Global Anti-Base Erosion rules. Ireland will continue to apply the 12.5% corporation tax rate to companies with consolidated global turnover below this threshold. In Ireland, the E.U. Minimum Tax Directive has been implemented by means of a new top-up tax to achieve the effective rate of 15%. Any further guidance or directives issued by the OECD or the E.U. could alter the operation of this tax and could have an adverse impact on the group’s effective tax rate and cash tax liabilities in future periods.
The E.U. Anti-tax Avoidance proposals may impact our effective rate of tax in future periods.
The Council of the E.U. has implemented the E.U. Anti-Tax Avoidance Directives (“E.U. ATAD”) and the amending Directive (“E.U. ATAD 2”). These Directives seek to oblige all E.U. member states to introduce a number of anti-tax avoidance measures.
Most of the measures were implemented with effect from January 2019, though certain measures may have been deferred to 2024. The E.U. ATAD contemplates the introduction of a restriction on the deductibility of interest, measures in respect of certain hybrid transactions and instruments, an exit charge, a switch overrule, controlled foreign company rules as well as a general anti-avoidance rule.
The impact of the other measures in respect of certain hybrid transactions and instruments, an exit charge, a switch over rule, controlled foreign company rules as well as a general anti-avoidance rule will depend on the exact scope of these measures. The impact on the Company’s tax position (if any), will depend on the implementation of these measures in Ireland and other E.U. jurisdictions where we have operations.
The Irish Finance Bill published on October 21, 2021 included draft legislation to enact the interest limitation measures prescribed by the E.U. ATAD. The implementation date for the new law was January 1, 2022. Based on the final legislation in Finance Act 2021 signed into law on December 21, 2021, the interest limitation rule will apply to limit the deductibility of a company’s exceeding borrowing costs (i.e., its interest (and equivalent) borrowing costs as reduced by its interest (and equivalent) income) to 30% of tax adjusted EBITDA. Importantly for companies carrying on a leasing trade, a portion of their operating lease income and expense will be treated as equivalent to interest for the purposes of the test. The legislation was finalized on December 21, 2021 and Irish Revenue released guidance on the application of these rules on August 4, 2022, and updated guidance in February 2023. We currently do not expect these interest limitation rules to have a material impact on our financial position.
On December 22, 2021, the European Commission issued a proposal for a Council Directive laying down rules to prevent the misuse of shell entities for tax purposes within the E.U. (“E.U. ATAD 3”) and has since issued a number of draft amendments. On January 17, 2023, the European Parliament approved the report on the Unshell Proposal Directive. While E.U. ATAD 3 was initially expected to be adopted and published into E.U. member states’ national laws by June 30, 2023, and become effective as of January 1, 2024, there is considerable uncertainty surrounding the development of the proposal and its implementation. The proposal is subject to a consultation procedure and, in its final form, will require the unanimous approval of the E.U. Council before it is adopted. Until the proposal receives approval and a final Directive is published, it is not possible to provide definitive guidance on the impact of the proposals for us. However, at a minimum, the proposal could result in additional reporting and disclosure obligations for us.
On May 11, 2022, the European Commission issued a proposal for a Council Directive laying down rules providing for a debt-equity bias reduction allowance within the E.U. (“DEBRA”). DEBRA is intended to provide a notional interest deduction in respect of equity invested in a company, with the interest calculated based on the 10-year risk-free rate for the relevant currency, with the maximum deduction available limited to 30% of earnings before interest, tax, depreciation and amortization. At the E.U. Economic and Financial Affairs Council meeting on December 6, 2022, it was agreed that the examination of the DEBRA proposal should be suspended until other proposals in the area of corporate income tax have been put forward. Therefore, it is not clear if DEBRA will be enacted into legislation but, if it is, DEBRA could result in additional reporting and disclosure obligations.
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On December 10, 2024 the E.U. Council adopted the proposal on the Faster and Safer Tax Relief of Excess Withholding Taxes (“FASTER”) Directive. The FASTER Directive applies to dividends from publicly traded shares and, where applicable, interest from publicly traded bonds paid to registered owners who are resident for tax purposes outside a given E.U. Member State. The FASTER Directive is expected to be published in the E.U. Official Journal in 2025, and Member States will be required to transpose the Directive into national law by December 31, 2028, with the rules becoming applicable as of January 1, 2030. Until final Irish implementing legislation is published, it is not possible to provide definitive guidance on the impact, if any, of the FASTER Directive.
We operate in multiple jurisdictions and may become subject to a wide range of income and other taxes that could have a material adverse effect on our financial condition, cash flow and results of operations.
We operate in multiple jurisdictions and may become subject to a wide range of income and other taxes. If we are unable to execute our operations on a tax-efficient basis in these jurisdictions, our operations may be subject to significant income and other taxes. Moreover, as our aircraft are operated by our lessees in multiple jurisdictions, we may have nexus or taxable presence as a result of our aircraft operating in various jurisdictions. Such operations may result in us being subject to various foreign, state and local taxes in such jurisdictions. Our leases typically require our lessees to indemnify us in respect of any such taxes but if any lease does not require such indemnification or if any lessees fail to make such indemnification, our financial condition, cash flow and results of operations could be materially adversely affected if we become subject to significant income and other taxes that we are not currently subject to.
Due to the nature of our operations, our tax affairs are open to review and challenge by the tax authorities throughout the world. We are subject to routine tax audits by local authorities. Ongoing and future tax audits may result in additional tax and interest payments, which could negatively affect our financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Our cybersecurity program includes the assessment, identification and management of material risks from cybersecurity threats (as defined in Item 106(a) of Regulation S-K). To identify and assess material risks from cybersecurity threats, our annual enterprise risk management assessment considers risks from cybersecurity threats alongside other risks as part of our overall risk assessment process. In addition, we engage with consultants, internal and external auditors and other third parties to gather certain insights designed to identify and assess material risks from cybersecurity threats, their severity and potential mitigations. We also employ a range of tools and services, depending on the environment, including network and endpoint monitoring, malware detection, vulnerability assessments, cloud penetration testing, threat hunting and incident responsiveness, as well as tabletop exercises, to inform our cybersecurity risk identification and assessment. As part of our cybersecurity program, we maintain an incident response plan that includes processes to assess the severity of, escalate, contain, investigate and remediate cybersecurity incidents. We also have risk management processes to oversee and help identify risks from cybersecurity threats associated with our use of third-party service providers.
Our Board of Directors has delegated oversight of our cybersecurity program, which includes oversight of cybersecurity threats, to the Risk and Governance Committee. Throughout the year, at each quarterly Risk and Governance Committee meeting, or as needed, the committee is updated on IT security by senior management, including industry IT breaches, cybersecurity incidents and employee cybersecurity training. Our SVP, IT Operations & Security, is a Certified Information Systems Security Professional who has provided technology-related infrastructure and application management services for over 25 years and is responsible for day-to-day assessment and management of our information systems and cybersecurity program. Our SVP, IT Operations and Security, reports directly to our Chief Financial Officer.
To date, cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and, we believe, are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition. For additional description of risks from cybersecurity threats and potential related impacts on the Company, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form
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10-K, including “We are dependent upon information technology systems, which are subject to disruption, damage, failure and risks associated with implementation and integration.”

ITEM 2. PROPERTIES
We lease office space in Stamford, Connecticut, Dublin, Ireland and Singapore. The lease for our current office in Stamford, Connecticut expires in August 2028. The lease for our Dublin office expires in September 2042 and the lease on our Singapore office expires in August 2030. None of these leases are individually material to the Company’s consolidated financial statements.
We believe our current facilities are adequate for our current needs and that suitable additional space will be available as and when needed.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material legal or adverse regulatory proceedings.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
Information about our Executive Officers
Executive officers are elected by our Board of Directors, and their terms of office continue until the next annual meeting of the board or until their successors are elected and have been duly qualified. There are no family relationships among our executive officers. Information pertaining to our executive officers who held office as of April 14, 2026 is set forth below:
Michael Inglese, 65, became our Chief Executive Officer and a member of our Board in June 2017, having served as our Acting Chief Executive Officer from January 2017. He was previously our Chief Financial Officer from April 2007. Prior to joining the Company, Mr. Inglese served as an Executive Vice President and Chief Financial Officer of PanAmSat Holding Corporation, where he served as Chief Financial Officer from June 2000 until the closing of PanAmSat’s sale to Intelsat in July 2006. Mr. Inglese joined PanAmSat in May 1998 as Vice President, Finance after serving as Chief Financial Officer for DIRECTV Japan, Inc. He is a Chartered Financial Analyst who holds a BS in Mechanical Engineering from Rutgers University School of Engineering and his MBA from Rutgers Graduate School of Business Management.
Douglas C. Winter, 62, became our Chief Commercial Officer in April 2019. Prior to joining Aircastle, Mr. Winter was Vice Chairman of Amedeo, a leading aircraft asset manager, from July 2018 to March 2019, as well as Chief Executive Officer and member of the Board of Managers at Voyager Aviation (“Voyager”) from October 2017 to March 2019. Prior to this, he served as President and Chief Commercial Officer at Voyager from September 2015 to September 2017. Mr. Winter joined Voyager in June 2015 as Chief Commercial Officer. Previously, Mr. Winter was an advisor to GE Capital Aviation Services and Chief Executive Officer of Octagon Aviation from June 2013 to May 2015 and, before this, he served as Head of Global Sales at AWAS in Dublin, Ireland from December 2010 to May 2013. Mr. Winter has over 35 years of experience in commercial aviation, having started his career with McDonnell Douglas in 1985, and he holds a BS in Business from Indiana University.
Roy Chandran, 62, became our Chief Financial Officer in September 2022. From March 2020, Mr. Chandran was our Chief Strategy Officer having previously served as our Executive Vice President, Corporate Finance and Strategy from June 2017 to March 2020. He previously served as Executive Vice President of Capital Markets from May 2008. Prior to joining the Company, Mr. Chandran was a Director at Citi in the Global Structured Solutions Group, having originally joined Salomon Brothers in 1997. Before 1997, Mr. Chandran spent eight years in Hong Kong focusing on tax-based cross border leasing of transportation equipment for clients in the Asia Pacific region. Mr. Chandran holds a
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BS in Chemical Engineering from the Royal Melbourne Institute of Technology, Australia and obtained his MBA from the International Institute of Management Development (“IMD”), Switzerland.
Sarah Clarkin, 53, became our Chief Legal Officer and Secretary in March 2025. From March 2023, Ms. Clarkin was our Associate General Counsel. She joined Aircastle in 2006 and held various senior positions within the Legal Department. Prior to joining Aircastle, Ms. Clarkin was an associate with McCann FitzGerald LLP. Ms. Clarkin holds a Diploma of Legal Studies from the Dublin Institute of Technology and a BA from University College Dublin.
Paul O’Callaghan, 53, became our Chief Operations Officer in March 2023 and is responsible for portfolio operations, asset management and technical functions. From 2014, Mr. O’Callaghan was our Executive Vice President, Portfolio Management. Mr. O’Callaghan joined Aircastle in 2005 as Vice President of Technical. Prior to this, Mr. O’Callaghan held a number of technical and commercial roles at airlines both in Ireland and the U.S. Mr. O’Callaghan holds a BE in Electronic Engineering from University College Dublin.
Dane Silverman, 39, became our Chief Accounting Officer in July 2021. He was previously our Vice President, Controller from September 2018. Prior to joining Aircastle, Mr. Silverman held Controller and Assistant Controller roles at Voyager Aviation from May 2016. Prior to this, he was a Senior Manager in KPMG LLP’s audit practice. He received a BS in Accounting from Marist University and is a CPA.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks, uncertainties and assumptions. You should read the following discussion in conjunction with our historical consolidated financial statements and the notes thereto appearing elsewhere in this Annual Report. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those described under Item 1A. — “Risk Factors” and elsewhere in this Annual Report. Please see “Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995” for a discussion of the uncertainties, risks and assumptions associated with these statements. Our consolidated financial statements are prepared in accordance with U.S. GAAP and, unless otherwise indicated, the other financial information contained in this Annual Report has also been prepared in accordance with U.S. GAAP. Unless otherwise indicated, all references to “dollars” and “$” in this Annual Report are to, and all monetary amounts in this Annual Report are presented in, U.S. dollars.
OVERVIEW
Aircastle acquires, leases, and sells commercial jet aircraft to airlines worldwide. We are a leading secondary market investor, sourcing aircraft through a variety of acquisition channels, including other aircraft lessors, airlines through purchase-leaseback transactions, financial institutions and other aircraft owners, and aircraft manufacturers. We have significant experience in successfully managing aircraft throughout their life cycle, including lease and technical management, aircraft redeliveries, transitions, and asset sales or disposals. We sell aircraft and engine assets, either with a lease attached or on a part-out basis, with the objective of generating profits and reinvesting sale proceeds. Our aircraft are managed by an experienced team based in the United States, Ireland and Singapore.
As of February 28, 2026, we owned and managed 282 aircraft leased to 76 lessees located in 45 countries. The Net Book Value of our fleet was $8.5 billion as of February 28, 2026, an increase of 8% from $7.9 billion as of February 28,
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2025. The weighted average age of our fleet was 9.0 years and the weighted average remaining lease term was 5.4 years. The weighted average utilization rate of our fleet was 99% for the year ended February 28, 2026.
Our total revenues, net income and Adjusted EBITDA were $975.1 million, $194.0 million, and $945.1 million, respectively, for the year ended February 28, 2026, compared to $821.0 million, $123.6 million and $789.9 million, respectively, for the year ended February 28, 2025. Our financial performance continued to reflect strong global passenger demand for air travel and sustained demand for our narrow-body aircraft, driven by ongoing OEM delivery delays and broader supply chain constraints. These market conditions supported elevated lease extension activity and strong gains on sales, which contributed positively to our operating results. Our financial performance was also favorably impacted by additional cash settlement proceeds received in respect of our contingent and possessed insurance policies (“C&P Policies”) for aircraft formerly on lease to Russian airlines.
Acquisitions and Sales
During the year ended February 28, 2026, we acquired 46 aircraft for $1.7 billion. As of February 28, 2026, we had commitments to acquire 17 aircraft for $829.5 million, with delivery through November 2028, which include estimated amounts for pre-delivery deposits, contractual price escalations and other adjustments. As of April 14, 2026, we have acquired 1 additional aircraft and have commitments to acquire 20 aircraft for $908.9 million.
During the year ended February 28, 2026, we sold 33 aircraft and other flight equipment for net proceeds of $729.5 million and recognized gains on the sale or disposition of aircraft totaling $95.9 million. As of April 14, 2026, we have sold 2 additional aircraft.
Middle East Conflict
Recent armed conflicts and heightened geopolitical tensions in the Middle East have increased uncertainty regarding regional stability. Military actions and retaliatory measures involving multiple parties in the region have disrupted, and may continue to disrupt, commercial aviation and related economic activity, including oil markets and trade flows.
We are closely monitoring the evolving conflict and related geopolitical developments. While the ultimate impact on our business, financial condition and results of operations is currently uncertain, these hostilities have adversely affected, and an escalation or prolonged continuation of hostilities could continue to adversely affect, commercial aviation activity in the region, including through airspace closures, reduced flight operations, increased fuel and insurance costs, supply chain disruptions and broader macroeconomic effects. Such impacts could, in turn, negatively affect the financial condition and operating performance of airlines operating in, or flying through, the region, potentially resulting in lease restructurings, payment deferrals, or defaults.
As of and for the year ended February 28, 2026, our airline customers located in the Middle East represented approximately 5% of both our Net Book Value and lease rental revenue. Although our exposure to the region is limited and diversified across lessees and aircraft types, a sustained deterioration in regional or economic conditions could nevertheless have an adverse effect on our business, financial condition and results of operations.
Russian Aircraft Insurance Settlements
The Company leased 9 aircraft to Russian airlines that were unrecoverable following Russia’s invasion of Ukraine in February 2022. The Company filed claims against the reinsurers of the Russian airlines’ insurance, as well as under the Company’s C&P Policies, seeking indemnification.
During the years ended February 28, 2025 and February 29, 2024, the Company received insurance settlement proceeds of $49.5 million and $43.2 million, respectively. For the year ended February 28, 2025, the proceeds were recorded in other income and related to settlements under certain of the Company’s C&P Policies. For the year ended February 29, 2024, the proceeds were recorded within gain on sale or disposition of flight equipment and related to 4 aircraft formerly on lease to Joint Stock Company Aurora Airlines and Joint Stock Company Rossiya Airlines, resulting in the transfer of aircraft title to a Russian insurer.
In addition, during the year ended February 28, 2026, the Company recognized other income of $70.8 million related to settlement agreements with certain additional insurers under its C&P Policies.
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The receipt of the settlement proceeds serves to mitigate, in part, the Company’s losses under its aviation insurance policies. The Company continues to pursue recoveries from the remaining insurers; however, the timing and amount of any additional recoveries, including those related to insurance litigation, remain uncertain. Accordingly, at this time, the Company can give no assurance as to when or what amounts it may ultimately collect with respect to these matters.
Finance
We operate in a capital-intensive industry and have a demonstrated track record of consistently raising substantial capital from both debt and equity investors. Since our inception, we raised $2.6 billion in equity capital from private and public investors, including $500.0 million received in aggregate during the years ended February 28, 2026 and 2025, from our Shareholders. We have also obtained $25.0 billion in debt capital from a variety of sources, including the unsecured bond market, commercial banks, export credit agency-backed debt, the aircraft securitization markets and JOLCO financings. The diversity and global nature of these financing sources demonstrates our ability to adapt to changing market conditions and seize new growth opportunities.
We intend to fund new investments through cash on hand, funds generated from operations, maintenance payments received from lessees, equity offerings, unsecured bond offerings, borrowings secured by our aircraft, draws under on our revolving credit facilities and proceeds from future aircraft sales. We may repay all or a portion of such borrowings from time to time with the net proceeds from subsequent long-term debt financings, additional equity offerings or cash generated from operations and asset sales. Accordingly, our ability to execute our business strategy, particularly the acquisition of additional commercial jet aircraft or other aviation assets, depends to a significant degree on our ability to obtain additional debt and equity capital on terms we deem attractive.
See “Liquidity and Capital Resources” below.
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AIRCASTLE AIRCRAFT INFORMATION
The following table sets forth certain information with respect to our owned aircraft and aircraft managed by us as of February 28, 2026 and 2025:
As of February 28,
20262025
Owned Aircraft(Dollars in millions)
Net Book Value of Flight Equipment$8,534 $7,902 
Net Book Value of Unencumbered Flight Equipment$8,417 $7,127 
Number of Aircraft277 265 
Number of Unencumbered Aircraft273 244 
Number of Lessees76 76 
Number of Countries45 47 
Weighted Average Age (years)(1)
9.0 9.1 
Weighted Average Remaining Lease Term (years)(1)
5.4 5.4 
Weighted Average Fleet Utilization during the Fourth Quarter(2)(3)
97.7 %99.3 %
Weighted Average Fleet Utilization for the Year Ended(2)
99.1 %99.2 %
Portfolio Yield for the Fourth Quarter(4)
9.3 %9.6 %
Portfolio Yield for the Year Ended(4)
9.5 %9.4 %
Managed Aircraft
Number of Managed Aircraft(5)
5 8 
____________
(1)Weighted by Net Book Value.
(2)Aircraft on lease as a percentage of total days in period weighted by net book value.
(3)The fourth quarter of fiscal year 2025 includes 4 aircraft that were previously leased to a customer that filed for bankruptcy protection, and we expect these aircraft to remain off-lease for an extended period.
(4)Lease rental revenue, together with interest income and cash collections on our net investment in leases for the period, expressed as a percentage of the average Net Book Value for the period; quarterly information is annualized.
(5)Number of managed aircraft as of February 28, 2026 includes 4 aircraft owned by our joint venture with Mizuho Leasing.
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PORTFOLIO DIVERSIFICATION
 
Owned Aircraft as of
February 28, 2026
Owned Aircraft as of
February 28, 2025
 Number of
Aircraft		% of Net
Book Value		Number of
Aircraft		% of Net
Book Value
Aircraft Type
Passenger:
Narrow-body - new technology(1)
95 51 %77 45 %
Narrow-body - current technology165 43 %168 46 %
Wide-body12 5 %14 7 %
Total Passenger272 99 %259 98 %
Freighter5 1 %6 2 %
Total277 100 %265 100 %
Manufacturer
Airbus175 63 %179 68 %
Boeing79 29 %65 24 %
Embraer23 8 %21 8 %
Total277 100 %265 100 %
Regional Diversification
Asia and Pacific70 27 %67 28 %
Europe79 23 %99 30 %
Middle East and Africa14 5 %11 5 %
North America72 30 %58 26 %
South America36 12 %29 11 %
Off-lease6 
(2)
3 %1 — %
Total277 100 %265 100 %
 _______________
(1)Includes Airbus A320-200neo and A321-200neo, Boeing 737-MAX8 and 737-MAX9, and Embraer E2 aircraft.
(2)We currently have 6 off-lease narrow-body aircraft that are being marketed for lease. Of these aircraft, 4 were previously leased to a customer that filed for bankruptcy protection, and we expect these aircraft to remain off-lease for an extended period. Of the remaining 2 aircraft, 1 aircraft was delivered on lease to a customer during the first quarter of fiscal year 2026 and the other aircraft is expected to be delivered on lease to a customer in the second quarter of fiscal year 2026.

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The top ten customers for our owned aircraft as of February 28, 2026 were as follows:
CustomerPercent of
Net Book Value		CountryNumber of
Aircraft
IndiGo10.0%India17 
United6.9%United States12 
KLM5.6%Netherlands15 
American Airlines
4.8%United States17 
LATAM4.7%Chile13 
Frontier Airlines
4.4%United States7 
WestJet3.6%Canada7 
Viva Aerobus
3.3%Mexico8 
Lion Air(1)
3.0%Indonesia10 
Aerolineas Argentinas2.6%Argentina7 
   Total top ten customers48.9%113 
All other customers51.1%164 
   Total all customers100.0%277 
        
(1)Includes 6 aircraft on lease with 3 affiliated airlines.
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COMPARATIVE RESULTS OF OPERATIONS
Results of Operations for the year ended February 28, 2026 as compared to the year ended February 28, 2025:
 Year Ended February 28,
 20262025
 (Dollars in thousands)
Revenues:
Lease rental revenue$759,701 $652,379 
Direct financing and sales-type lease revenue20,945 21,295 
Amortization of lease premiums, discounts and incentives280 (21,682)
Maintenance revenue95,654 90,490 
Total lease revenue876,580 742,482 
Gain on sale or disposition of flight equipment95,889 77,191 
Other revenue2,650 1,302 
Total revenues975,119 820,975 
Operating expenses:
Depreciation384,028 355,666 
Interest, net282,139 247,923 
Selling, general and administrative89,483 86,416 
Provision (benefit) for credit losses(57)8,715 
Impairment of flight equipment53,323 19,391 
Maintenance and other costs17,101 16,938 
Total operating expenses826,017 735,049 
Other income (expense):
Gain (loss) on extinguishment of debt(2,973)285 
Other74,120 56,247 
Total other income:71,147 56,532 
Income from continuing operations before income taxes220,249 142,458 
Income tax provision28,863 21,948 
Earnings of unconsolidated equity method investment, net of tax2,662 3,103 
Net income$194,048 $123,613 
Revenues:
Total revenues increased $154.1 million, attributable to:
Lease rental revenue increased $107.3 million, primarily attributable to an increase of $179.4 million related to 94 aircraft purchased since March 1, 2024.
This was partially offset by a $65.3 million decrease related to the sale of 58 aircraft since March 1, 2024.
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Amortization of lease premiums, discounts and incentives:
 Year Ended February 28,
 20262025
 (Dollars in thousands)
Amortization of lease premiums$(6,839)$(11,128)
Amortization of lease discounts16,600 5,773 
Amortization of lease incentives(9,481)(16,327)
Amortization of lease premiums, discounts and incentives$280 $(21,682)
The amortization of lease premiums decreased by $4.3 million, primarily attributable to the full amortization of premiums on aircraft whose leases were extended.
The amortization of lease discounts increased by $10.8 million due to the acquisition of aircraft.
The amortization of lease incentives decreased by $6.8 million, primarily due to the reversal of lease incentive liabilities related to 2 engine redeliveries and the sale of aircraft.
Maintenance revenue. For the years ended February 28, 2026 and 2025, we recorded $95.7 million and $90.5 million, respectively, of maintenance revenue, primarily related to maintenance payments received by us and recognized into income in connection with scheduled aircraft lease expirations and engine redeliveries.
Gain on sale or disposition of flight equipment. During the year ended February 28, 2026, we sold 33 aircraft and other flight equipment for gains totaling $95.9 million. During the year ended February 28, 2025, we sold 27 aircraft for gains totaling $77.2 million.
Operating Expenses:
Total operating expenses increased $91.0 million attributable to:
Depreciation expense increased $28.4 million, primarily attributable to an increase of $68.7 million related to 95 aircraft purchased since March 1, 2024. This increase was partially offset by a decrease of $30.7 million related to 57 aircraft sold since March 1, 2024.
Interest, net increased $34.2 million due to a higher weighted average debt outstanding of $619.3 million.
Selling, general and administrative expenses increased $3.1 million primarily due to higher personnel costs.
Provision (benefit) for credit losses. During the year ended February 28, 2025, we recorded a credit provision of $8.7 million, primarily related to debt securities and certain restructured receivables in connection with an airline restructuring. No material provision for credit losses was recorded for the year ended February 28, 2026.
Impairment of aircraft. During the year ended February 28, 2026, the Company recorded total impairment charges of $53.3 million. This amount includes $35.9 million related to aircraft leased to 2 customers that filed for bankruptcy protection. For these aircraft, the Company recognized $11.5 million of maintenance and lease rentals received in advance into revenue during the same period.
The remaining $17.4 million of impairment charges were primarily transaction-related, including aircraft and engine redeliveries, and also related to other flight equipment recorded within other assets that is subject to tear-down and parts sales programs. For these items, the Company recognized $25.0 million of revenue related to maintenance, security deposits and the reversal of lease incentive liabilities during the year ended February 28, 2026.
During the year ended February 28, 2025, the Company recorded impairment charges totaling $19.4 million, including $11.0 million of transactional impairments related to a scheduled lease expiration and a lease amendment for 1 aircraft. The Company recognized $24.0 million of maintenance revenue for these aircraft during the year ended February 28, 2025.

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Other Income:
Total other income increased by $14.6 million. During the years ended February 28, 2026 and 2025, the Company entered into settlement agreements with certain insurers under its C&P Policies for aggregate settlement amounts of $70.8 million and $49.5 million, respectively, related to aircraft formerly on lease to Russian airlines.
Income Tax Provision:
Income tax provision. We recognized income tax provisions of $28.9 million and $21.9 million for the years ended February 28, 2026 and 2025, respectively. Our effective tax rate for the years ended February 28, 2026 and 2025 was 13.1% and 15.4%, respectively. The decrease in our effective tax rate was primarily attributable to the mix of profits between the various jurisdictions in which we operate, primarily driven by lower U.S. earnings and the utilization of Bermuda net operating losses.
Results of Operations for the year ended February 28, 2025, as compared to the year ended February 29, 2024:
We have omitted discussion of the above two periods covered by our consolidated financial statements presented in this Annual Report because that disclosure was already included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, filed with the SEC on April 23, 2025. You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and result of operations for the year ended February 28, 2025 to the year ended February 29, 2024.
Aircraft Valuation
For complete information on impairment of flight equipment, see Note 2 in the Notes to the Consolidated Financial Statements and “Comparative Results of Operations” above.

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APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. Our estimates and assumptions are based on historical experiences and currently available information. Actual results may differ from such estimates under different conditions, sometimes materially. A summary of our significant accounting policies is presented in the notes to our consolidated financial statements included elsewhere in this Annual Report. Critical accounting policies and estimates are defined as those that are both most important to the portrayal of our financial condition and results and require our most subjective judgments, estimates and assumptions. Our most critical accounting policies and estimates are described below.
Lease Revenue Recognition
We lease flight equipment under net operating leases with lease terms typically ranging from 3 to 7 years. We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals.
Our aircraft lease agreements generally provide for the periodic payment of fixed rent over the term of the lease, with the amount of contracted rent dependent upon the type, age, specification and condition of the aircraft, as well as market conditions at the time the lease is committed. The amount of rent we receive is also affected by a number of factors, including the creditworthiness of our lessees and the occurrence of delinquencies, restructurings and defaults. In addition, our lease rental revenues are affected by the extent to which aircraft are off-lease and our ability to remarket aircraft nearing the end of their leases in order to minimize off-lease time. Our success in re-leasing aircraft is affected by market conditions relating to our aircraft and by general industry conditions and trends. An increase in the percentage of off-lease aircraft or a reduction in lease rates upon remarketing would negatively impact our revenues.
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.
Maintenance Payments and Maintenance Revenue
Our aircraft are generally leased under net leases, pursuant to which the lessee is responsible for paying operating expenses incurred or accrued during the term of the lease, which typically include maintenance, overhaul, fuel, crew, landing, airport and navigation charges, certain taxes, licenses, consents and approvals, aircraft registration and insurance premiums. Many of our leases also contain provisions requiring us to pay a portion of the cost of aircraft modifications performed by the lessee at its expense where such modifications are mandated by recognized airworthiness authorities.
In general, the lessee is responsible for performing maintenance on the aircraft and is required to make payments for heavy maintenance, overhaul or replacement of certain high-value components. These maintenance payments are typically calculated based on hours or cycles of utilization or on calendar time, depending upon the applicable component, and are made either monthly in arrears or at the end of the lease term. Our determination of whether to require such payments to be made monthly or to permit a lessee to make a single maintenance payment at the end of the lease term depends on a variety of factors, including the creditworthiness of the lessee, the level of security deposit which may be provided by the lessee and market conditions at the time we enter into the lease. Where a lessee makes monthly maintenance payments, we are generally obligated to use such funds to reimburse the lessee for costs they incur for eligible heavy maintenance, overhaul or replacement of certain high-value components during the lease term, typically
39


following the completion of the relevant work. Where a lessee makes a single end of lease maintenance payment, the lessee would typically be required to compensate us for its utilization of the aircraft during the lease. In some cases, however, we may owe a net payment to the lessee if heavy maintenance is performed and paid for by the lessee during the lease term and the aircraft is returned to us in better condition than at lease inception.
We record monthly maintenance payments by the lessee as accrued maintenance payment liabilities in recognition of our obligation in the lease to refund such receipts, and therefore we typically do not recognize such maintenance payments as maintenance revenue during the lease. Reimbursements to the lessee upon the receipt of evidence of qualifying maintenance work are charged against the existing accrued maintenance payments liability. We currently defer maintenance revenue recognition of most monthly maintenance payments until we are able to determine the amount, if any, by which the monthly maintenance payments received from a lessee exceed costs to be incurred by that lessee in performing heavy maintenance, which generally occurs at or near the end of the lease. End of lease term maintenance payments made to us are recognized as maintenance revenue and end of lease term maintenance payments we make to a lessee are recorded as contra maintenance revenue.
The amount of maintenance revenue or contra maintenance revenue we recognize in any reporting period is inherently volatile and is dependent on a number of factors, including the timing of lease expiries, including scheduled expiries and early lease terminations, the timing of maintenance events and the utilization of the aircraft by the lessee.
Lease Incentives and Amortization
Many of our leases contain provisions that may require us to pay a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. We account for these expected payments as lease incentives, which are amortized on a straight-line basis as a reduction of revenue over the lease term. We estimate the amount of our portion for such costs, typically for the first major maintenance event for the airframe, engines, landing gear and auxiliary power units, expected to be paid to the lessee. These estimates are based on assumed utilization of the related aircraft by the lessee, the anticipated cost of the maintenance event and the estimated amounts the lessee is responsible to pay. The assumptions supporting these estimates are reevaluated annually.
This estimated lease incentive is not recognized as a lease incentive liability at the inception of the lease. We recognize the lease incentive as a reduction of lease revenue on a straight-line basis over the lease term, with the offset being recorded as a lease incentive liability, which is included in maintenance payments on the balance sheet. The payment to the lessee for the lease incentive liability is first recorded against the lease incentive liability, and any excess above the lease incentive liability is recorded as a prepaid lease incentive asset, which is included in other assets on the balance sheet and continues to amortize over the remaining lease term.
Flight Equipment Held for Lease and Depreciation
Flight equipment held for lease is stated at cost and depreciated using the straight-line method, typically over a 25-year life from the date of manufacture for passenger aircraft and over a 30 to 35-year life for freighter aircraft, depending on whether the aircraft is a converted or purpose-built freighter, to estimated residual values. Estimated residual values are generally determined to be approximately 15% of the manufacturer’s estimated realized price for passenger aircraft when new and 5% to 10% for freighter aircraft when new. Management may make exceptions to this policy on a case-by-case basis when, in its judgment, the residual value calculated pursuant to this policy does not appear to reflect current expectations of value. Examples of circumstances in which such exceptions may arise include but are not limited to:
•flight equipment where estimates of the manufacturers’ realized sales prices are not relevant (e.g., freighter conversions);
•flight equipment where estimates of the manufacturers’ realized sales prices are not readily available; and
•flight equipment which may have a shorter useful life due to obsolescence.
Major improvements and modifications incurred in connection with the acquisition of aircraft that are required to place the aircraft into initial service are capitalized and depreciated over the remaining life of the flight equipment.
For planned major maintenance activities for aircraft that are off lease, the Company capitalizes the actual maintenance costs by applying the deferral method. Under the deferral method, we capitalize the actual cost of major
40


maintenance events, which are typically depreciated on a straight-line basis over the period until the next maintenance event is required.
In accounting for flight equipment held for lease, we make estimates about the expected useful lives, the fair value of attached leases, acquired maintenance assets or liabilities and the estimated residual values. In making these estimates, we rely upon actual industry experience with the same or similar aircraft types and our anticipated utilization of the aircraft. As part of our due diligence review of each aircraft we purchase, we prepare an estimate of the expected maintenance payments and any excess costs that may become payable by us, taking into consideration the then-current maintenance status of the aircraft and the relevant provisions of any existing lease.
For purchase-lease back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the fair value of the aircraft and lease. The fair value of the lease may include a maintenance premium and a lease premium or discount.
When we acquire an aircraft with a lease attached, determining the fair value of the lease requires us to make assumptions regarding the current fair values of leases for comparable aircraft. We estimate a range of current lease rates for similar aircraft to assess whether the attached lease is within a fair value range. If the contractual lease rate is below or above the estimated market range, the Company records a lease discount or premium equal to the present value the estimated amount below or above fair value range over the remaining term of the lease. Any such lease discount or premium is amortized into lease revenue on a straight-line basis over the remaining lease term.
Impairment of Flight Equipment
We perform recoverability assessments of all our aircraft and other flight equipment at least annually, and more frequently when events or changes in circumstances indicate that the carrying amount or net book value of an asset may not be recoverable. We perform aircraft-specific recoverability tests when such indicators exist. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. We focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to value deterioration.
For assets with indicators of impairment, we assess whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value. These undiscounted cash flows include cash flows from currently contracted lease rentals and maintenance payments, future projected lease rates and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft. If an aircraft does not meet the recoverability test, the aircraft will be written down to its estimated fair value, resulting in an impairment charge.
Our estimates and assumptions are based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third-party industry sources. The factors considered in estimating the undiscounted cash flows are subject to change in future periods and may be affected by changes in projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors, such as the location of the aircraft and accessibility to records and technical documentation.
If our estimates or assumptions change, 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.
Net Investment in Leases
If a lease meets specific criteria at lease commencement or at the effective date of a lease modification, we classify the lease as a direct financing or sales-type lease. The net investment in leases consists of the lease receivable, the estimated unguaranteed residual value of the leased flight equipment at lease-end and, for direct financing leases, deferred selling profit. For sales-type leases, we recognize the difference between the net book value of the aircraft and the net investment in the lease as a gain or loss on sale of fight equipment. Selling profit on a direct financing lease is deferred and amortized over the lease term, and a selling loss is recognized at lease commencement. Interest income on our net investment in leases is recognized as direct financing and sales-type lease revenue over the lease term in a manner that
41


produces a constant rate of return on the net investment in the lease.
The net investment in leases is recorded in the consolidated financial statements net of an allowance for credit losses. The allowance for credit losses is recorded upon the initial recognition of the net investment in the lease based on the Company’s estimate of expected credit losses over the lease term. The allowance reflects the Company’s estimate of lessee default probabilities and loss given default percentages. When determining the credit loss allowance, we consider relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the net investment in the lease. The allowance also considers potential losses due to non-credit risk related to unguaranteed residual values. A provision for credit losses is recorded as a component of operating expenses to adjust the allowance for changes to management’s estimate of expected credit losses.
Fair Value Measurements
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 when events or changes in circumstances indicate that the carrying amounts of assets may not be recoverable. Assets subject to these measurements include our aircraft and investment in unconsolidated equity method investment.
We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value measurements for aircraft in impairment tests are based on a combination of valuation techniques, including market approach (Level 2 or 3), which incorporates third party appraisal data, and an income approach (Level 3), which reflects the Company’s assumptions and appraisal data regarding the present value of future cash proceeds from leasing and selling aircraft. Level 3 valuations contain significant unobservable inputs.
We account for our unconsolidated equity method investment under the equity method of accounting. Our investment 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.
Income Taxes
The Company records an income tax provision in accordance with the various tax laws for those jurisdictions within which our transactions occur. Aircastle uses an asset and liability based approach in accounting for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount estimated by us to be realizable. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities. We did not have any unrecognized tax benefits.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
See Note 1 in the Notes to Consolidated Financial Statements below.
RECENTLY PROPOSED ACCOUNTING PRONOUNCEMENTS
See Note 1 in the Notes to Consolidated Financial Statements below.





42


LIQUIDITY AND CAPITAL RESOURCES
Our business is very capital intensive, requiring significant investments in order to expand our fleet and to maintain and improve our existing portfolio. Our operations have historically generated a significant amount of cash, primarily from lease rentals and maintenance collections. We have also met our liquidity and capital resource needs by utilizing several sources over time, including:
•unsecured indebtedness, including our current unsecured revolving credit facilities, unsecured term financings and senior notes;
•various forms of borrowing secured by our aircraft, including term financings and limited recourse securitization financings for new aircraft acquisitions;
•asset sales; and
•issuance of common and preference shares.
Going forward, we expect to continue to seek liquidity from these sources and other sources, subject to pricing and conditions we consider satisfactory.
During the year ended February 28, 2026, we met our liquidity and capital resource needs with $483.1 million of cash flows from operations and $729.5 million of proceeds from the sale or disposition of aircraft and other flight equipment.
As of February 28, 2026, the weighted average maturity of our secured and unsecured debt financings was 3.1 years and we were in compliance with all applicable covenants. We have also determined that as of February 28, 2026, our consolidated subsidiaries’ restricted net assets, as defined by Rule 4-08(e)(3) of Regulation S-X, are less than 25% of our consolidated net assets.
We believe we have sufficient liquidity to meet our contractual obligations over the next 12 months. As of April 1, 2026, total liquidity of $2.6 billion included $2.0 billion of undrawn credit facilities, $0.5 billion of projected adjusted operating cash flows and sales through April 1, 2027 and $0.1 billion of unrestricted cash through April 1, 2027. In addition, we believe payments received from lessees and other funds generated from operations, unsecured bond offerings, borrowings secured by our aircraft, borrowings under our revolving credit facilities and other borrowings and proceeds from future aircraft sales will be sufficient to satisfy our liquidity and capital resource needs over the next 12 months. Our liquidity and capital resource needs include payments due under our aircraft purchase obligations, required principal and interest payments under our long-term debt facilities, expected capital expenditures, lessee maintenance payment reimbursements and lease incentive payments.
Cash Flows
Year Ended February 28,
20262025
 (Dollars in thousands)
Net cash flow provided by operating activities$483,053 $464,021 
Net cash flow used in investing activities(897,586)(970,232)
Net cash flow provided by financing activities315,370 655,286 
Operating Activities:
Cash flow provided by operating activities was $483.1 million and $464.0 million for the years ended February 28, 2026 and 2025, respectively. The year ended February 28, 2026 included higher customer collections driven by the growth of our fleet and higher lease rates on lease extensions. These increases were offset by higher cash paid for interest, primarily due to higher weighted average debt outstanding during the year ended February 28, 2026.
Investing Activities:
Cash flow used in investing activities was $897.6 million and $970.2 million for the years ended February 28, 2026 and 2025, respectively. The net decrease of $72.6 million was primarily attributable to higher proceeds from the sale or disposition of aircraft and other flight equipment of $163.6 million, partially offset by a $122.6 million increase in cash used for the acquisition and improvement of flight equipment.
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Financing Activities:
Cash flow provided by financing activities was $315.4 million and $655.3 million for the years ended February 28, 2026 and 2025, respectively. The net decrease of $339.9 million was primarily attributable to a $300.0 million decrease in proceeds from the issuance of our common shares. In addition, there were increases of $41.8 million in dividends paid to our Shareholders and $33.4 million in maintenance and security deposits returned, net of receipts. These outflows were partially offset by a $40.9 million increase in proceeds from secured and unsecured financings, net of repayments.
Debt Obligations
For complete information on our debt obligations, please see Note 8 in the Notes to Consolidated Financial Statements below.
Contractual Obligations
Our contractual obligations consist of principal and interest payments on debt financings, aircraft acquisitions and rent payments pursuant to our office leases. Total contractual obligations increased to $7.1 billion at February 28, 2026 from $6.7 billion at February 28, 2025, due to higher outstanding debt, interest obligations and aircraft purchase commitments.
The following table presents our actual contractual obligations and their payment due dates as of February 28, 2026.
 
Payments Due by Period as of February 28, 2026
Contractual ObligationsTotal1 year
or less		2-3 years4-5 yearsMore than
5 years
 (Dollars in thousands)
Principal payments:
Senior Notes due 2026-2031$4,350,000 $650,000 $2,050,000 $1,150,000 $500,000 
Unsecured Revolving Credit Facilities and Term Loan840,000 — 240,000 600,000 — 
Other Financings114,177 3,398 7,095 7,516 96,168 
Total principal payments5,304,177 653,398 2,297,095 1,757,516 596,168 
Interest payments on debt obligations(1)
922,595 259,487 425,466 205,856 31,786 
Office leases(2)
26,551 3,220 5,709 3,100 14,522 
Purchase obligations(3)
829,526 583,400 246,126 — — 
Total$7,082,849 $1,499,505 $2,974,396 $1,966,472 $642,476 
 _____________
(1)Future interest payments on variable rate, SOFR-based debt obligations are estimated using the interest rate in effect as of February 28, 2026.
(2)Represents contractual payment obligations for our office leases in the United States, Ireland and Singapore.
(3)At February 28, 2026, we had signed purchase agreements to acquire 17 aircraft for $829.5 million. These amounts include estimates for pre-delivery deposits, contractual price escalation and other adjustments. As of April 14, 2026, we have commitments to acquire 20 aircraft for $908.9 million.
Capital Expenditures
From time to time, we make capital expenditures to maintain or improve our aircraft. These expenditures include the cost of major overhauls necessary to place an aircraft in service and modifications made at the request of lessees. For the years ended February 28, 2026 and 2025, and February 29, 2024, we incurred a total of $24.0 million, $20.4 million and $76.0 million, respectively, of capital expenditures, including lease incentives, related to the acquisition and improvement of flight equipment.
As of February 28, 2026, the weighted average age of our aircraft, by Net Book Value, was 9.0 years. In general, the costs of operating an aircraft, including maintenance expenditures, increases as aircraft age. Our lease agreements generally require the lessee to be primarily responsible for maintaining the aircraft. Maintenance reserves are generally paid by the lessee to provide for future maintenance events. Provided a lessee performs scheduled maintenance of the aircraft, we are required to reimburse the lessee for qualifying maintenance payments. In certain cases, we are also required to make lessor contributions, in excess of amounts a lessee may have paid, towards the costs of maintenance events performed by or on behalf of the lessee. We may incur additional maintenance and modification costs in the
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future if we are required to remarket an aircraft or if a lessee fails to meet its maintenance obligations under the lease agreement.
Actual maintenance payments to us by lessees in the future may be less than projected as a result of a number of factors, such as a lessee default. Maintenance reserves may not cover the entire amount of actual maintenance expenses incurred and, where these expenses are not otherwise covered by the lessees, there can be no assurance that our operational cash flow and maintenance reserves will be sufficient to fund maintenance requirements, particularly as our aircraft age. See Item 1A. “Risk Factors — Risks Related to Our Business — Risks related to our leases — If lessees are unable to fund their maintenance obligations on our aircraft, we may incur increased costs at the conclusion of the applicable lease.
Off-Balance Sheet Arrangements
We have an unconsolidated equity method investment in an aircraft leasing entity with Mizuho Leasing in which we hold a 25% equity interest. As of February 28, 2026, the Net Book Value of its 4 aircraft was $146.5 million.
The assets and liabilities of this entity are not included in our consolidated balance sheets and we record our investment under the equity method of accounting. See Note 7 in the Notes to Consolidated Financial Statements.
Foreign Currency Risk and Foreign Operations
At February 28, 2026, approximately 99% of our leases are payable to us in U.S. dollars. However, we incur Euro- and Singapore dollar-denominated expenses in connection with our subsidiaries in Ireland and Singapore. For the year ended February 28, 2026, expenses, such as payroll and office costs, denominated in currencies other than the U.S. dollar totaled $25.6 million in U.S. dollar equivalents and represented approximately 29% of total selling, general and administrative expenses.
Our international operations are a significant component of our business strategy and permit us to more effectively source new aircraft, service the aircraft we own and maintain contact with our lessees. Therefore, our international operations and our exposure to foreign currency risk will likely increase over time. Although we have not entered into foreign currency hedges, if our foreign currency exposure increases we may enter into hedging transactions in the future to mitigate this risk. For the years ended February 28, 2026 and 2025, and February 29, 2024, we incurred insignificant net gains and losses on foreign currency transactions.
Management’s Use of EBITDA and Adjusted EBITDA
We define EBITDA as income (loss) from continuing operations before interest expense, income taxes, and depreciation and amortization. We use EBITDA to assess our consolidated financial and operating performance, and we believe this non-U.S. GAAP measure is helpful in identifying trends in our performance.
This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals, as well as achieving optimal financial performance. It provides an indicator for management to determine if adjustments to current spending decisions are needed.
EBITDA provides us with a measure of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. Accordingly, this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure, or expenses, of the organization. EBITDA is one of the metrics used by senior management and the Board of Directors to review the consolidated financial performance of our business.
We define Adjusted EBITDA as EBITDA (as defined above) further adjusted to give effect to adjustments required in calculating covenant ratios and compliance as that term is defined in the indenture governing our senior unsecured notes. Adjusted EBITDA is a material component of these covenants.

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The table below shows the reconciliation of net income to EBITDA and Adjusted EBITDA for the years ended February 28, 2026 and 2025, and February 29, 2024.
Year Ended February 28/29,
 202620252024
 (Dollars in thousands)
Net income$194,048 $123,613 $83,316 
Depreciation384,028 355,666 348,229 
Amortization of lease premiums, discounts and incentives(280)21,682 20,420 
Interest, net282,139 247,923 229,050 
Income tax provision28,863 21,948 23,265 
     EBITDA$888,798 $770,832 $704,280 
Adjustments:
Impairment of flight equipment53,323 19,391 55,240 
(Gain) loss on extinguishment of debt2,973 (285)— 
     Adjusted EBITDA$945,094 $789,938 $759,520 
Limitations of EBITDA and Adjusted EBITDA
An investor or potential investor may find EBITDA and Adjusted EBITDA important measures in evaluating our performance, results of operations and financial position. We use these non-U.S. GAAP measures to supplement our U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting our business.
EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be viewed in isolation or as substitutes for U.S. GAAP measures of income (loss). Material limitations in making the adjustments to our income (loss) to calculate EBITDA and Adjusted EBITDA, and using these non-U.S. GAAP measures as compared to U.S. GAAP net income (loss), income (loss) from continuing operations and cash flows provided by or used in operations, include:
•depreciation and amortization, though not directly affecting our current cash position, represent the wear and tear and/or reduction in value of our aircraft, which affects the aircraft’s availability for use and may be indicative of future needs for capital expenditures;
•the cash portion of income tax provision (benefit) generally represents charges (gains), which may significantly affect our financial results; and
•adjustments required in calculating covenant ratios and compliance as that term is defined in the indenture governing our senior unsecured notes which may not be comparable to similarly titled measures used by other companies.
EBITDA and Adjusted EBITDA are not alternatives to net income (loss), income (loss) from operations or cash flows provided by or used in operations as calculated and presented in accordance with U.S. GAAP. You should not rely on these non-U.S. GAAP measures as a substitute for any such U.S. GAAP financial measure. We strongly urge you to review the reconciliations to U.S. GAAP net income (loss), along with our consolidated financial statements included elsewhere in this report. We also strongly urge you not to rely on any single financial measure to evaluate our business. In addition, because EBITDA and Adjusted EBITDA are not measures of financial performance under U.S. GAAP and are susceptible to varying calculations, EBITDA and Adjusted EBITDA as presented in this report, may differ from and may not be comparable to similarly titled measures used by other companies.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. These risks are highly sensitive to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates. Our primary interest rate exposures relate to our floating rate debt obligations. Rent payments under our aircraft lease agreements typically do not vary
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during the term of the lease according to changes in interest rates. However, our borrowing agreements generally require payments based on a variable interest rate index, such as SOFR or an alternative reference rate. Therefore, to the extent our borrowing costs are not fixed, increases in interest rates may reduce our net income by increasing the cost of our debt without any corresponding increase in rents or other lease payments.
Sensitivity Analysis
The following discussion about the potential effects of changes in interest rates is based on a sensitivity analysis, which models the effects of hypothetical interest rate shifts on our financial condition and results of operations. Although we believe a sensitivity analysis provides the most meaningful analysis permitted by the rules and regulations of the SEC, it is constrained by several factors, including the necessity to conduct the analysis based on a single point in time and by the inability to include the extraordinarily complex market reactions that normally would arise from the market shifts modeled. Although the following results of a sensitivity analysis for changes in interest rates may have some limited use as a benchmark, they should not be viewed as a forecast. This forward-looking disclosure also is selective in nature and addresses only the potential interest expense impacts on our financial instruments. It also does not include a variety of other potential factors that could affect our business as a result of changes in interest rates.
As of February 28, 2026, a hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would result in an interest expense increase/decrease of $7.2 million and $7.2 million, respectively, over the next 12 months.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our consolidated financial statements and notes thereto, referred to in Item 15(A)(1) of this Annual Report, are filed as part of this Annual Report and appear in this Annual Report beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Management’s Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate, to allow timely decisions regarding required disclosure. An evaluation was performed under the supervision and with the participation of the Company’s management, including the CEO and CFO, of the effectiveness of the Company’s disclosure controls and procedures as of February 28, 2026. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of February 28, 2026.
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
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may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an assessment of the effectiveness of our internal control over financial reporting as of February 28, 2026. The assessment was based on criteria established in the Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of February 28, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended February 28, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Pursuant to Item 401(b) of Regulation S-K, the requisite information pertaining to our executive officers is reported immediately following Item 4 of Part I of this Annual Report. The identification of our Audit Committee and our Audit Committee financial experts is posted on our website at www.aircastle.com under “ABOUT - COMMITTEE COMPOSITION.” Information regarding our Code of Business Ethics and Conduct, any material amendments thereto and any related waivers is posted on our website at www.aircastle.com under “ESG.”
Information about our Directors. The members of the Board of Directors of the Company (the “Board”) are Douglas A. Hacker, Yasuhiko Hashimoto, Naoshi Hirose, Michael J. Inglese, Satoshi Irie, Tomoaki Ogasawara, and Charles W. Pollard.
Douglas A. Hacker, 70, was appointed to our Board on March 27, 2020 following the consummation of the Merger and served on the prior Board of Aircastle Limited from August 2, 2006 to the consummation of the Merger. Mr. Hacker is currently an independent business executive and formerly served as Executive Vice President, Strategy for UAL Corporation, an airline holding company, and has served in such position from December 2002 to May 2006. Prior to that, Mr. Hacker served with UAL Corporation as President, UAL Loyalty Services from September 2001 to December 2002, and as Executive Vice President and Chief Financial Officer from July 1999 to September 2001. Mr. Hacker served as a Director of Travelport from 2016 until May 2019. Mr. Hacker served as Board Chair of SpartanNash from 2021 to 2025 and a Director from 2005 to 2025. Mr. Hacker serves as a director or trustee of a series of open-end and closed-end investment companies that are the Columbia Threadneedle Investments family of mutual funds.
Yasuhiko Hashimoto, 60, was appointed to our Board on April 1, 2026. Mr. Hashimoto serves as Managing Executive Officer at Mizuho Leasing. He joined Mizuho Leasing in June 2021 as an Executive Officer and has since held successive leadership roles, overseeing key global business initiatives and transportation assets. Prior to joining Mizuho Leasing, he has a distinguished career spanning over 30 years at Mizuho Bank, Ltd., including serving as Executive Officer and Head of the Global Products Unit, Head of the Global Corporate Division in Tokyo, and Deputy Head of EMEA based in London. Throughout his career, he has held numerous senior positions specializing in structured finance, project finance, and global corporate banking across major financial hubs including London, New York, Houston, and Tokyo. He holds an MBA from the Stern School of Business at New York University and a Bachelor of Law degree from the University of Osaka.
Naoshi Hirose, 63, was appointed to our Board as of April 8, 2024. Currently holding the position of Senior Managing Executive Officer and serving as the Regional CEO for the Americas at Marubeni, he also holds the role of
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President and CEO of Marubeni America Corporation. Mr. Hirose joined Marubeni in January 2023 and from April 2023 he held the positions of Managing Executive Officer and Senior Operating Officer for CSO, in which he served as a Member of the Corporate Management Committee, exercising oversight of Marubeni group's business operations. Prior to joining Marubeni, Mr. Hirose served the Ministry of Economy, Trade, and Industry in Japan for over 35 years, holding key positions, including Vice-Minister for International Affairs. Mr. Hirose's academic background includes a bachelor's degree from the Faculty of Law at Tokyo University and a master's degree in Public Affairs from Princeton University. With over three decades of such experience, Mr. Hirose contributes a wealth of expertise to the Board, notably in operational management, strategic planning, and financial matters pertinent to the aviation sector.
Michael J. Inglese, 65, was appointed to the Board of Aircastle Limited on March 27, 2020, following the company’s acquisition by affiliates of Marubeni Corporation and Mizuho Leasing. He has served as Chief Executive Officer since June 2017, following a stint as Acting CEO from January 2017 and prior to that, as Chief Financial Officer from April 2007. Prior to joining Aircastle, Mr. Inglese was CFO of PanAmSat Holding Corporation, where he led financial operations through a take-private transaction, IPO, and strategic sale. He also held senior finance roles at DIRECTV Japan, Hughes Electronics, and Westinghouse Credit Corporation. Mr. Inglese holds a B.S. in Mechanical Engineering and an MBA from Rutgers University and is a Chartered Financial Analyst (CFA) and is a Certified Director from the National Association of Corporate Directors.
Satoshi Irie, 49, was appointed to our Board on April 16, 2026. Mr. Irie joined Marubeni in 1999 and is currently General Manager of Marubeni’s Asset Finance Department. From 2021 until 2025 he was General Manager of the Finance, Leasing & Real Estate department of Marubeni ASEAN Pte. Ltd., a wholly owned subsidiary of Marubeni; and he also served on the board of directors of the Singapore-headquartered fintech company AND Global Pte. Ltd. Prior to that, Mr. Irie was a General Manager in Marubeni’s Finance & Leasing Business Section III. He holds a bachelor’s degree in economics from Hitotsubashi University, Tokyo.
Tomoaki Ogasawara, 52, was appointed to our Board and appointed Chairman of our Board on April 16, 2026. Mr. Ogasawara joined Marubeni in 1996 and has held various positions during his tenure. From 2024 until March 2026, he was Managing Director of Total Engine Asset Management, the Singapore based engine leasing joint venture between Marubeni and ST Engineering. Prior to that, he served as General Manager of Marubeni’s Aircraft Leasing Business Department. Mr. Ogasawara is a graduate of Hitotsubashi University, Tokyo.
Charles W. Pollard, 68, was appointed to our Board on March 27, 2020 following the consummation of the Merger and served on the prior Board of Aircastle Limited from July 6, 2010 to the consummation of the Merger. Mr. Pollard joined Omni Air International, Inc., a passenger charter carrier, in 1997, where he served variously as Managing Director, President and CEO, and Vice Chairman until 2009. Previously, he spent 10 years in senior management positions, including President and CEO, at World Airways, Inc. Prior to joining World Airways, Inc., he practiced corporate law at Skadden, Arps, Slate, Meagher & Flom. He currently serves on the board of directors of Allegiant Travel Company.
Information about our Executive Officers. The names of the executive officers of the Company and their ages, titles and biographies may be found in: Information about our Executive Officers.
Code of Business Conduct and Ethics. To help ensure that the Company abides by applicable corporate governance standards, our Board has adopted a Code of Business Conduct and Ethics and a Code of Ethics for Chief Executive and Senior Financial Officers, which are posted on our website at http://www.aircastle.com under “ESG” and which are available in print to any shareholder of the Company upon request.
Insider Trading Policies and Procedures. We are a privately held, voluntary reporting company and there is no established public trading market for our securities. As a result, the Company has not adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers, employees and the Company itself.
Audit Committee of the Board of Directors. Tomoaki Ogasawara (Chairman), Yasuhiko Hashimoto and Douglas A. Hacker are designated as members of the Audit Committee. Roy Chandran, our Chief Financial Officer, is also a member of the Audit Committee.
In addition, our Board has determined that Mr. Hacker is qualified as an audit committee financial expert, under the SEC rules.
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ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Our 2025 fiscal year began on March 1, 2025 and ended on February 28, 2026. All references herein to a year shall mean our fiscal year unless otherwise noted.
This Compensation Discussion and Analysis describes and analyzes our executive compensation philosophy and programs. This Compensation Discussion and Analysis focuses on the compensation paid for our 2025 fiscal year to our Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers, together referred to as our named executive officers (“NEOs”). For 2025, our NEOs were:
Named Executive OfficerTitle
Michael J. IngleseChief Executive Officer
Roy Chandran
Chief Financial Officer
Douglas C. Winter
Chief Commercial Officer
Paul O’CallaghanChief Operations Officer
Sarah ClarkinChief Legal Officer & Secretary
Pay for Performance Philosophy
We believe executive compensation should be tied to Company performance weighted in favor of long-term performance, and our compensation program for 2025 rewarded executives and employees in two areas:
•Annual Corporate Performance: Achievement of corporate financial metrics focused on: (i) net income available to common shareholders; (ii) cash flow; and (iii) growth through new investments (as described below); and
•Individual Performance: Achievement of individual performance goals set at the beginning of each year.
For 2025, we granted an annual incentive compensation award in the form of a cash bonus, the payment of which was based on the achievement of a mix of corporate financial metrics and individual performance goals. For more highly compensated employees, including our NEOs, achievement of the corporate financial metrics carried a greater weighting relative to individual performance, as illustrated in the table below:
PositionCorporate PerformanceIndividual Performance
CEO85%15%
Other NEOs80%20%
2025 Corporate Financial Metrics. We based corporate performance targets on the Company’s business plan and established a performance range for each metric. Results below the low end of each range would yield a minimum contribution of 50% to the Company’s incentive compensation pool for that metric. Conversely, performance above target would result in an enhanced contribution to the Company’s incentive compensation pool, up to a 150% to 200% contribution at the upper end of the performance range for each metric. For 2025, we established the following targets, performance ranges and relative weightings for the corporate financial metrics:
Metric2025
Target
(in millions)		Performance RangeWeighted Score
Net income available to common shareholders (March 1, 2025 – February 28, 2026)(1)
$84.0 50%-200%30%
Net income available to common shareholders (April 1, 2025 – March 31, 2026)(1)
$85.0 50%-200%20%
Cash flow(2)
$454.0 50%-150%25%
Net investments(3)
$1,750.0 50%-150%25%
_______________
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(1)In 2025, net income available to common shareholders replaced profit before tax as a corporate performance metric to better align performance evaluation with shareholder value. Two measurement periods were used to reflect differences in fiscal year periods between the Company and its common shareholders.
(2)Cash flow for a period is Cash Flow from Operations.
(3)New investments measures the total annual amount invested in aviation assets.
Individual Performance Goals. We set individual performance goals for every employee at the beginning of each year and measure each employee’s performance against those goals at the end of the year to determine incentive compensation levels. We set individual bonus targets based on an employee’s function, role and seniority within the organization, among other factors.
For 2025, we determined the final amount of our annual incentive compensation awards for each employee by applying the weighted corporate financial metrics and individual performance goals, and such awards were paid out to our executive officers in the form of cash.
For additional retention purposes, we also granted long term incentive awards in 2025 as part of our long term incentive award program – see below for further discussion of our long-term incentive award program.
Compensation Overview
For 2025, there were three primary elements of total direct compensation: base salary, annual incentive compensation in the form of a cash bonus, and a long term incentive plan award.
Base Salary. Base salaries provide fixed compensation and allow us to attract and retain talented management. We set base salaries for our NEOs and review them periodically by taking into account the current market environment and the responsibilities, experience, value to the Company and demonstrated performance of our NEOs.
Annual Incentive Compensation. We grant an annual incentive compensation award in the form of a cash bonus based on the Company’s performance against corporate financial metrics and performance against individual performance goals.
Long-Term Incentive Plan. In 2021, we introduced a long term incentive (“LTI”) award program, in the form of long term cash awards, for our executive officers and certain other senior professionals. The LTI awards are intended to enhance management retention by rewarding participants for exceptional performance over a three-year performance period using the internal rate of return with respect to our common shareholders’ book equity (“Book Equity IRR”) as the measure of long-term performance. Each fiscal year within the three-year performance period constitutes a performance year. Our LTI awards are granted with a target award amount, whereby one-third of the target award relates to each performance year. The annual award earned in respect of a given performance year is adjusted based on the Book Equity IRR achieved for the given performance year. The Book Equity IRR for each performance year is evaluated against a performance range in order to determine the target annual award earned. The LTI awards yield a minimum payout of 50% and a maximum payout of 150% of the target annual award.
For maximum retention, our executive officers’ LTI awards cliff-vest at the end of the three-year performance period subject to continued employment through such date. Prior to her appointment as our Chief Legal Officer and Secretary effective March 1, 2025, Ms. Clarkin was granted non-executive officer LTI awards in 2024 and 2023 that vest annually on the last day of each performance year, subject to her continued employment through such date.







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Our LTI awards granted in 2025, 2024 and 2023 have the following performance ranges with results between the minimum and target and the maximum and target being interpolated on a linear basis.
Annual Performance Range for LTI Awards
Book Equity IRR
2025 LTI Awards2024 LTI Awards2023 LTI Awards% of Target Annual Award Earned
Equal to or greater than 7.3%Equal to or greater than 6.2%Equal to or greater than 5%150%
Greater than 4.8% and less than 7.3%Greater than 3.7% and less than 6.2%Greater than 2.5% and less than 5%Interpolated
Equal to 3.3% through 4.8%Equal to 2.2% through 3.7%Equal to 1.0% through 2.5%100%
Greater than 0.8% and less than 3.3%Greater than -0.3% and less than 2.2%Greater than -1.5% and less than 1.0%Interpolated
Less than or equal to 0.8%Less than or equal to -0.3%Less than or equal to -1.5%50%

Actual Performance for 2025 Performance Year. The Company’s financial performance in 2025 continued to reflect strong global passenger demand for air travel and sustained demand for our narrow-body aircraft, driven by ongoing OEM delivery delays and broader supply chain constraints. These market conditions supported elevated lease extension activity and strong gains on sales, which contributed positively to our operating results. Financial performance was also favorably impacted by additional cash settlement proceeds received in respect of our contingent and possessed insurance policies for aircraft formerly on lease to Russian airlines. As a result, the Book Equity IRR for the 2025 performance year was 8.2%, resulting in the portions of the 2025, 2024 and 2023 LTI awards attributable to the 2025 performance year being earned at 150%. For our executive officers other than Ms. Clarkin, the 2023 LTI Awards cliff-vested on February 28, 2026 and the 2024 LTI awards will cliff-vest on February 28, 2027. For all of our executive officers, the 2025 LTI awards will cliff-vest on February 28, 2028.
For our executive officers other than Ms. Clarkin, the 2023 LTI Awards that cliff-vested on February 28, 2026, were earned with respect to each performance year during the three-year performance period as follows:
2022 LTI Awards
Performance YearBook Equity IRR% of Target Annual Award Earned
Fiscal Year 20233.9%128%
Fiscal Year 20245.3%150%
Fiscal Year 20258.2%150%
For Ms. Clarkin, the portions of her 2023 and 2024 LTI Awards attributable to the 2025 performance year were earned at 150% and vested on February 28, 2026.
Other Compensation. Our NEOs are eligible to receive severance payments and accelerated vesting of LTI awards in certain circumstances, as described in greater detail below in the section entitled “Potential Payments upon Termination or Change in Control.” Severance and change in control benefits provide transitional assistance for separated employees and are essential to recruiting and retaining talented executives in a competitive market. In addition, our NEOs are also eligible to participate in our employee benefit plans, including medical, dental, life insurance and retirement plans. These plans are available to all employees and do not discriminate in favor of our NEOs.
Recoupment Policy. In January 2016, we adopted a clawback policy covering certain incentive compensation awarded to our executive officers. The policy requires reimbursement of incentive payments awarded to an executive officer based upon financial results that were subsequently the subject of a restatement due to the Company’s material noncompliance with financial reporting requirements. The amount of reimbursement would be to the extent that a lower payment would have been awarded to the executive based on the restated financial results. The policy applies to all incentive compensation awarded or paid to an executive officer in the three years prior to the restatement, even if the executive officer did not engage in conduct which contributed to the restatement. In addition, we may seek to recover any portion of incentive compensation when we determine that an executive officer engaged in a certain misconduct.
Retirement. For our executive officers, we have designed a qualifying retirement feature that will allow the LTI awards to continue to vest following retirement, subject to satisfaction of the Book Equity IRR performance objectives. For purposes of the LTI awards, a qualifying retirement means: (a) a retirement date no earlier than March 27, 2024; (b) the executive provides at least 12 months' notice; (c) the executive is at least 55 years old on the date of retirement and (d)
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such individual is not an executive officer (or serving in any other senior commercial role) with certain competitors prior to the vesting date of the applicable LTI award.
Summary. The primary goals of our compensation programs are to attract, motivate and retain the most talented and dedicated employees and to align incentive compensation with Company performance.
2025 Compensation
Performance versus Corporate Financial Metrics. For 2025, the Company’s performance against its corporate financial metrics resulted in an incentive compensation pool equal to 155% of the total target, as shown in the table below. Certain financial metrics, such as profit before tax, were impacted by the effects of the increased demand for our aircraft, strong gains on sales and settlement proceeds received in respect of our contingent and possessed insurance policies for aircraft formerly on lease to Russian airlines.
Metric2025
Target
(in millions)		Weighting2025 Performance (in millions)Performance RangePerformanceWeighted Score
Net income available to common shareholders (March 1, 2025 – February 28, 2026)$84.0 30%$173.0 50% - 200%138%60 %
Net income available to common shareholders (April 1, 2025 – March 31, 2026)$85.0 20%$144.0 50% - 200%150%40 %
Cash flow$454.0 25%$477.7 50% - 150%95%30 %
New investments$1,750.0 25%$1,719.0 50% - 150%150%25 %
Total155 %
Performance versus Individual Performance Goals. For 2025, each of our NEOs achieved individual performance results ranging from 110% to 130% of target.
The Compensation Committee took the following actions related to fiscal year 2025 annual incentive compensation for our NEOs, which was determined solely based on the achievement of the corporate financial metrics and individual performance goals:
Named Executive Officer2025 Incentive Compensation
Michael J. Inglese$1,116,863 cash
Roy Chandran$862,040 cash
Douglas C. Winter
$850,540 cash
Paul O’Callaghan
$734,280 cash
Sarah Clarkin$482,438 cash
How We Make Decisions
Risk. The Compensation Committee reviews the risks and rewards associated with the Company’s compensation programs. We believe that our compensation programs encourage prudent business judgment and appropriate risk-taking, with the overall goal of building sustainable and profitable growth.
We believe none of our compensation programs create risks that are reasonably likely to have a material adverse impact on the Company.
Role of Executive Officers. For 2025, the Compensation Committee set the corporate financial metrics at the beginning of the year based on the annual business plan endorsed by the Board. The Compensation Committee also set individual performance goals for the Chief Executive Officer, who in turn established individual performance goals for the other NEOs. Regularly during the year, the senior management team presented to us the Company’s actual performance against the corporate performance metrics. The Compensation Committee shared these discussions with the full Board on a regular basis.
Grant Policies and Practices. We do not currently grant equity-based awards. As such, we do not currently have any policies or practices in place with respect to the timing of equity-based awards in relation to the disclosure of material non-public information.
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COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board is currently comprised of three Directors and operates pursuant to a written charter, which is available at http://www.aircastle.com under “ESG.”

The Compensation Committee is primarily responsible for reviewing, approving and overseeing the Company’s compensation plans and practices and works with management to establish the Company’s executive compensation philosophy and programs.
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and based on that review and discussion, has recommended to the Board that it be included in this Form 10-K.

Respectfully submitted,
The Compensation Committee(1)

Charles W. Pollard, Chair
Michael J. Inglese




































_______________

(1) Yasuhiko Hashimoto was appointed to the Compensation Committee following the review and discussion described in this report.
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Summary Compensation Table for 2025
The table below sets forth information regarding fiscal years 2025, 2024 and 2023 compensation for each of our NEOs.
Awards
Name and Principal PositionFiscal YearSalary
Bonus(1)
Non-Equity Incentive Plan(2)
All Other Compensation(3)
Total
Michael J. Inglese2025$750,000 $1,116,863 $3,567,086 $19,743 $5,453,692 
Chief Executive Officer2024750,000 951,788 3,551,503 16,657 5,269,948 
2023750,000 939,660 2,298,667 15,540 4,003,867 
Roy Chandran2025$575,000 $862,040 $1,426,836 $19,743 $2,883,619 
Chief Financial Officer2024575,000 707,280 1,136,481 16,657 2,435,418 
2023575,000 639,026 551,680 15,540 1,781,246 
Douglas C. Winter2025$575,000 $850,540 $1,426,836 $19,743 $2,872,119 
Chief Commercial Officer2024575,000 715,280 1,420,603 16,657 2,727,540 
2023575,000 704,838 919,467 15,540 2,214,845 
Paul O’Callaghan(4)
2025$491,771 $734,280 $664,225 $63,651 $1,953,927 
Chief Operations Officer2024445,312 496,177 51,903 57,335 1,050,727 
2023450,025 372,838 96,160 54,003 973,026 
Sarah Clarkin(5)
2025$404,988 $482,438 $92,250 $53,244 $1,032,920 
Chief Legal Officer & Secretary
_______________
(1)Bonus compensation consists of: (i) cash bonuses, (ii) the portion of 2021 bonus restricted cash awards vested in 2023 and 2024.
(2)See Compensation Overview-Long Term Incentive Plan above for information regarding our cash-based LTI awards granted in 2025, 2024 and 2023. Pursuant to SEC rules, amounts paid out to our NEOs with respect to our cash-based LTI awards will be reported in the “Non-Equity Incentive Plan” column of the Summary Compensation Table for the year earned, not the year in which the LTI award was originally granted. Accordingly, the amounts reported represents (i) for 2025, the 2023 LTI awards granted to our NEOs (other than Ms. Clarkin), which vested on February 28, 2026 and (ii) for 2024 and 2023, the 2022 and 2021 LTI awards granted to our NEOs (other than Mr. O’Callaghan and Ms. Clarkin), which vested on February 28, 2025 and February 29, 2024, respectively. See footnotes (4) and (5) below for additional information regarding Mr. O’Callaghan’s and Ms. Clarkin’s cash-based LTI awards, respectively.
(3)The amounts reported in this column consist of Company contributions made to each named executive officer’s retirement plan account and certain insurance premiums paid by the Company.
(4)Paul O’Callaghan became one of the Company’s NEOs for 2023 as a result of his appointment and promotion to Chief Operations Officer effective March 1, 2023. The amount reported in the “Non-Equity Incentive Plan” column relates to non-executive, cash-based LTI awards granted to Mr. O’Callaghan in 2022 and 2021 prior to his appointment as Chief Operations Officer, which vested with respect to the 2024 and 2023 performance years on February 28, 2025 and February 29, 2024, respectively, and were paid out immediately upon vesting.
(5)Sarah Clarkin became one of the Company’s NEOs for 2025 as a result of her appointment and promotion to Chief Legal Officer and Secretary effective March 1, 2025. The amount reported in the “Non-Equity Incentive Plan” column relates to non-executive, cash-based LTI awards granted to Ms. Clarkin in 2024 and 2023 prior to her appointment as Chief Legal Officer and Secretary, which vested with respect to the 2025 performance year on February 28, 2026 and were paid out immediately upon vesting.
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Grants of Plan-Based Awards for 2025
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(2)(3)
NameGrant DateVesting Date
Grant of Cash LTI Award (1)
Minimum ($)Target ($)Maximum ($)
Michael J. IngleseApril 17, 2025February 28, 2028$2,500,000 $2,083,333 $2,916,667 $3,750,000 
Roy ChandranApril 17, 2025February 29, 2028$1,000,000 $833,333 $1,166,667 $1,500,000 
Douglas C. WinterApril 17, 2025February 29, 2028$1,000,000 $833,333 $1,166,667 $1,500,000 
Paul O’CallaghanApril 17, 2025February 29, 2028$602,198 $501,832 $702,564 $903,297 
Sarah ClarkinApril 17, 2025February 29, 2028$330,618 $275,515 $385,721 $495,928 
_______________
(1)Represents the aggregate target amount of our cash-based LTI awards granted to our NEOs in 2025.
(2)The LTI awards yield a minimum payout of 50% and a maximum payout of 150% of the target annual award. These amounts in the table reflect actual performance for the 2025 performance year (150%) and estimated minimum, target, and maximum amounts for the 2026 and 2027 performance years. See Compensation Overview – Long Term Incentive Plan above for information regarding our cash-based LTI awards.
(3)Pursuant to SEC rules, amounts paid out to our NEOs with respect to our cash-based LTI awards will be reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for the year earned, not the year granted. Accordingly, see the Summary Compensation Table for 2025 for the total amounts paid out to our NEOs with respect to the 2023 LTI awards granted to our NEOs (other than Ms. Clarkin), which vested on February 28, 2026. See footnotes (4) and (5) to the Summary Compensation Table for 2025 for additional information regarding the vesting and payment of Mr. O’Callaghan’s 2022 and 2021 LTI awards and Ms. Clarkin’s 2024 and 2023 LTI awards.
Employment Agreements with NEOs
Through our subsidiaries, Aircastle Advisor LLC (“AALLC”) and Aircastle (Ireland) Designated Activity Company (“AIDAC”), we have entered into an employment agreement (as amended) with each of our NEOs. These employment agreements generally provide for payment of an annual base salary and the executives’ eligibility to receive an performance-based incentives with indicated target annual cash bonus and LTI award levels.
Each employment agreement provides that the NEO is employed “at-will” and may be terminated at any time and for whatever reason by either us or him. A summary of the payments and benefits to be provided to the NEOs upon a termination of employment, along with a description of the restrictive covenants applicable to each NEO, is set forth below in the section entitled “Potential Payments upon Termination or Change in Control.”





56


POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following table and summary set forth potential amounts payable to our NEOs upon termination of employment or a change in control, as described below. The table below reflects amounts payable to our NEOs assuming termination of employment on February 28, 2026:
Name and Principal Position
Voluntary
resignation
by executive
Termination
by us for cause
Termination
by us without
cause
Termination by
us without cause
or by executive
for good reason
following
change in
control(1)
Termination by executive for good reason
Normal
retirement
Death or
disability
Michael J. Inglese
Cash Severance$— $— $1,500,000 $3,000,000 $1,500,000 $— $— 
Pro-rata Bonus (assumes
February 28 termination)		— — 750,000 750,000 750,000 — 750,000 
COBRA Reimbursement— — 59,208 59,208 59,208 — 59,208 
Vacation80,769 80,769 80,769 80,769 80,769 80,769 80,769 
Remainder of Restricted Cash
and LTI Awards(1)
— — 9,668,755 9,668,755 9,668,755 — 9,668,755 
Roy Chandran
Cash Severance$— $— $1,150,000 $2,300,000 $1,150,000 $— $— 
Pro-rata Bonus (assumes
February 28 termination)		— — 575,000 575,000 575,000 — 575,000 
COBRA Reimbursement— — 59,208 59,208 59,208 — 59,208 
Vacation61,923 61,923 61,923 61,923 61,923 61,923 61,923 
Remainder of Restricted Cash
and LTI Awards(1)
— — 3,867,505 3,867,505 3,867,505 — 3,867,505 
Douglas C. Winter
Cash Severance$— $— $1,150,000 $2,300,000 $1,150,000 $— $— 
Pro-rata Bonus (assumes
February 28 termination)		— — 575,000 575,000 575,000 — 575,000 
COBRA Reimbursement— — 45,696 45,696 45,696 — 45,696 
Vacation61,923 61,923 61,923 61,923 61,923 61,923 61,923 
Remainder of Restricted Cash
and LTI Awards(1)
— — 3,867,505 3,867,505 3,867,505 — 3,867,505 
Paul O’Callaghan
Cash Severance$— $— $1,003,663 $2,007,326 $1,003,663 $— $— 
Pro-rata Bonus (assumes
February 28 termination)		— — 501,832 501,832 501,832 — 501,832 
Health Insurance Benefits — — 5,064 5,064 5,064 — 5,064 
Vacation54,043 54,043 54,043 54,043 54,043 54,043 54,043 
Remainder of Restricted Cash
and LTI Awards(1)
— — 1,959,866 1,959,866 1,959,866 — 1,959,866 
Sarah Clarkin
Cash Severance$— $— $743,891 $1,487,783 $743,891 $— $— 
Pro-rata Bonus (assumes
February 28 termination)		— — 330,618 330,618 330,618 — 330,618 
Health Insurance Benefits— — 5,203 5,203 5,203 — 5,203 
Vacation44,506 44,506 44,506 44,506 44,506 44,506 44,506 
Remainder of Restricted Cash
and LTI Awards(1)
— — 508,721 508,721 508,721 — 508,721 
_______________
(1)Includes the 2023, 2024, and 2025 LTI awards (or for Ms. Clarkin, the applicable portion thereof) vesting on February 28, 2026, February 28, 2027, and February 29, 2028, respectively.
As described above in the section entitled “Employment Agreements with NEOs,” we, through our subsidiaries, AALLC and AIDAC, have entered into employment agreements (as amended) with our named executive officers which set forth certain terms and conditions of their employment relating to termination and termination payments.
57


Under the employment agreements for our named executive officers:
•if the employment of such named executive officer is terminated without “cause” or with “good reason” (as defined in such employment agreement), and if he or she signs a general release of claims and complies with the covenants described below, then he or she will be entitled to receive: (i) an amount equal to the sum of the base salary and target annual cash bonus for the year of termination, payable over a one-year period (two times such amount and payable in a lump sum if the termination occurs within 120 days prior to or within 2 years following a “change in control” as defined in such employment agreement); (ii) a pro-rata annual bonus for the year of termination; (iii) reimbursement of COBRA premiums or health insurance benefits for up to 12 months; (iv) accelerated vesting of any remaining cash-based LTI awards; and
•such named executive officer covenants not to compete with Aircastle for six months following termination of his or her employment for any reason and will not solicit the employees of Aircastle or the clients or customers of Aircastle for competing business, in each case, for a period of 12 months following termination.
Director Compensation Table for 2025
The table below describes our compensation of Directors for the fiscal year ended February 28, 2026:

NameFees Earned or Paid in Cash ($)Total ($)
Douglas A. Hacker$170,000 $170,000 
Charles W. Pollard170,000 170,000 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Certain Beneficial Owners and Management. The table below sets forth information as of April 14, 2026, as to the beneficial ownership of our Common Shares.
Name and Address of Beneficial OwnerCommon Shares HeldPercent of Class
Marubeni Corporation(1)
4-2 Ohtemachi 1-chome
Chiyoda-ku, Tokyo, 100-8088 Japan
8,920 50 %
MM Air Limited(2)
c/o Compass Administration Services Ltd.
Crawford House
50 Cedar Avenue
Hamilton, HM11, Bermuda
8,920 50 %
_______________
(1)Marubeni beneficially owns 8,920 Common Shares through its wholly owned subsidiary Marubeni Aviation Corporation.
(2)MM Air Limited beneficially owns 8,920 Common Shares. MM Air Limited is controlled by affiliates of our Shareholders.







58


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Party Transactions
The following is a summary of material provisions of certain transactions we entered into with our executive officers, Directors or 5% or greater shareholders. We believe the terms and conditions set forth in such agreements were reasonable and customary for transactions of this type.
See Note 10 in the Notes to Consolidated Financial Statements for additional information.
Policies and Procedures for Review, Approval or Ratification of Transactions with Related Persons
Our Board has adopted a Policy and Procedures with Respect to Related Person Transactions, our Related Person Policy. Pursuant to the terms of the Related Person Policy, the Audit Committee must review and approve in advance any transaction involving an affiliate or related party (as defined under Accounting Standards Codification Topic 850), in which the amount involved exceeds $5.0 million, other than those that are pre-approved pursuant to pre-approval guidelines or rules that may be established by the Audit Committee to cover specific categories of transactions, including the guidelines described below. All Related Persons, as defined below, are required to report to our legal department any such related person transaction prior to its completion, and the legal department will determine whether it should be submitted to the Audit Committee for consideration.
Our Related Person Policy covers all transactions, arrangements or relationships (or any series of similar transactions, arrangements or relationships) in which the Company or any of its subsidiaries was, is or will be a participant, in which the amount involved exceeds $120.0 thousand, and in which any Related Person had, has or will have a direct or indirect material interest.
A Related Person is any person who is, or at any time since the beginning of the Company’s last fiscal year was, a Director or executive officer of the Company or a nominee to become a Director of the Company; our Shareholders or their affiliates; any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Director, executive officer, nominee or our Shareholders or their affiliates, and any person (other than a tenant or employee) sharing the household of such Director, executive officer, nominee or our Shareholders or their affiliates.
Director Independence
Although our Common Shares are no longer listed on the NYSE or any other national securities exchange and we are therefore not required to have a majority of independent directors, the Board considers the current Directors Messrs. Hacker and Pollard to be independent and that Directors Messrs, Hashimoto, Hirose, Inglese, Irie and Ogasawara to be not independent. The Board also considers the current Chairman Mr. Ogasawara to be not independent. Our standing Risk and Governance, Audit and Compensation Committees include independent and non-independent Directors.
In addition, the Board considered transactions described above under “Item 13. Certain Relationships and Related Transactions, and Director Independence—Certain Relationships and Related Party Transactions” in making the independence determinations.








59


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees, Audit Related Fees, Tax Fees and All Other Fees. In connection with the audit of the fiscal year 2025 and 2024 financial statements, the Company entered into an engagement letter with Ernst & Young LLP (“EY”) that sets forth the terms by which EY has performed audit services for the Company. Professional services rendered by EY for the years ended February 28, 2026 and 2025 were as follows:
Year Ended February 28,
20262025
Audit fees(1)
$2,430,000 $2,514,000 
Tax fees(2)
1,082,000 1,004,300 
All other fees(3)
7,600 7,600 
_______________
(1)Represents fees for the audit of the Company’s consolidated financial statements, including the testing of internal control over financial reporting, the reviews of financial statements included in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, certain Current Reports on Form 8-K, audits of IBJ Air joint venture, consultations concerning financial accounting and reporting standards, statutory audits and services rendered relating to the Company’s registration statements.
(2)Represents fees related primarily to assistance with tax compliance matters, including international, federal and state tax return preparation, and consultations regarding tax matters.
(3)Represents fee for online research tool subscription.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has policies and procedures that require the pre-approval by the Audit Committee or one of its members of all services performed by the Company’s independent registered public accounting firm and related fee arrangements. In the early part of each year, the Audit Committee approves the proposed services, including the nature, type and scope of services contemplated, and the related fees, to be rendered by these firms during the year. In addition, pre-approval by the Audit Committee or one of its members is also required for those engagements that may arise during the course of the year that are outside the scope of the initial services and fees pre-approved by the Audit Committee pursuant to the Sarbanes-Oxley Act. In accordance with this policy, the Audit Committee pre-approved all services to be performed by the Company’s independent registered accounting firm.














60


PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A)1.Consolidated Financial Statements.
The following is a list of the “Consolidated Financial Statements” of Aircastle Limited and its subsidiaries included in this Annual Report on Form 10-K, which are filed herewith pursuant to Item 8:
Report of Independent Registered Public Accounting Firm.
Consolidated Balance Sheets as of February 28, 2026 and 2025.
Consolidated Statements of Income and Comprehensive Income for the years ended February 28/29, 2026, 2025 and 2024.
Consolidated Statements of Cash Flows for the years ended February 28/29, 2026, 2025 and 2024.
Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 28/29, 2026, 2025 and 2024.
Notes to Consolidated Financial Statements.
2.Financial Statement Schedules.
There are no Financial Statement Schedules filed as part of this Annual Report, since the required information is included in the Consolidated Financial Statements, including the notes thereto, or the circumstances requiring inclusion of such schedules are not present.
3.Exhibits.
The exhibits filed herewith are listed on the Exhibit Index filed as part of this Annual Report on Form 10-K.


























61


(B)   EXHIBIT INDEX
Exhibit No.Description of Exhibit
3.1
3.2
3.3
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
E - 1


Exhibit No.Description of Exhibit
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
10.1
10.2
10.3
10.4
10.5
10.6
E - 2


Exhibit No.Description of Exhibit
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
E - 3


Exhibit No.Description of Exhibit
10.24
10.25
10.26
10.27
10.28
10.29
10.30
10.31
10.32
10.33
10.34
10.35
10.36
10.37
10.38
10.39
10.40
E - 4


Exhibit No.Description of Exhibit
10.41
10.42
10.43
10.44
21.1
31.1
31.2
32.1
32.2
101
The following materials from the Company’s Annual Report on Form 10-K for the year ended February 28, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of February 28, 2026 and 2025; (ii) Consolidated Statements of Income and Comprehensive Income for the years ended February 28/29, 2026, 2025, and 2024; (iii) Consolidated Statements of Cash Flows for the years ended February 28/29, 2026, 2025, and 2024; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 28/29, 2026, 2025, and 2024; and (v) Notes to Consolidated Financial Statements*
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
_____________
#    Management contract or compensatory plan or arrangement.
*    Filed herewith.
**    Certain attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
Ø    Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
^    Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules to the SEC upon request.
ØØ    Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
ITEM 16. FORM 10-K SUMMARY
None.
E - 5


Index to Financial Statements

 Page No.
Consolidated Financial Statements
F - 2
Consolidated Balance Sheets as of February 28, 2026 and 2025
F - 4
Consolidated Statements of Income and Comprehensive Income for the years ended February 28/29, 2026, 2025 and 2024
F - 5
Consolidated Statements of Cash Flows for the years ended February 28/29, 2026, 2025 and 2024
F - 6
Consolidated Statements of Changes in Shareholders’ Equity for the years ended February 28/29, 2026, 2025 and 2024
F - 7
Notes to Consolidated Financial Statements
F - 8

F - 1


Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Aircastle Limited and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Aircastle Limited and subsidiaries (the Company) as of February 28, 2026 and 2025, the related consolidated statements of income and comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended February 28, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at February 28, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended February 28, 2026, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.













F - 2


Accounting for Income Tax
Description of the Matter
The Company is incorporated in Bermuda and leases its aircraft within over 40 countries. The Company’s income is subject to U.S. federal, state and local income taxes, as well as foreign income tax in many of the jurisdictions it leases aircraft. As more fully described in Note 11 to the consolidated financial statements, the Company recognized a consolidated provision for income taxes of $29 million for the year ended February 28, 2026.
Auditing the Company’s income tax accounting was especially challenging due to the international tax structure maintained by the Company. Specifically, the auditing of certain transactions to buy aircraft in foreign jurisdictions required increased auditor effort, including the use of tax professionals with specialized skills, to evaluate the Company’s application of the tax laws in the relevant jurisdictions and the related income tax.
How We Addressed the Matter in Our Audit
To test the Company’s application of tax laws in the relevant jurisdictions and the related income tax, we performed audit procedures that included, among others, obtaining, and assessing the completeness of, a list of transactions to purchase aircraft during the period and evaluating the tax treatment of certain transactions through review of the lease documents and our assessment of the tax law. Our audit procedures were performed with the assistance of our tax professionals with specialized skills and knowledge.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2004.
Stamford, CT
April 21, 2026
F - 3


Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)

 February 28,
 20262025
ASSETS
Cash and cash equivalents$179,889 $279,052 
Accounts receivable18,239 9,662 
Flight equipment held for lease, net8,267,353 7,644,867 
Net investment in leases, net267,085 257,249 
Unconsolidated equity method investment47,540 45,813 
Other assets209,680 273,521 
Total assets$8,989,786 $8,510,164 
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Borrowings from secured financings, net$112,355 $502,609 
Borrowings from unsecured financings, net5,139,411 4,452,781 
Accounts payable, accrued expenses and other liabilities381,274 295,132 
Lease rentals received in advance63,514 68,120 
Security deposits65,424 82,477 
Maintenance payments560,157 583,658 
Total liabilities6,322,135 5,984,777 
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 February 28, 2026 and 2025
— — 
Common shares, $0.01 par value, 250,000,000 shares authorized, 17,840 shares issued and outstanding at February 28, 2026 and 2025
— — 
Additional paid-in capital2,378,774 2,378,774 
Retained earnings288,877 146,613 
Total shareholders’ equity2,667,651 2,525,387 
Total liabilities and shareholders’ equity$8,989,786 $8,510,164 







The accompanying notes are an integral part of these consolidated financial statements.
F - 4


Aircastle Limited and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(Dollars in thousands, except per share amounts)

 Year Ended February 28/29,
 202620252024
Revenues:
Lease rental revenue$759,701 $652,379 $603,571 
Direct financing and sales-type lease revenue20,945 21,295 16,503 
Amortization of lease premiums, discounts and incentives280 (21,682)(20,420)
Maintenance revenue95,654 90,490 132,179 
Total lease revenue876,580 742,482 731,833 
Gain on sale or disposition of flight equipment95,889 77,191 121,646 
Other revenue2,650 1,302 1,937 
Total revenues975,119 820,975 855,416 
Operating expenses:
Depreciation384,028 355,666 348,229 
Interest, net282,139 247,923 229,050 
Selling, general and administrative89,483 86,416 82,127 
Provision (benefit) for credit losses(57)8,715 12,081 
Impairment of flight equipment53,323 19,391 55,240 
Maintenance and other costs17,101 16,938 29,884 
Total operating expenses826,017 735,049 756,611 
Other income (expense):
Gain (loss) on extinguishment of debt(2,973)285 — 
Other74,120 56,247 5,571 
Total other income71,147 56,532 5,571 
Income from continuing operations before income taxes and earnings of unconsolidated equity method investment220,249 142,458 104,376 
Income tax provision28,863 21,948 23,265 
Earnings of unconsolidated equity method investment, net of tax2,662 3,103 2,205 
Net income$194,048 $123,613 $83,316 
Preference share dividends(21,000)(21,000)(21,000)
Net income available to common shareholders$173,048 $102,613 $62,316 
Total comprehensive income available to common shareholders$173,048 $102,613 $62,316 



The accompanying notes are an integral part of these consolidated financial statements.
F - 5


Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
 Year Ended February 28/29,
 202620252024
Cash flows from operating activities:
Net income$194,048 $123,613 $83,316 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation384,028 355,666 348,229 
Amortization of deferred financing costs18,032 17,033 17,090 
Amortization of lease premiums, discounts and incentives(280)21,682 20,420 
Deferred income taxes21,193 17,550 20,053 
Collections on net investments in leases5,352 7,628 3,557 
Security deposits, maintenance payments and insurance settlements included in earnings(119,410)(59,959)(54,373)
Gain on sale or disposition of flight equipment(95,889)(77,191)(121,646)
Loss (gain) on extinguishment of debt2,973 (285)— 
Impairment of aircraft53,323 19,391 55,240 
Provision (benefit) for credit losses(57)8,715 12,081 
Other(1,822)(3,188)(2,512)
Changes on certain assets and liabilities:
Accounts receivable(8,207)(6,984)(443)
Other assets7,950 13,532 (9,317)
Accounts payable, accrued expenses and other liabilities25,462 7,475 (15,907)
Lease rentals received in advance(3,643)19,343 14,466 
Net cash and cash equivalents provided by operating activities483,053 464,021 370,254 
Cash flows from investing activities:
Acquisition and improvement of flight equipment(1,710,760)(1,588,197)(1,240,183)
Proceeds from sale or disposition of flight equipment729,500 565,921 361,826 
Proceeds from settlement of insurance claims70,824 49,500 — 
Proceeds from sale of investment in debt securities10,128 — — 
Aircraft purchase deposits and progress payments, net of returned deposits and aircraft sales deposits2,713 4,157 5,650 
Other9 (1,613)(6,408)
Net cash and cash equivalents used in investing activities(897,586)(970,232)(879,115)
Cash flows from financing activities:
Proceeds from issuance of common shares— 300,000 200,000 
Proceeds from secured and unsecured debt financings1,915,489 1,702,048 2,029,750 
Repayments of secured and unsecured debt financings(1,624,927)(1,452,340)(1,917,744)
Deferred financing costs(15,190)(9,849)(25,035)
Debt extinguishment costs— 285 — 
Security deposits and maintenance payments received153,390 152,521 159,792 
Security deposits and maintenance payments returned(50,608)(16,379)(18,786)
Dividends paid(62,784)(21,000)(21,000)
Net cash and cash equivalents provided by financing activities315,370 655,286 406,977 
Net (decrease) increase in cash and cash equivalents(99,163)149,075 (101,884)
Cash and cash equivalents at beginning of year279,052 129,977 231,861 
Cash and cash equivalents at end of year$179,889 $279,052 $129,977 







Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
(Dollars in thousands)

 Year Ended February 28/29,
 202620252024
Supplemental disclosures of cash flow information:
Cash paid during the year for interest$247,603 $233,284 $240,715 
Cash paid during the year for income taxes$1,357 $4,170 $5,135 
Supplemental disclosures of non-cash investing activities:
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets settled in sale of flight equipment$119,301 $113,641 $55,046 
Advance lease rentals, security deposits, maintenance payments, other liabilities and other assets assumed in asset acquisitions$96,905 $77,976 $28,350 
Transfers from Flight equipment held for lease, net to Net investment in leases, net and Other assets$68,244 $54,151 $220,648 




The accompanying notes are an integral part of these consolidated financial statements.
F - 6


Aircastle Limited and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
(Dollars in thousands, except share amounts)

 Common SharesPreference SharesAdditional
Paid-In
Capital		Retained
Earnings
(Accumulated
Deficit)		Total
Shareholders’
Equity
 SharesAmountSharesAmount
Balance, February 28, 202314,048 $— 400 $— $1,878,774 $(7,316)$1,871,458 
Issuance of common shares1,516 — — — 200,000 — 200,000 
Preference share dividends— — — — — (21,000)(21,000)
Net income— — — — — 83,316 83,316 
Balance, February 29, 2024
15,564 $— 400 $— $2,078,774 $55,000 $2,133,774 
Issuance of common shares2,276 — — — 300,000 — 300,000 
Preference share dividends— — — — — (21,000)(21,000)
Common share dividends— — — — — (11,000)(11,000)
Net income— — — — — 123,613 123,613 
Balance, February 28, 2025
17,840 $— 400 $— $2,378,774 $146,613 $2,525,387 
Preference share dividends— — — — — (21,000)(21,000)
Common share dividends— — — — — (30,784)(30,784)
Net income— — — — — 194,048 194,048 
Balance, February 28, 2026
17,840 $— 400 $— $2,378,774 $288,877 $2,667,651 
The accompanying notes are an integral part of these consolidated financial statements.
F - 7

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)


Note 1. Summary of Significant Accounting Policies
Organization
Aircastle Limited (“Aircastle,” the “Company,” “we,” “us” or “our”) is a Bermuda 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 is 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” and, together with Marubeni, our “Shareholders”).
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”) and 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.
The Company’s management has reviewed and evaluated all events or transactions for potential recognition and/or disclosure subsequent to the balance sheet date of February 28, 2026, through the date on which the consolidated financial statements included in this Annual Report were issued.
Segment Reporting
We manage and analyze our business and report our results of operations based on one operating and reportable segment: leasing, financing, selling and managing commercial flight equipment. Our Chief Executive Officer is the chief operating decision maker (the “CODM”). As a single reportable segment entity, the CODM utilizes consolidated net income to evaluate segment performance and allocate resources. The significant segment expenses and other segment items, including total assets, that are provided to the CODM are consistent with the information presented in the Company’s consolidated balance sheets and statements of income.
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 negatively affect 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.
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.

F - 8

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Cash and Cash Equivalents
Aircastle considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.
Virtually all our cash and cash equivalents are held or managed by five major financial institutions.
Flight Equipment Held for Lease and Depreciation
Flight equipment held for lease is stated at cost and depreciated using the straight-line method, typically over a 25-year life from the date of manufacture for passenger aircraft and over a 30 to 35-year life for freighter aircraft, depending on whether the aircraft is a converted or purpose-built freighter, to estimated residual values. Estimated residual values are generally determined to be 15% of the manufacturer’s estimated realized price for passenger aircraft when new and 5% to 10% for freighter aircraft when new. Management may make exceptions to this policy on a case-by-case basis when, in its judgment, the residual value calculated pursuant to this policy does not appear to reflect current expectations of value. Examples of circumstances in which such exceptions may arise include but are not limited to:
•flight equipment where estimates of the manufacturer’s realized sales prices are not relevant (e.g., freighter conversions);
•flight equipment where estimates of the manufacturer’s realized sales prices are not readily available; and
•flight equipment which may have a shorter useful life due to obsolescence.
Major improvements and modifications incurred in connection with the acquisition of aircraft that are required to place the aircraft into initial service are capitalized and depreciated over the remaining life of the flight equipment.
For planned major maintenance activities for aircraft that are off lease, the Company capitalizes the actual maintenance costs by applying the deferral method. Under the deferral method, we capitalize the actual cost of major maintenance events, which are typically depreciated on a straight-line basis over the period until the next maintenance event is required.
In accounting for flight equipment held for lease, we make estimates about the expected useful lives, the fair value of attached leases, acquired maintenance assets or liabilities and the estimated residual values. In making these estimates, we rely upon actual industry experience with the same or similar aircraft types and our anticipated lessee’s utilization of the aircraft.
For purchase lease-back transactions, we account for the transaction as a single arrangement. We allocate the consideration paid based on the fair value of the aircraft and lease. The fair value of the lease may include a maintenance premium and a lease premium or discount.
When we acquire an aircraft with a lease attached, determining the fair value of the lease requires us to make assumptions regarding the current fair values of leases for comparable aircraft. We estimate a range of current lease rates for similar aircraft to assess whether the attached lease is within a fair value range. If the contractual lease rate is below or above the estimated market range, the Company records a lease discount or premium equal to the present value the estimated amount below or above the fair value range over the remaining term of the lease. Any such lease discount or premium is amortized into lease revenue on a straight-line basis over the remaining lease term.
Flight Equipment Held for Sale
Flight equipment is classified as held for sale when management commits to a plan to sell, the asset is available for immediate sale in its present condition, and the sale is probable and expected to be completed within one year based on management’s evaluation of all relevant facts and circumstances. Upon classification as held for sale, flight equipment is measured at the lower of its carrying amount or fair value less costs to sell, depreciation is ceased, and the asset is presented separately within other assets on the consolidated balance sheet.

F - 9

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Impairment of Flight Equipment
We perform recoverability assessments of all our aircraft and other flight equipment at least annually, and more frequently when events or changes in circumstances indicate that the carrying amount or net book value of an asset may not be recoverable. We perform aircraft-specific recoverability tests when such indicators exist. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. We focus on aircraft with near-term lease expirations, customers that have entered judicial insolvency proceedings and any additional customers that may become subject to similar-type proceedings, and certain other customers or aircraft variants that are more susceptible to value deterioration.
For assets with indicators of impairment, we assess whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value. These undiscounted cash flows include 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. If an aircraft does not meet the recoverability test, the aircraft will be written down to its estimated fair value, resulting in an impairment charge.
Our estimates and assumptions are based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third party industry sources. The factors considered in estimating the undiscounted cash flows are subject to change in future periods and may be affected by changes in projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors, such as the location of the aircraft and accessibility to records and technical documentation.
If our estimates or assumptions change, 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.
Net Investment in Leases
If a lease meets specific criteria at lease commencement or at the effective date of a lease modification, we classify the lease as a direct financing or sales-type lease. The net investment in direct financing and sales-type leases consists of the lease receivable, the estimated unguaranteed residual value of the leased flight equipment at lease-end and, for direct financing leases, deferred selling profit. For sales-type leases, we recognize the difference between the net book value of the aircraft and the net investment in the lease as a gain or loss on sale of flight equipment. Selling profit on a direct financing lease is deferred and amortized over the lease term, and a selling loss is recognized at lease commencement. Interest income on our net investment in leases is recognized as direct financing and sales-type leases revenue over the lease term in a manner that produces a constant rate of return on the net investment in the lease.
The net investment in leases is recorded net of an allowance for credit losses. The allowance for credit losses is recorded upon the initial recognition of the net investment in the lease based on the Company’s estimate of expected credit losses over the lease term. The allowance reflects the Company’s estimate of lessee default probabilities and loss given default percentages. When determining the credit loss allowance, we consider relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the net investment in the lease. The allowance also considers potential losses due to non-credit risk related to unguaranteed residual values. A provision for credit losses is recorded as a component of operating expenses to adjust the allowance for changes to management’s estimate of expected credit losses.
Unconsolidated Equity Method Investment
We have an unconsolidated equity method investment in an aircraft leasing entity that is accounted for using the equity method as we do not exercise control over the entity. Under the equity method, the investment is initially recorded at cost and the carrying amount subsequently adjusted for our share of the unconsolidated equity method investment’s undistributed earnings and losses and distributions of dividends and capital. The investment is reviewed for impairment
F - 10

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary.
Security Deposits
Most of our operating leases require the lessee to pay Aircastle a security deposit or provide a letter of credit. Security deposits represent cash received from the lessee that is held on deposit until lease expiration or termination. If a lease is terminated, we recognize security deposits in excess of outstanding lease payments as other revenue.
Maintenance Payments
In general, the lessee is responsible for performing maintenance on the aircraft and is required to make payments for heavy maintenance, overhaul or replacement of certain high-value components. These maintenance payments are typically calculated based on hours or cycles of utilization or on calendar time, depending upon the applicable component, and are made either monthly in arrears or at the end of the lease term. Our determination of whether to require such payments to be made monthly or to permit a lessee to make a single maintenance payment at the end of the lease term depends on a variety of factors, including the creditworthiness of the lessee, the amount of security deposit provided by the lessee and market conditions at the time we enter into the lease. Where a lessee makes monthly maintenance payments, we are generally obligated to use such funds to reimburse the lessee for costs they incur for eligible heavy maintenance, overhaul or replacement of certain high-value components during the lease term, typically following completion of the relevant work. Where a lessee makes a single end of lease maintenance payment, the lessee would be required to compensate us for its utilization of the aircraft during the lease. In some cases, however, we may owe a net payment to the lessee if heavy maintenance is performed and paid for by the lessee during the lease term and the aircraft is returned to us in better condition than at lease inception.
We record monthly maintenance payments by the lessee as accrued maintenance payments liabilities in recognition of our obligation in the lease to refund such receipts, and therefore we typically do not recognize such maintenance payments as maintenance revenue during the lease. Reimbursements to the lessee upon the receipt of evidence of qualifying maintenance work are charged against the existing accrued maintenance payments liability. We currently defer maintenance revenue recognition of most monthly maintenance payments until we are able to determine the amount, if any, by which the monthly maintenance payments received from a lessee exceed costs to be incurred by that lessee in performing heavy maintenance, which generally occurs at or near the end of the lease. End of lease term maintenance payments made to us are recognized as maintenance revenue, and end of lease term maintenance payments we make to a lessee are recorded as contra maintenance revenue.
Lease Incentives and Amortization
Many of our leases contain provisions that may require us to pay a portion of the lessee’s costs for heavy maintenance, overhaul or replacement of certain high-value components. We account for these expected payments as lease incentives, which are amortized on a straight-line basis as a reduction of revenue over the lease term. We estimate the amount of our portion for such costs, typically for the first major maintenance event for the airframe, engines, landing gear and auxiliary power units, expected to be paid to the lessee. These estimates are based on assumed utilization of the related aircraft by the lessee, the anticipated amount of the maintenance event cost and the estimated amounts the lessee is responsible to pay. The assumptions supporting these estimates are reevaluated annually.
This estimated lease incentive is not recognized as a lease incentive liability at the inception of the lease. We recognize the lease incentive as a reduction of lease revenue on a straight-line basis over the lease term, with the offset being recorded as a lease incentive liability which is included in maintenance payments on the balance sheet. The payment to the lessee for the lease incentive liability is first recorded against the lease incentive liability, and any excess above the lease incentive liability is recorded as a prepaid lease incentive asset, which is included in other assets on the balance sheet and continues to amortize over the remaining lease term.
Lease acquisition costs related to reconfiguration of the aircraft cabin, other lessee specific modifications and other direct costs are capitalized and amortized into revenue over the initial lease term, assuming no lease renewals, and are included in other assets.
F - 11

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Income Taxes
The Company records an income tax provision in accordance with the various tax laws for those jurisdictions within which our transactions occur. Aircastle uses an asset and liability based approach in accounting for income taxes. Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount estimated by us to be realizable. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. We did not have any unrecognized tax benefits.
Fair Value Measurements
Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We measure the fair value of our cash and cash equivalents and certain of our investments in debt and equity securities on a recurring basis and measure the fair value of our aircraft and investment in unconsolidated joint venture on a non-recurring basis. See Note 2.
Lease Revenue Recognition
We lease flight equipment under net operating leases with lease terms typically ranging from 3 to 7 years. We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term. Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals.
In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals. While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease term is generally the same as that which was required under the original lease agreement. We account for the deferrals as if no modifications to the lease agreements were made and record the deferred rentals as a receivable within other assets.
Should we determine that the collectability of rental payments is no longer probable, including any deferral thereof, we will recognize lease rental revenue using a cash basis of accounting rather than an accrual method. In the period we conclude that collection of lease payments is no longer probable, we recognize any difference between revenue amounts recognized to date under the accrual method and payments that have been collected from the lessee, including security deposit amounts held, as a current period adjustment to lease rental revenue.
Comprehensive Income
Comprehensive income consists of net income and other gains and losses, net of income taxes, if any, affecting shareholders’ equity that, under U.S. GAAP, are excluded from net income.
Deferred Financing Costs
Deferred financing costs, which are included in borrowings from secured and unsecured financings, net, are amortized using the interest method for amortizing loans over the lives of the relevant related debt.
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the transparency of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The standard requires disclosure of specific categories in the rate reconciliation, using both percentages and reporting currency amounts, as well as disclosure of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and individual jurisdictions. The standard is effective for annual periods beginning after
F - 12

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

December 15, 2024 and is applied on a prospective basis. The Company adopted ASU 2023-09 effective for the year ended February 28, 2026, and the additional disclosures required by the standard are included in Note 11. The adoption of ASU 2023-09 did not have a material impact on the consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires entities to provide additional disclosure around certain costs and expenses presented within the Income Statement. This standard aims to improve the disclosures around the entity’s expenses and address requests from investors for more detailed information about the types of expenses. The standard is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies the scope and requirements for interim financial statement disclosures under U.S. GAAP. The amendments create a comprehensive list of required interim disclosures and introduce a disclosure principle requiring entities to disclose, in interim periods, any event or change since the previous year-end that has a material effect on the entity. ASU 2025-11 is effective for interim reporting periods within annual periods beginning after December 15, 2027, for public business entities, and after December 15, 2028, for all other entities. Early adoption is permitted. The amendments may be applied prospectively or retrospectively to any or all prior interim periods presented. The Company is currently evaluating the impact of ASU 2025-11 on its consolidated financial statements.
Note 2. Fair Value Measurements
Fair value measurements and disclosures require the use of valuation techniques to measure fair value that maximize the use of observable inputs and minimize use of unobservable inputs. These inputs are prioritized as follows:
•Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
•Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs.
•Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the asset or liability.
The valuation techniques that may be used to measure fair value are as follows:
•The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
•The income approach uses valuation techniques to convert future amounts to a single present amount based on current market expectation about those future amounts.
•The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).







F - 13

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Assets Measured at Fair Value on a Recurring Basis
The following tables set forth our financial assets as of February 28, 2026 and 2025, 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
as of
February 28, 2026
Fair Value Measurements at February 28, 2026
Using Fair Value Hierarchy
 Level 1Level 2Level 3Valuation
Technique
Assets:
Cash and cash equivalents$179,889 $179,889 $— $— Market
Investments, at fair value
Investment in equity securities$5,704 $1,806 $— $3,898 Market/Income
Total investments, at fair value$5,704 $1,806 $— $3,898 
 
Fair Value
as of
February 28, 2025
Fair Value Measurements at February 28, 2025
Using Fair Value Hierarchy
 Level 1Level 2Level 3Valuation
Technique
Assets:
Cash and cash equivalents$279,052 $279,052 $— $— Market
Investments, at fair value
Investment in debt securities$5,029 $— $— $5,029 Income
Investment in equity securities4,883 985 — 3,898 Market/Income
Total investments, at fair value$9,912 $985 $— $8,927 
Our cash and cash equivalents consist largely of money market securities that are highly liquid and easily tradable. These securities are valued using inputs observable in active markets for identical securities (Level 1). Our investments in debt and equity securities consist of notes and shares received as a result of claims settlements from various airline customers that had entered into bankruptcy proceedings or similar-type restructurings. Our investment in equity securities that are traded in an active market have been valued using quoted market prices (Level 1). Our investments in other equity securities and debt securities for which there is no active market or there is limited market data have been valued using the income approach (Level 3).
During the year ended February 28, 2026, we sold certain notes received from our airline customers and, as a result, held no investments in debt securities that were measured at fair value as of February 28, 2026.
For the years ended February 28, 2026 and 2025, we had no transfers into or out of Level 3.
Assets Measured at Fair Value on a Non-recurring Basis
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 when events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. Assets subject to these measurements include our aircraft and unconsolidated equity method investment.
We record aircraft at fair value when we determine the carrying value may not be recoverable. Fair value measurements for aircraft in impairment tests are based on the market approach (Level 2 or 3), which incorporates third-party appraisal data, and an income approach (Level 3), which reflects the Company’s assumptions and appraisal data regarding the present value of future cash proceeds from leasing and selling aircraft. Level 3 valuations contain significant unobservable inputs. See “Aircraft Valuation” below for further information.
F - 14

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

We account for our unconsolidated equity method investment under the equity method of accounting. Our investment is recorded at cost and is adjusted by undistributed earnings and losses and the distributions of dividends and capital. This investment is reviewed for impairment whenever events or changes in circumstances indicate the fair value is less than its carrying value and the decline is other-than-temporary.
Financial Instruments
Our financial instruments, other than cash, consist principally of cash equivalents, accounts receivable, investments in debt and equity securities, accounts payable and secured and unsecured financings. The fair value of cash and cash equivalents, accounts receivable and accounts payable approximates the carrying value of these financial instruments because of their short-term nature.
The fair value of our investments, which consist of debt and equity securities, is determined using quoted market prices for those securities that are traded in an active markets (Level 1), or using the income approach for those securities which there is no active market or where market data is limited (Level 3). The fair value of our senior notes is estimated using quoted market prices (Level 1). The fair value of all other secured and unsecured financings is estimated using a discounted cash flow analysis based on our current incremental borrowing rates for similar types of borrowing arrangements (Level 2).
The carrying amounts and fair values of our financial instruments at February 28, 2026 and 2025, were as follows:
February 28,
20262025
AssetsCarrying Amount
of Asset		Fair Value
of Asset		Carrying Amount
of Asset		Fair Value
of Asset
Investments, at fair value(1)
$5,704 $5,704 $9,912 $9,912 
Other investments, net728 728 4,916 4,916 
LiabilitiesCarrying Amount
of Liability		Fair Value
of Liability		Carrying Amount
of Liability		Fair Value
of Liability
Credit Facilities$240,000 $240,000 $150,000 $150,000 
Unsecured Term Loan600,000 604,385 — — 
Other Financings114,177 107,299 509,104 513,161 
Senior Notes4,350,000 4,452,826 4,350,000 4,387,341 
_______________
(1)See Assets Measured at Fair Value on a Recurring Basis.

Aircraft Valuation
Impairment of Flight Equipment
During the year ended February 28, 2026, the Company recorded total impairment charges of $53.3 million. This amount includes $35.9 million related to aircraft leased to 2 customers that filed for bankruptcy protection. For these aircraft, the Company recognized $11.5 million of maintenance and lease rentals received in advance into revenue during the same period.
The remaining $17.4 million of impairment charges were primarily transaction-related, including aircraft and engine redeliveries, and also related to other flight equipment recorded within other assets that is subject to tear-down and parts sales programs. For these items, the Company recognized $25.0 million of revenue related to maintenance, security deposits and the reversal of lease incentive liabilities during the year ended February 28, 2026.
During the year ended February 28, 2025, the Company recorded impairment charges totaling $19.4 million, including $11.0 million of transactional impairments related to a scheduled lease expiration and an aircraft lease
F - 15

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

amendment. The Company recognized $24.0 million of maintenance revenue for these aircraft during the year ended February 28, 2025. Total impairment charges also included $8.4 million related to flight equipment that was recorded as a component of other assets and subject to tear-down and parts sales programs.
Recoverability Assessment
We perform recoverability assessments of all our aircraft and other flight equipment at least annually, and more frequently when events or changes in circumstances indicate the carrying amount or net book value of an aircraft or other flight equipment may not be recoverable. We completed our annual recoverability assessment during the third quarter of fiscal year 2025.
For assets with indicators of impairment, we assess whether the estimated future undiscounted net cash flows expected to be generated by the asset exceed its net book value. These undiscounted cash flows include cash flows from currently contracted lease rentals and maintenance payments, future projected lease rates and maintenance payments, transition costs, estimated down time, and estimated residual or scrap values for an aircraft. If an aircraft does not meet the recoverability test, the aircraft will be written down to its estimated fair value, resulting in an impairment charge.
Our estimates and assumptions are based on current and future expectations of the global demand for a particular aircraft type and historical experience in the aircraft leasing market and aviation industry, as well as information received from third-party industry sources. The factors considered in estimating the undiscounted cash flows are subject to change in future periods and may be affected by changes in projected lease rental and maintenance payments, residual values, economic conditions, technology, airline demand for a particular aircraft type and other factors, such as the location of the aircraft and accessibility to records and technical documentation.
If our estimates or assumptions change, including those related to our customers that have entered judicial insolvency proceedings or similar-type proceedings or restructurings, we may revise our cash flow assumptions and record future impairment charges. While we believe that the estimates and related assumptions used in our recoverability assessments are appropriate, actual results could differ from those estimates.
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 years ended February 28, 2026 and 2025:
February 28,
20262025
Beginning balance
$7,644,867 $6,940,502 
Additions1,773,528 1,670,063 
Depreciation(381,616)(353,395)
Disposals and transfers to net investment in leases and held for sale(720,064)(601,331)
Impairments(49,362)(10,972)
Ending balance
$8,267,353 $7,644,867 
Accumulated depreciation$1,870,494 $2,163,084 
Russian Aircraft Insurance Settlements
The Company leased 9 aircraft to Russian airlines that were unrecoverable following Russia’s invasion of Ukraine in February 2022. The Company filed claims against the reinsurers of the Russian airlines’ insurance, as well as under the Company’s contingent and possessed insurance policies (“C&P Policies”), seeking indemnification.
During the years ended February 28, 2025 and February 29, 2024, the Company received insurance settlement proceeds of $49.5 million and $43.2 million, respectively. For the year ended February 28, 2025, the proceeds were recorded in other income and related to settlements under certain of the Company’s C&P Policies. For the year ended
F - 16

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

February 29, 2024, the proceeds were recorded within gain on sale or disposition of flight equipment and related to 4 aircraft formerly on lease to Joint Stock Company Aurora Airlines and Joint Stock Company Rossiya Airlines, resulting in the transfer of aircraft title to a Russian insurer.
In addition, during the year ended February 28, 2026, the Company recognized other income of $70.8 million related to settlement agreements with certain additional insurers under its C&P Policies.
The receipt of the insurance proceeds serves to mitigate, in part, the Company’s losses under its aviation insurance policies. The Company continues to pursue recoveries from the remaining insurers; however, the timing and amount of any additional recoveries, including those related to insurance litigation, remain uncertain. Accordingly, at this time, the Company can give no assurance as to when or what amounts it may ultimately collect with respect to these matters.
Note 4. Lease Rental Revenues
Minimum future lease rentals contracted to be received under our existing operating leases of flight equipment at February 28, 2026 were as follows:
Year Ended February 28/29,
Amount(1)
2027$731,483 
2028660,147 
2029583,403 
2030475,153 
2031391,214 
Thereafter992,058 
Total$3,833,458 
_______________
(1)Reflects impact of lessee lease rental deferrals.
At February 28, 2026 and 2025, the amounts of lease incentive liabilities recorded in maintenance payments on our consolidated balance sheets were $23.5 million and $34.8 million, respectively.
Note 5. Net Investment in Leases, Net
At February 28, 2026 and 2025, our net investment in leases consisted of 14 aircraft. During the year ended February 28, 2026, we sold 1 aircraft and acquired 1 aircraft, each of which were subject to sales-type leases.
The components of our net investment in leases at February 28, 2026 and 2025 were as follows:
February 28,
20262025
Lease receivable$119,712 $121,202 
Unguaranteed residual value of flight equipment153,472 142,849 
Net investment in leases273,184 264,051 
Allowance for credit losses(6,099)(6,802)
Net investment in leases, net$267,085 $257,249 






F - 17

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

As of February 28, 2026, future lease payments on net investment in leases were as follows:
Year Ending February 28/29,Amount
2027$26,751 
202827,167 
202926,690 
203020,489 
203122,797 
Thereafter28,650 
Total lease payments to be received152,544 
Present value of lease payments – lease receivable(119,712)
Difference between undiscounted lease payments and lease receivable$32,832 
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 February 28, 2026 and 2025 was as follows:
February 28,
 20262025
RegionNumber of
Aircraft		Net Book
Value %		Number of
Aircraft		Net Book
Value %
Asia and Pacific70 27 %67 28 %
Europe79 23 %99 30 %
Middle East and Africa14 5 %11 5 %
North America72 30 %58 26 %
South America36 12 %29 11 %
Off-lease6 
(1)
3 %1 — %
Total277 100 %265 100 %
_______________
(1)We currently have 6 off-lease narrow-body aircraft that are being marketed for lease. Of these aircraft, 4 were previously leased to a customer that filed for bankruptcy protection, and we expect these aircraft to remain off-lease for an extended period. Of the remaining 2 aircraft, 1 aircraft was delivered on lease to a customer during the first quarter of fiscal year 2026 and the other aircraft is expected to be delivered on lease to a customer in the second quarter of fiscal year 2026.
The following table sets forth the net book value of our flight equipment attributable to individual countries that represent at least 10% of the net book value of flight equipment based on each lessee’s principal place of business as of:
February 28,
20262025
RegionNet Book
Value		Net Book
Value %		Number
of
Lessees		Net Book
Value		Net Book
Value %		Number
of
Lessees
United States$1,516,062 18%8$1,223,496 16%7
India1,161,997 14%41,046,978 14%3





F - 18

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

The geographic concentration of our lease rental revenue earned from flight equipment held for lease was as follows:
Year Ended February 28/29,
Region202620252024
Asia and Pacific27 %29 %29 %
Europe27 %31 %30 %
Middle East and Africa5 %4 %4 %
North America30 %25 %23 %
South America11 %11 %14 %
Total100 %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:
Year Ended February 28/29,
202620252024
Number of LesseesCombined % of
Lease Rental Revenue		Number of LesseesCombined % of
Lease Rental Revenue		Number of LesseesCombined % of
Lease Rental Revenue
Largest lessees by lease rental revenue216%320%321%
For the year ended February 28, 2026, total revenue attributable to the United States and India was 21%, and 11%, respectively. Total revenue attributable to the United States included $60.1 million from gains on sale or disposition of flight equipment.
For the year ended February 28, 2025, total revenue attributable to the United States, Spain and India was 15%, 10% and 10%, respectively. Total revenue attributable to the United States and Spain included $37.8 million and $40.5 million, respectively, from gains on sale or disposition of flight equipment and maintenance revenue.
For the year ended February 29, 2024, no single country comprised 10% or more of total revenue.
Middle East Conflict
Recent armed conflicts and heightened geopolitical tensions in the Middle East have increased uncertainty regarding regional stability. Military actions and retaliatory measures involving multiple parties in the region have disrupted, and may continue to disrupt, commercial aviation and related economic activity, including oil markets and trade flows.
We are closely monitoring the evolving conflict and related geopolitical developments. While the ultimate impact on our business, financial condition and results of operations is currently uncertain, these hostilities have adversely affected, and an escalation or prolonged continuation of hostilities could continue to adversely affect, commercial aviation activity in the region, including through airspace closures, reduced flight operations, increased fuel and insurance costs, supply chain disruptions and broader macroeconomic effects. These impacts could, in turn, negatively affect the financial condition and operating performance of airlines operating in, or flying through, the region, potentially resulting in lease restructurings, payment deferrals or defaults.
As of and for the year ended February 28, 2026, our airline customers located in the Middle East represented approximately 5% of both our Net Book Value and lease rental revenue. Although our exposure to the region is limited and diversified across lessees and aircraft types, a sustained deterioration in regional or economic conditions could nevertheless have an adverse effect on our business, financial condition and results of operations.

F - 19

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Note 7. Unconsolidated Equity Method Investment
We have an equity method investment with Mizuho Leasing which has 4 aircraft with a net book value of $146.5 million at February 28, 2026.
February 28,
20262025
Beginning balance$45,813 $42,710 
Distributions from unconsolidated equity method investment(935)— 
Earnings of unconsolidated equity method investment, net of tax2,662 3,103 
Ending balance$47,540 $45,813 
On May 15, 2025, the Company received $1.0 million from our equity method investee as full repayment of the aggregate principal amount outstanding under a loan agreement.
On August 18, 2025, we entered into a new loan agreement to provide our equity method investee with a $1.0 million unsecured loan facility, bearing interest at a rate of Term Secured Overnight Funding Rate (“SOFR”) (as defined in the loan agreement) plus 2%. The loan agreement had a one-year term and was fully repaid on December 15, 2025.
On March 27, 2026, we received a distribution of $16.1 million from our equity method investee.
Note 8. Borrowings from Secured and Unsecured Debt Financings
The outstanding amounts of our secured and unsecured term debt financings were as follows:
 
At February 28, 2026
At
February 28, 2025
Debt ObligationOutstanding
Borrowings		Number of AircraftInterest RateFinal Stated
Maturity		Outstanding
Borrowings
Secured Debt Financings:
Other Financings(1)
$114,177 4
2.36% to 4.14%
11/30/31 to 06/27/32$509,104 
Less: Debt issuance costs(1,822)(6,495)
Total secured debt financings, net of debt issuance costs and discounts112,355 502,609 
Unsecured Debt Financings:
Senior Notes due 2025(2)
— 5.25%08/11/25650,000 
Senior Notes due 2026650,000 4.25%06/15/26650,000 
2.850% Senior Notes due 2028750,000 2.85%01/26/28750,000 
6.500% Senior Notes due 2028650,000 6.50%07/18/28650,000 
Senior Notes due 2029650,000 5.95%02/15/29650,000 
5.250% Senior Notes due 2030500,000 5.25%03/15/30500,000 
5.000% Senior Notes due 2030650,000 5.00%09/15/30— 
Senior Notes due 2031500,000 5.75%10/01/31500,000 
Unsecured Term Loan600,000 5.06%04/28/30— 
Revolving Credit Facilities240,000 
4.88% to 5.63%
01/18/28 to 02/9/29150,000 
Less: Debt issuance costs and discounts(50,589)(47,219)
Total unsecured debt financings, net of debt issuance costs and discounts5,139,411 4,452,781 
Total secured and unsecured debt financings, net of debt issuance costs and discounts$5,251,766 $4,955,390 
 
F - 20

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

_______________
(1)The borrowings under these financings at February 28, 2026 have a weighted-average fixed rate of interest of 3.11%.
(2)Repaid on August 1, 2025 with no gain or loss on the early extinguishment of debt.
Secured Debt Financings:
Other Financings
On May 12, 2025, we repaid in full the $391.6 million outstanding principal amount of one of our term financings secured by 17 aircraft, and $5.5 million of accrued interest. The secured term financing had a final stated maturity date of November 21, 2029. We recognized a $3.0 million loss on the early extinguishment of debt related to the write-off of unamortized financing costs.
Unsecured Debt Financings:
Unsecured Term Loan
On April 28, 2025, Aircastle Advisor, LLC (“AALLC”), a wholly-owned subsidiary of the Company, entered into a credit agreement with the lender parties thereto (the “Unsecured Term Loan Credit Agreement”) providing for a $600.0 million unsecured term loan (the “Unsecured Term Loan”). The Unsecured Term Loan bears interest at a floating rate under the Term SOFR (as defined in the Unsecured Term Loan Credit Agreement) plus 1.40% per annum and matures on April 28, 2030. Prior to April 28, 2026, the total credit commitment under the Unsecured Term Loan can be increased up to a maximum amount of $700.0 million. The Unsecured Term Loan Credit Agreement contains, among other customary provisions, a $1.1 billion minimum net worth covenant, a 2.0:1.0 minimum interest coverage ratio covenant, and a 1.25:1.0 minimum unencumbered asset ratio. The Company and Aircastle (Ireland) Designated Activity Company (“AIDAC”), a wholly-owned subsidiary of the Company, agreed to fully and unconditionally guarantee AALLC’s obligations under the Unsecured Term Loan Credit Agreement.
5.000% Senior Notes due 2030
On July 17, 2025, the Company and AIDAC issued $650.0 million aggregate principal amount of 5.000% Senior Notes due 2030 (the “5.000% Senior Notes due 2030”) at an issue price of 99.306%. The Company’s and AIDAC’s obligations under the 5.000% Senior Notes due 2030 are fully and unconditionally guaranteed by AALLC. The 5.000% Senior Notes due 2030 will mature on September 15, 2030, and bear interest at a rate of 5.00% per annum, payable semi-annually on March 15 and September 15 of each year.
Revolving Credit Facilities
On January 30, 2026, we amended our $200.0 million revolving credit facility with Mizuho Marubeni Leasing America Corporation, a related party, to extend the maturity date from January 31, 2027 to January 30, 2029. The facility bears interest at Term SOFR (as defined in the amendment to the credit agreement) plus 1.89%. This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.
On February 9, 2026, we amended our $300.0 million revolving credit facility with Mizuho Bank Ltd., a related party, to extend the maturity date from February 7, 2027 to February 9, 2029. The facility bears interest at Term SOFR (as defined in the amendment to the credit agreement) plus 1.20%. This transaction was approved by our Audit Committee as an arm’s length transaction under our related party policy.
As of February 28, 2026, we had $240.0 million in borrowings outstanding under our revolving credit facilities and had $1.9 billion available for borrowing.
AALLC Guarantees
In connection with AALLC entering into the Unsecured Term Loan Credit Agreement, AALLC agreed to fully and unconditionally guarantee (the “AALLC Guarantees”) the Company’s obligations under its revolving credit facilities and
F - 21

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

its outstanding unsecured senior notes (collectively, the “Existing Unsecured Debt”). As a result of the AALLC Guarantees, the Unsecured Term Loan ranks pari passu in right of payment with the Existing Unsecured Debt.
Maturities of our secured and unsecured debt financings over the next five years and thereafter are as follows:
Year Ending February 28/29,Amount
2027$653,398 
2028973,497 
20291,323,598 
20303,704 
20311,753,812 
Thereafter596,168 
Total$5,304,177 
As of February 28, 2026, we were in compliance with all applicable covenants in our financings.
Note 9. Shareholders’ Equity
Common Share Dividends
On March 17, 2025 and June 11, 2025, the Company paid common share dividends of $11.0 million and $30.8 million, respectively, which had been accrued as of February 28, 2025 and May 31, 2025, respectively. Each dividend was approved by the Company’s Board of Directors and the Shareholders.
Preference Share Dividends
The Company paid semi‑annual preference share dividends of $10.5 million each on March 17, 2025, September 15, 2025, and March 17, 2026, which were accrued as of February 28, 2025, August 31, 2025, and February 28, 2026, respectively. Each dividend was approved by the Company’s Board of Directors.
Note 10. Related Party Transactions
We incurred fees from our Shareholders as part of intra-company service agreements totaling $8.3 million and $8.7 million during the years ended February 28, 2026 and 2025, respectively, whereby our Shareholders provide certain management and administrative services to the Company. These fees are recorded in selling, general and administrative costs in the consolidated statements of income.
See Note 7 for our loan agreement entered into with our equity method investee during the year ended February 28, 2026.
Note 11. Income Taxes
Income taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned.
On December 18, 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act (the “Bermuda CIT Act”), which imposes a 15% corporate income tax (the “Bermuda CIT”) effective for tax years beginning on or after January 1, 2025. Accordingly, the Company is subject to the Bermuda CIT with respect to its fiscal year beginning March 1, 2025, and subsequent years.
As a result of the enactment of the Bermuda CIT Act, the Company now presents sources of income and the related components of the income tax provision by jurisdiction. Historically, such information was presented on a U.S. and non‑U.S. basis, as Bermuda was a zero‑rate jurisdiction in prior years.

F - 22

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

The table below summarizes income by jurisdiction, including from Bermuda, the United States and other jurisdictions, primarily Ireland. Income from continuing operations before income taxes and earnings of unconsolidated equity method investment for the years ended February 28, 2026 and 2025, and February 29, 2024, were as follows:
 Year Ended February 28/29,
 202620252024
Bermuda$49,287 $53,649 $31,711 
United States22,867 27,253 25,029 
Other148,095 61,556 47,636 
Income from continuing operations before income taxes and earnings of unconsolidated equity method investment$220,249 $142,458 $104,376 
Our Bermuda, U.S., and Ireland-based aircraft-owning subsidiaries are subject to taxes in their respective jurisdictions. Our non-U.S.-based aircraft-owning subsidiaries generally earn income from sources outside the United States and, as a result, typically are not subject to U.S. federal, state or local income taxes.
The Company also has Irish, Singapore and U.S.-based subsidiaries that provide management services to our Bermuda, Irish and U.S. aircraft owning subsidiaries, and are subject to taxes in their respective jurisdictions.
The table below presents the components of the income tax provision attributable to Bermuda, the United States and other jurisdictions, primarily Ireland. The components of the income tax provision for the years ended February 28, 2026 and 2025, and February 29, 2024, consisted of the following:
 Year Ended February 28/29,
 202620252024
Current:
Bermuda$1,462 $— $— 
United States6,227 2,840 4,733 
Other(19)1,558 (1,521)
Current income tax provision7,670 4,398 3,212 
Deferred:
Bermuda— — — 
United States1,304 3,548 6,535 
Other19,889 14,002 13,518 
Deferred income tax21,193 17,550 20,053 
Total$28,863 $21,948 $23,265 










F - 23

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Upon adoption of ASU 2023-09, as described in Note 1, and enactment of the Bermuda CIT, as described above, the reconciliation of income taxes at the statutory rate to our provision for income taxes for the year ended February 28, 2026, was as follows:
 Year Ended February 28, 2026
AmountAs %
Statutory tax rate (Bermuda)$33,037 15.0 %
State and local income taxes, net of federal income tax effect— — %
Foreign tax effects:
Ireland:
Statutory tax rate difference(3,698)(1.7)%
Non-deductible interest expense4,960 2.3 %
Other(3,598)(1.6)%
United States:
Statutory tax rate difference1,372 0.6 %
State and local income tax, net of federal income tax effect(1)
919 0.4 %
Other1,810 0.8 %
Change in valuation allowance (Bermuda)(5,914)(2.7)%
Other adjustments(25)— %
Total$28,863 13.1 %
_______________
(1)Primarily attributable to Connecticut state taxes.
The reconciliation of income taxes at the U.S. federal statutory rate to our provision for income taxes for the years ended February 28, 2025 and February 29, 2024, presented in accordance with the guidance in effect prior to the adoption of ASU 2023-09, was as follows:
 Year Ended February 28/29,
 20252024
AmountAs %AmountAs %
Notional U.S. federal income tax expense at the statutory rate:$29,916 21.0 %$21,919 21.0 %
U.S. state and local income tax, net1,086 0.8 %1,098 1.0 %
Non-U.S. operations:
Bermuda(11,233)(7.9)%(6,659)(6.4)%
Ireland2,531 1.8 %5,709 5.5 %
Singapore(10)— %(2)— %
Other low tax jurisdictions54 — %64 0.1 %
Non-deductible expenses in the U.S.37 — %29 — %
Other(433)(0.3)%1,107 1.1 %
Provision for income taxes$21,948 15.4 %$23,265 22.3 %







F - 24

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Cash paid for income taxes, net of refunds, during the year ended February 28, 2026, as presented in accordance with ASU 2023-09, was as follows:
 Year Ended February 28, 2026
 
Bermuda$1,500 
United States(47)
Ireland(218)
Other122 
Total cash paid for income taxes, net of refunds$1,357 
The significant components of the Company’s deferred tax assets and liabilities as of February 28, 2026 and 2025, consisted of the following:
 Year Ended February 28,
 20262025
Deferred tax assets:
Net operating loss carry forwards$305,879 $282,103 
Interest expense carry forwards2,594 2,648 
Other22,714 21,369 
Valuation allowance(39,744)(45,641)
Total deferred tax assets291,443 260,479 
Deferred tax liabilities:
Accelerated depreciation(424,356)(370,989)
Other(7,590)(8,124)
Total deferred tax liabilities(431,946)(379,113)
Net deferred tax liabilities$(140,503)$(118,634)
The Company had $415.2 million of U.S. federal net operating loss (“NOL”) carry forwards available at February 28, 2026 with no expiration date to offset future taxable income subject to U.S. graduated tax rates. The Company also had NOL carry forwards of $1.3 billion with no expiration date to offset future Irish taxable income. The Bermuda CIT Act includes a provision that allows the Company to carry forward losses incurred in Bermuda for the year ended February 28, 2021 and subsequent fiscal years. The Company has NOL carryforwards of $262.9 million with no expiration date to offset future Bermuda taxable income. A full valuation allowance of $262.9 million has been recognized against the Bermuda NOL carry forwards based on all available information, including projections of future taxable income.
Deferred tax assets and liabilities are included in other assets and accounts payable, accrued expenses and other liabilities, respectively.
We do not expect to incur income taxes on future distributions of undistributed earnings of non-U.S. subsidiaries and, accordingly, no deferred income taxes have been provided for the distributions of such earnings. As of February 28, 2026, we have elected to permanently reinvest our accumulated undistributed U.S. earnings of $44.9 million. Accordingly, no U.S. withholding taxes have been provided. Withholding tax of $2.2 million would be due if such earnings were remitted.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. We did not have any unrecognized tax benefits.
We conduct business globally and, as a result, the Company and its subsidiaries or branches are subject to foreign, U.S. federal and various state and local income taxes, as well as withholding taxes. In the normal course of business, the
F - 25

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

Company is subject to examination by taxing authorities throughout the world, including major jurisdictions such as Bermuda, Ireland and the United States.
Our policy is that we will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the year.
Ireland and Bermuda Tax Law Changes
On December 18, 2023, Ireland enacted Finance (No. 2) Bill 2023 (the “Finance Bill”) which includes legislative changes for new tax measures and amendments to the Irish tax code, such as provisions to implement the Pillar Two GloBE rules, new outbound payment rules, and a dividend withholding tax, among other changes. The Finance Bill did not have a significant impact on our consolidated financial statements for the year ended February 28, 2026.
On December 18, 2023, Bermuda enacted the Bermuda CIT Act, which imposes a 15% corporate income tax regime that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025. The Company has appropriately considered the impact of the Bermuda CIT and its impact on current and deferred income taxes.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the United States. The OBBBA introduces an increased tax deduction for interest expense and a 100% bonus depreciation on U.S. leased assets. The OBBBA did not have a significant impact on our consolidated financial statements for the year ended February 28, 2026.
Note 12. Interest, Net
The following table shows the components of interest, net.
 Year Ended February 28/29,
 202620252024
Interest on borrowings and other liabilities$271,362 $244,044 $228,539 
Amortization of deferred financing fees and debt discount18,032 17,033 17,090 
Interest expense289,394 261,077 245,629 
Less: Interest income(7,255)(12,492)(13,710)
Less: Capitalized interest— (662)(2,869)
Interest, net$282,139 $247,923 $229,050 
Note 13. Commitments and Contingencies
Rent expense for office space leased in Stamford, Connecticut, Dublin, Ireland, and Singapore, $2.3 million, $1.9 million and $2.3 million for the years ended February 28, 2026 and 2025, and February 29, 2024, respectively.
As of February 28, 2026, future minimum lease payments under non-cancelable operating leases were as follows:
Year Ending February 28/29,Amount
2027$3,220 
20283,251 
20292,458 
20301,649 
20311,451 
Thereafter14,522 
Total$26,551 
F - 26

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

As of February 28, 2026, we had commitments to acquire 17 aircraft for $829.5 million.
As of February 28, 2026, commitments, including $34.4 million of remaining progress payments, contractual price escalations and other adjustments for these aircraft, net of amounts already paid, were as follows:
Year Ending February 28/29,Amount
2027$583,400 
2028114,456 
2029131,670 
2030— 
2031— 
Thereafter— 
Total$829,526 
Note 14. Other Assets
Other assets consisted of the following as of February 28, 2026 and 2025:
 February 28,
 20262025
Deferred income tax asset$6,556 $78 
Lease incentives and premiums, net of accumulated amortization of $82,350 and $73,915, respectively
28,211 43,285 
Flight equipment held for sale45,120 56,983 
Aircraft purchase deposits and Embraer E-2 progress payments14,887 30,166 
Right-of-use asset(1)
13,279 14,655 
Deferred rent receivable, net(2)
— 20,086 
Investments, at fair value(3)
5,704 9,912 
Other investments, net(2)(3)
728 4,916 
Other assets95,195 93,440 
Total other assets$209,680 $273,521 
______________
(1)Net of lease incentives and tenant allowances.
(2)Net of an allowance for credit losses as of February 28, 2025 – see Note 15.
(3)See Note 2.
Note 15. Allowance for Credit Losses
The activity in the allowance for credit losses related to our net investment in leases, other investments, and deferred rent receivables for the years ended February 28, 2026 and 2025, were as follows:
Net Investment in Leases, net
Other Investments, net
Deferred Rent
Receivables, net
Total
Balance at February 29, 2024
$7,714 $3,209 $2,146 $13,069 
Provision (benefit) for credit losses(300)890 8,125 8,715 
Write-offs(612)— — (612)
Balance at February 28, 2025
$6,802 $4,099 $10,271 $21,172 
Provision (benefit) for credit losses(357)— 300 (57)
Write-offs(346)(4,099)(10,571)(15,016)
Balance at February 28, 2026
$6,099 $— $— $6,099 
F - 27

Aircastle Limited and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share amounts)

During the year ended February 28, 2026, the allowance for credit losses related to our other investments and deferred rent receivables was written off, as the associated customer filed for bankruptcy protection.
Note 16. Accounts Payable, Accrued Expenses and Other Liabilities
Accounts payable, accrued expenses and other liabilities consisted of the following as of February 28, 2026 and 2025:
 February 28,
 20262025
Accounts payable and accrued expenses$54,605 $51,889 
Dividends payable10,500 21,500 
Deferred income tax liability147,059 118,712 
Accrued interest payable61,366 37,607 
Lease liability15,898 17,480 
Lease discounts, net of accumulated amortization of $37,943 and $21,707, respectively
91,846 47,944 
Total accounts payable, accrued expenses and other liabilities$381,274 $295,132 
 
F - 28


SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, Aircastle Limited has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: April 21, 2026
Aircastle Limited
By: /s/    Michael Inglese
 Michael Inglese
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Aircastle Limited and in the capacities and on the date indicated.
SIGNATURETITLEDATE
/s/    Michael IngleseChief Executive Officer and DirectorApril 21, 2026
Michael Inglese
/s/    Roy ChandranChief Financial OfficerApril 21, 2026
Roy Chandran
/s/    Dane SilvermanChief Accounting OfficerApril 21, 2026
Dane Silverman
/s/    Tomoaki OgasawaraChairman of the BoardApril 21, 2026
Tomoaki Ogasawara
/s/    Douglas A. HackerDirectorApril 21, 2026
Douglas A. Hacker
/s/    Yasuhiko HashimotoDirector
April 21, 2026
Yasuhiko Hashimoto
/s/    Naoshi HiroseDirectorApril 21, 2026
Naoshi Hirose
/s/    Satoshi IrieDirector
April 21, 2026
Satoshi Irie
/s/    Charles W. PollardDirector
April 21, 2026
Charles W. Pollard

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