Operator: Good day everyone, and welcome to the Aircastle Q2 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Frank Constantinople, Investor relations. Please go ahead sir.

Frank Constantinople: Thank you, Tony. Good morning everyone and welcome to Aircastle Limited's second quarter 2017 earnings call. With me today are Mike Inglese, Chief Executive Officer; Mike Kriedberg, Aircastle's Chief Commercial Officer; and Aaron Dahlke our CFO. We'll begin the presentation shortly, but I'd like to remind everyone that this call is being recorded and a replay will be available through our website at www.aircastle.com, along with the earnings press release and our PowerPoint presentation. I would like to point out that statements today which are not historical facts may be deemed forward-looking statements. Actual results may differ materially from the estimates or expectations expressed in those statements and certain facts that could cause actual results to differ materially from Aircastle Limited's expectations are detailed in our SEC filings, which can also be found on our website. I'll direct you to Aircastle Limited's earnings release for the full forward-looking statement legend. And will now turn the call over to Mike Inglese.

Mike Inglese: Thanks Frank. Good morning everyone and welcome to our second quarter 2017 earnings call. Today I'm going to discuss our Q2 results, the current business environment and where Aircastle is presently finding investment opportunities. I'll then turn the call over to Aaron to cover our financial results and then we'll be happy to answer questions. Our underlying results improved in the second quarter of 2017 versus the prior year second quarter reflecting the effectiveness of our acquisitions and sales activity over the past period. We continue to sell into strength during the second quarter to opportunistically realized gains and reduce residual value risk across the fleet in a disciplined and thoughtful manner. Aircraft values have remain firm with low interest rates and investor searching field have assisted our efforts to profitably sell leased aircraft. That aside, our recent aircraft acquisition activity net of sales resulted in healthy lease rental revenue growth of 8% versus the prior year. For the second quarter of 2017 we acquired seven narrow-body aircraft for approximately $86 million and have either closed or committed to close more than $1.2 billion for 2017. Our fleet owned and managed totaled 203 aircraft at the end of the quarter while this is down from 213 at the end of the first quarter, we probably sold 13 older narrow-body aircraft for gain of $13.5 million in the quarter and reduced our exposure to Air Berlin. Given the timing of acquisitions and sales, our net growth is in a straight-line quarter-to-quarter but we have solid pipeline of transactions and we expect net mid-single digit percentage fleet growth for the year. During the second quarter we also agreed to sell three freighters which reduces our remaining exposure to freighters to approximately 4% of our book from a little less than 8% at the end of the first quarter. As the final part of our planes freighter exist, the leases on our remaining production freighters do not expire into the next decade and we expect to part out our last converted freighter at its leased expiry next year. As a result of these opportunistic freighter sales, we reported non-cash transactional impairment charges of $65.7 million or $0.84 a share net. This amount includes offsetting maintenance revenue of $13.5 million. The net loss per share was $0.09 for the quarter versus $0.25 net income in the prior-year or adjusted income per share fell to $0.03 from $0.31 in the prior-year. Aaron will take you through the financial results in more detail. However excluding the impairment and separation compensation, pretax EPS would've been approximately$0.79 representing a healthy improvement in core profitability. Cash ROE over the past 12 months was a solid 12.9% consistent with our long-term average. Aircastle continues to be disciplined value investor in commercial aircraft by not having large forward commitments and maintaining significant liquidity, we can be nimble, flexible and opportunistic in our investment approach. As we stated many times before, we do not target aircraft's age in determining what makes sense to buy or sell, and we continue to source that we feel is the best risk-adjusted aircraft investments given the current and expected market environment. At present time driven by persistently lower oil prices and strong interest from airlines for single aisle aircraft, we continue to see best relative value in mid-age current technology narrow-body and there have been a number of opportunities that we are able to originate and close during the first year. For the second half of 2017, we'll continue to take advantage of strong investor demand for aircraft to shape our fleet mix and we have arranged for the sale of additional aircraft that will generate gains and further reduce residual value risk. In 2015 and 2016 we sold the combined 61 aircraft for total gains of $97 million, profitable selling continue to the first half of this year and our planned sales for the full year will increase our liquidity and our earnings and enable us to continue to upgrade the overall quality of the portfolio. For the full year of 2017, we expect to invest around $1.5 billion and sell around $800 million of assets. Accordingly the net book value of our fleet should be roughly 5% higher at the end of this year versus year end 2016. At the end of Q2, our owned and managed fleet of 203 aircraft was up from 167 at the end of 2015. Since the second quarter of 2012, net book value of our owned and managed fleet has increased at a compounded annual rate of about 6% per year and with $6.8 billion at quarter end. Prudent discipline growth is consistent with our strategic objective of extending our franchise value and driving to an investment grade rating. With healthy cash interest margins and investment grade credit rating will expand our borrowing days, provide further access to deeper pool of capital, reduce funding costs and further improve margins in ROE. Second quarter utilization was 99.3% showing a continued strength in our portfolio. We had no aircraft on the ground at the end of the quarter and I'm pleased to report that we placed the last of our four A330s that were coming off lease this year from Singapore airlines. At the end of the second quarter our schedule placement cash for 2017 was complete and we have since turned our attention to longer-term placement activity. With respect to our easyJet order, we've seen increased activity for the E2 over the past few months and are actively involved in campaigns with multiple airlines this time. We remain confident in the capability of the E2 aircraft type and our ability to successfully place these deliveries. Aircastle is a broadly diversified fleet with risk spread across 71 lessees operating in 38 countries. We proactively monitor and manage credit and political risk in order to quickly and efficiently move assets around the globe. The aircraft leasing model is durable and is strong cash flows and the aircraft at modern, in demand and portable. Let me speak for a moment about the business environment. Economic growth is healthy and IATA is now projecting unusually strong air traffic growth of around 7.5% for the full year 2017. Load factors are at record high levels, airline profitability is strong and storage rate indicates there's healthy demand for aircraft. Financing is clinical and low fuel part is good for our customers enhanced for our business. It's competitive market for new investment opportunities but we continue to find good acquisition opportunities in select areas of the secondary market and are seeing a steady flow of new business that we feel represents good value. Given our considerable liquidity and minimal forward commitments, we can act swiftly to take advantage of investment opportunities as they emerge. Longer term, we feel the fundamentals for the aircraft business remains strong and Aircastle is well-positioned for steady and profitable growth. The global fleet is expected to double in the next 20 years and we're confident there will be strong demand for modern aircraft and for aircraft's leasing as an industry. Currently it is view that best investment opportunities remain with current generation narrow-body aircraft, a market which continues to perform well mostly due to the persistently low oil price environment. We are sourcing a healthy number of new transactions due to our track record and reliability as a strong counterparty for quick and steady access to reasonably priced capital. Competition for new aircraft [indiscernible] remains intense and low price of fuel has enabled longevity and utility of current generation aircraft. We expect this to continue as longevity remains around current levels. To summarize, our leasing market conditions are competitive to worldwide aviation macro environment as a strong since it’s ever been. We remain confident we'll find opportunities that are nimble value investor with access to capital. Financial market conditions are strong, oil price is at low, the airline industry profitability is strong and air-traffic continues to grow at a very healthy rate. We greatly reduced our freighter exposure, our 2017 placement task is complete, our utilization is strong and we're making good progress on our easyJets without large forward commitments we have a well-positioned platform and a strong teams to execute our strategy. With that, I'll now turn it over to Aaron who will provide a short update on our second quarter financial performance before opening it up questions.

Aaron Dahlke: Thanks Mike. As stated earlier, from a core profitability perspective Aircastle had a strong second quarter. Our second quarter net loss of $7.1 million was largely driven by the $65 million of net transactional impairment charges recognized in connection with opportunistic freighter sales discussed earlier. During the quarter we also recognized 5.1 million of separation and disability compensation under Ron Wainshal's employment and share-based award agreements. Underlying results were strong. Lease rental and total revenue growth 8% and 18% respectively compared with the prior-year second quarter. Our 12-month cash ROE for the quarter was 12.9%. Our operating cash flows for the quarter were strong $115 million, up 2.1% of the prior year. We enjoyed strong utilization of 99.3% in the quarter and had no aircraft underground at quarter end. Lease rental revenues were $195 million in the quarter, up 8.1% year-over-year due to a net impact of aircraft investments. Total revenues for the quarter were $223 million up 18% largely due to the higher lease rental and maintenance revenues. Maintenance revenues growth $16 million driven by return compensation associated with aircraft that transitioned during the quarter, any freighter aircraft that we agreed to sell. Adjusted EBITDA for the quarter was $224 million versus the $182 million for the prior-year. Higher lease rental and maintenance revenues of $31 million and higher gains of aircraft sales of $11 million our calendar for the year-over-year improvement. Adjusted net income for the quarter was $2.4 million, a decrease of $21.8 million. Higher revenue was $33 million and higher gains for our aircraft $11 million were offset by the higher impairment charges of $63 million and higher depreciation and SG&A of $6 million. Interest expense for the quarter was $61 million down modestly versus the prior year to lower amortization of deferred losses and terminated interest rate derivatives. Depreciation for the quarter rose by $3.2 million versus the same period last year as a result of net growth in the fleet. At the end of the quarter we owned 190 aircrafts with a net book value of $6.2 billion including 157 unencumbered aircraft with an net book value of $4.5 million. At the end of the second quarter, we managed another 13 aircraft to our two joint ventures that has net book value of approximately $675 million. For the second quarter of 2017, our annualized portfolio of lease rental yield was 12.3% and our net cash interest margin was 8.8% which has remained consistent for the past four quarters. At the end of second quarter of 2016 we had $481 million of unrestricted cash and $810 million of unused revolver capacity, total borrowings were approximately $4.3 billion including $3.3 billion of unsecured debt. The weighted average coupon of our debt was 4.83 with a weighted average maturity of approximately 4.1 years. Our net debt to equity ratio was 2.1 times and unsecured debt represented 76% of total debt at quarter end. For the third quarter of 2017, our Board approved a $0.26 common dividend payable to shareholders of record on August 31. This is our 45th consecutive dividend. Since going public in 2006 we paid out $726 million in dividends and have increased the dividend seven times since 2011. As usual our guidance elements for the third quarter of 2017 have been included in the earnings press release and the PowerPoint, both of which were posted to our website today. The wide range of guidance for expected gains from sold aircraft reflects potential timing issues between quarters. In conclusion, our underlying result in the second quarter were strong we are in fact for profitable fleet growth on a full-year basis. We continue to grow the fleet by acquiring attractive asset in a disciplined manner, opportunistically selling aircraft to generate gains, reduce risk and enhance our overall asset mix. For 2017 placements are behind us. Our remaining fleet exposure has been largely addressed and importantly we have very modest for commitment. Currently our second quarter results demonstrate Aircastle's longer term earnings profile and underlying profitability's improving quarter-after-quarter. We currently have significant liquidity. Our operating cash flows remain strong and our conservative capital structure is flexible and put strong access to additional financing. We are well-positioned to continue to drive shareholder value and return by executing our discipline and flexible approach in an ever-changing market environment. With that operator, we're happy to open up the call for Q&A.

Operator: [Operator Instructions] We'll go first to Arren Cyganovich at DA Davidson.

Arren Cyganovich: One of you just talked a little bit about the portfolio of sales of the two production freighter aircraft, while sell them I guess they were maturing within the next 12 months, so why sell them early. And how much of those sales reduce that monitor list which I think was around $615 million last quarter?

Mike Inglese: So Arren, when we looked at our freighter exposure and the possibility that these two are going to come off lease, one shortly and the other in the early part of next year. We look at what we thought were the release and monetization scenarios and we found an operator in Asia who placed a good value on these assets they are coming back strong out of their existing leases in the Middle East and we thought it was best given the long-term outlook for the wide-body freight market to hedge our back to that, take some of this money off the table at the time. In addition, we’ve extended and pushed out the lease terms on the remaining three production freighters we have in our fleet well into the next decade. And so with the last converted freighter getting parted out in the first half of next year, we frankly will be - we’re going stop talking about freighters probably for a long time.

Arren Cyganovich: And then I was wondering if you could comment a little bit about the news reports that you had hired an advisor to explore strategic options, if you can make any comments about that?

Mike Inglese: No, look our policy is but frankly we don't comment on speculation about market trading activities. We believe we can continue to grow our business organically as we done for the last decade. We will continue to evaluate potential opportunities in the marketplace for nonorganic growth as a practical matter and in the context of finding transactions that we think will make sense for our shareholders we will pursue them, but we haven't found one of those yet, doesn't mean we might not in the future. It’s always on our radar screen for ways to enhance and produce the best shareholder value for our constituents.

Arren Cyganovich: And just from a modeling perspective, what's the split of expected purchases and sales for the third quarter and fourth quarter out of what you've laid out for the second half?

Mike Inglese: We have a lot of sales frankly that we expect to happen during the third quarter. And I’d say the remaining investment activity was probably more fourth quarter weighted than third quarter weighted.

Operator: And we’ll go next to Gary Liebowitz of Wells Fargo Securities.

Gary Liebowitz: Mike, going back to the E2 placements, I feel like you’ve been saying you’ve been making progress for several quarters, but we don’t see any announcements of actual placements. I’m wondering if you can remind us what your delivery schedule looks like if you have unplaced 2018 slots. And at what point do we start thinking about different deliveries?

Mike Inglese: So, look we're continuing to market the aircraft as it be a manufacturer. We’ve seen better traction in the last quarter than we've seen today. In terms of our delivery position, they’re late next year, and we have in context of a regional jet, which is not a very long lead time in the context of configuration, we don't think it’s time to be worrying about deferrals in that framework. So we're continuing to work the program. We still feel like we're going to get good results from it and that's pretty much all we can say at this point.

Gary Liebowitz: And how many deliveries are scheduled for next year?

Mike Inglese: I think we have a few aircraft that are laid next year.

Gary Liebowitz: Also if I look at your guidance for the third quarter, you have lease rental revenues down at the midpoint, about $17 million from where they were in Q2. Can you give us some sort of sense, how much of that is from aircraft that you sold in the second quarter versus the lower lease rates you’re seeing on the A330s that are going back into service? Just in general sense.

Aaron Dahlke: I think the majority of it is going to be related to asset sales and assets that are getting sold in the third quarter. Some of which have been sold include relatively new wide-bodies.

Operator: We’ll go next to Helane Becker at Cowen & Company.

Unidentified Analyst: It's [Connor] in for Helane. There’s been a lot of discussion around the Gulf carries this earnings season. And now it seems like it's - things are going to differ some aircraft. You guys had relationships there in the past. Can you just talk maybe a little broadly about what you’re seeing in that market, and do you think the deferrals are potential opportunity for you guys longer-term? Thanks.

Mike Inglese: First of all, we don’t have any new aircraft that would have been expected to go into the Gulf carrier. So let me start by saying that. Our traders that we’re selling are tuned that are coming out of Emirates as their leases expire. And so our exposure to the three major Gulf carriers will be very modest as a result of that. Whether there’re potential deferrals or slowdown in their growth presents other opportunities for us. It is certainly something that remains to be seen, although it's not necessarily something we’re counting on in the context of what we expect to be able to do in the second half of this year and looking into next year at this point in time.

Unidentified Analyst: And then on the pipeline and just the aircraft that are going to be sold, can you just give some characteristics around like what those planes are and what we should be thinking. Should be thinking like that it’s more narrow-body related in terms of the pipeline growth going forward? Thanks.

Mike Inglese: Yes, I think in terms of what we expect to add and what we have in our sites for the second half of this year and starting to look into next year is largely driven by current generation mid-aged narrow-body additions. And as I just mentioned to Gary, in the context of sales activity for the balance of the year in the third quarter, we have a fair number of wide-bodies that we expect to sell at a gain. And we also have a handful of classics, our last classic 757, that’ll be coming out of American. That will be headed to Asia and converted into freighters by the new owner for use in the possible business in China.

Operator: We'll go next to Moshe Orenbuch with Credit Suisse.

Moshe Orenbuch: Just sort of following up on Gary's question, it does look like the combination if you will of your net revenues seem to be contracting and in the third quarter, you mentioned ,it's probably at least in part due to the sales. What's the timeframe for that turnaround and, kind of how does that – how does that has come about?

Mike Inglese: Well as I said, with what we have tied up now for the third quarter sales and some fourth quarter activity will come through and we expect to add more assets in the second half of the year than we did in the first half. So by the end of the year, we would expect that - that - lease rate – run rate to tick up exiting 2017 based on what we are seeing today.

Moshe Orenbuch: Could you talk a little bit about your – your largest shareholder [Marubeni] and what their perhaps their kind of long-term interests might be and whether you would be interested in having them own a loan a larger percentage of the company?

Mike Inglese: We can't speak for our largest shareholder and what their long-term intentions are. I can tell you, they've been with us as a major shareholders since the middle of 2013. They are very pleased with what we've been able to do with the business over the last four years and I think they are long-term believer in the business model and the opportunity in the industry fundamentals in this set. I can't speculate on their aspirations for larger ownership or whether that could happen or when that could happen.

Moshe Orenbuch: I guess maybe just to follow-up, if I assume that, your board has to approve each time that there’s a change and is there anything that you can kind of comment as to whether that’s something they would consider.

Mike Inglese: Look under the terms of our existing shareholder agreement [Marubeni] does not have the ability to buy any more shares of Aircastle. They are roughly at 27.5% and they could not buy beyond that without board approval from Aircastle's independent Directors. So the nature of their investment as a major minority shareholder and the terms of our shareholder agreement have them at the limit of where they could get without formal approval from the Aircastle Board who obviously will be looking out for the interests of all the shareholders of the company.

Aaron Dahlke: If we were to repurchase shares, we could push them up above that 2017 view.

Moshe Orenbuch: So, if you were to buy back shares. Got it. Thanks so much.

Operator: We will go next to Jamie Baker, JPMorgan.

Unidentified Analyst: This is [Nishan] for Jamie. I wanted to ask about your comment on having a bias towards current generation narrow-body aircraft in terms of acquisition opportunities. There is sold one 777 in early July. Just wanted to kind of square those two things together, I mean does this signal in your mind the idea that the wide-body market still has farther to kind of compress the four opportunities to become more compelling on the acquisition side?

Mike Inglese: No. I don’t think you necessary take this out with respect to the wide-bodies. As we looked at investor appetite and demand for assets, there are certain investors who are interested in certain asset types and certain geographies of lessees that in the context of what we own and our exposure to certain customer made us conclude this might not be a bad place to trim some capacity at this time. So it’s not a blanket statement about the particulars of the wide-body market today or going forward.

Unidentified Analyst: And in terms of acquisition opportunities, I mean have you sensed the change in who the incremental seller is to Aircastle for example, are you picking up on perhaps fewer opportunities coming from other less source or perhaps more from other airlines. Just want to get a sense of where these incremental deals are being sourced, whether that’s changed kind of relative to the past?

Mike Inglese: It’s still a fair mix. If some of the last year where focus is midlife now and general. We still see a good number coming from being sold by lessor. We’re also seeing a fair number of select purchase lease backs and the mid life runs an economics seems to be holding up okay. Specially, given the lower fuel prices.

Operator: We go next to Catherine O'Brien with Deutsche Bank.

Catherine O'Brien: The last quarter you know that you had 220 million of aircraft acquisition, that would likely close in the June quarter and then another $100 million in LOI stage, but ends up only closing on $86 million. Could you just explain, what delayed the timing of these acquisition and speak about how confident you are that the $950 million of acquisitions, you plan for the back half of 2017 will close for year end?

Mike Inglese: So, the reality is, sometimes, transitions take a little longer than you expect, so there's nothing nefarious or unusual in the context of hundred and whatever being 86 for the quarter. In the context of what we expect to happen later this year, today, it feels like most of it can get done in the second half of this year that doesn't mean couple aircraft couldn’t slip into first part of 2018 and that’s the nature of the business. We’re not trying to run the business and do on unnatural acts to make something happen in any particular quarter here that usually is a bad idea from our perspective.

Catherine O'Brien: And then just one quick follow-up on the freighter discussion. It sounds like, you've taken out the risk over the next couple years on these remaining aircraft that you have. But is the plan today for you to own those freighter aircraft through the end of their leases or do you anticipate maybe looking for another early out on those, like you did this quarter?

Mike Inglese: It’s too early to tell we don't have any current plans to sell those aircraft, but that doesn't mean an opportunity might not pop up in the future that we think make sense in the context of deploying that capital.

Catherine O'Brien: If I can sneak in one quick one. So, you note that the sale, lease back market continues to remain competitive. But you found some good pockets for aircraft acquisitions still. Does your analysis continue to result in the best use of your cash being these aircraft acquisitions rather than greater return to shareholders and how often are you evaluating that that every aircraft you look at or kind of look at quarterly review?

Mike Inglese: Look, we look at it periodically, you can’t change your capital allocation strategy every day. So we look at what we think we can buy in the context of aircraft investments to grow this business and the growing cash flow and earnings profile of the business. We look at our dividend level and will revisit that later this year as we have done every year for the last number of years to appropriates size that in the context of regular return of capital to shareholders. And if the stock price fluctuates in a way that we think it makes sense to buy some of that back rather than buy a few plants we’ll do that as we've done in the past. So simplistically, there is the three main thoughts around capital allocation in the context of shareholders are and not necessarily always in the same order adding aircraft, paying dividends, and buying stock back and if the environment turned and there were some other things to do like delever for a while that – that's a possibility as well. We haven't seen not necessarily, but we look at it periodically. We think about what we’re doing and we try to do it in a thoughtful passion that will return, generate total shareholder return.

Operator: Next is Scott Valentin with Compass Point.

Scott Valentin: Just with regard to the fleet profile, just looking year-over-year from the press release it looks like the fleet got a little bit older and the weighted average remaining lease term declined a little bit. Just wondering going forward given the CapEx plans. What should happen to both those measures in terms of fleet age and lease term?

Aaron Dahlke: Look, we don’t – and we said it a million times, we’ll probably say a million more. We don’t manage the business to those specific metrics. Practically speaking when we look at the things we have sold, the things we're likely to buy in the second half of this year and the passage of time that maybe the case that the fleet gets a little bit older. I would expect the weighted average lease term to hang around where it is more or less over time. But they will depend upon what we’re buying and what that implies to the overall portfolio mix.

Scott Valentin: And then in terms of the margin outlook, I know it’s been stable. Do you expect to be stable or just pricing in the secondary market put some pressure on margin?

Aaron Dahlke: I think time will tell, it feels like we’re at a reasonable level now. There could be some modest pressure going forward in the context of margin compression if investment dollars keep seeking aircraft assets. But it’s hard to predict on a longer-term basis. We continue to manage down the cost of funds. What lease rate yields are available in the marketplace versus overall returns in the context of buying planes is, what will all have to wait and see.

Operator: And next to Justine Fisher, Goldman Sachs.

Justine Fisher: So the question I had is on ratings in the context of the strategic outlook for the company and given the headlines about potentially exploring strategic options with M&A et cetera. I’m wondering if the rating agency just said that the kind of conversations are on hold now in terms of rating upgrades until the strategic path of the company is settled so that we can major be in this kind of holding pattern on trading. So something like that is decided or is there still kind of rating upside despite somewhat uncertain environment on the strategic outlook?

Mike Inglese: No, there has been no change in the rating agencies discussions we’ve had - there is no change in the fundamental outlook for the ownership structure of aircraft. As I said we’re planning to continue to grow this business organically the way we have and we think if we continue to do what we've been doing we can get the upgrade from S&P over the next year. Parts of things go into what that implies, but there's no change in their tone, there's no change in our tone and I wouldn't read too much into market roamers.

Justine Fisher: And then other question is just on the wide-body front, Air Lease had said on it conference call that it expects to see wide-bodies used on narrow-body routes and if that could increasingly become a trend if some routes that narrow-body get larger and larger. And so is any of the business that you guys are looking at either in conversation that you’re having with airlines that might be considering wide-body - are any of the conversations you're having collaborating that trend?

Mike Inglese: I haven’t seen that although generically speaking there is an up gauge in narrow-body aircraft I think operationally across the world but no I am seeing that. But remember we don’t have a large order stream or anything like that on our placement side but I haven’t seen that for sure.

Mike Kriedberg: I think the premise that there are lots of capacity constraints that has density routes that would make sense for using A330s instead of narrow-bodies, I think that’s a logical premise and I think you will see that play out over time particularly in Asia.

Operator: [Operator Instructions] Next to Kristine Liwag with Bank of America/Merrill Lynch.

Kristine Liwag: As of last quarter 10% of your net value was schedule to expire in 2018 and 16% was scheduled to expire in 2019. I was wondering if this change in the quarter and also how many of these scheduled lease expirations already have contracted follow on leases and how many lease only to place?

Mike Kriedberg: So for 2018 we have basically it’s all on the back end Q4 of 2018 where we have seven narrow-bodies that were focused on and two wide-body and what I can tell you is of the seven narrow-bodies while we don’t have anything officially agreed, we have a pretty good line on extensions on a number of them and possibly one for [indiscernible]. So it’s really not much to talk about its pretty smaller scheme of things. So the key focus would be the two wide-bodies in the backend of Q4.

Kristine Liwag: And in 2019?

Mike Kriedberg: In 2019 it’s a little bit more than that I don't have the numbers in front of me but certainly more than that but probably remember these are new aircraft generally with kind of mid life placements, releases usually doing it within an 18-month or less window well as new aircraft a little longer than that we did more planning in the new placements. So we haven’t had a heavy focus on 2019 at this point at all.

Mike Inglese: I think when you look at 2019 and 2020 and 2021 in the context of our fleet today, you'll probably see something in the order of two dozen aircraft that require remarketing in each of those years and in 2019 and 2020 it will be a mix of narrow-bodies and wide-bodies rolling off and even in 2020 you will have that same phenomenon. So it's a number of units and asset type cast that we’ve done many times in our past and today we’re focused on looking at Q4 of 2018 which is where all of our 2018 expiries are at the moment. We’re working on the wide-bodies, we don't have anything to talk about just yet on those assets and the narrow-bodies were half way or more through of what we think is the likely outcome on those assets at this point in time.

Kristine Liwag: And I guess I mean if I look at those three years that accounts of about a quarter of your net book value, I was wondering when since these are older aircraft and these are subsequent leases, can you provide color on how we should think about these revenue step downs for these assets. And also base on where lease are in the market and looking at where you’re carrying value is for these airplanes, do you foresee taking anymore impairment charges once this lease is expired?

Aaron Dahlke: Well I can’t see I don’t but I’ll let Mike speak to that but what I can tell you is the market with midlife placements have been very stable. So we're not expecting to see a real reduction significant change in the rentals at all. In fact we’ve seen demand pick up in a number of cases. So the marketing side still looks pretty good and most of these are narrow-bodies but I’ll let Mike speak to the impairment.

Mike Inglese: Yes, I think it’s too early to predict the outcome of whether they’ll be an impairment or not on any of the wide-bodies in our fleet quite frankly that will depend upon how the market shapes out over the next month compared to our existing expectation. So I don't really want to speculate a few years out of what I think the market will be and what that might mean for asset impairments in the future.

Kristine Liwag: And maybe one more follow on to that, for the wide-bodies that you mentioned that could have impairment can you just quantify what percentage or net book value that is?

Mike Inglese: I didn't say there are wide-bodies that could have impairment, I am saying if there was an asset class where I would expect there might be - that might be it and I'm not in a position to give you a specific guidance on net book value or specific asset at this point.

Operator: We’ll go next to Vincent Caintic with Stephens.

Vincent Caintic: Most of my questions have been asked but just wondering if we could talk about the impairment policy a little bit more. So you took your impairment charge this quarter after review, it does seem to be that it was driven based on actual sales. So I assume that it has been marked to the sales price. So I guess when I think about it, I think about it like a loss on sale. But after your annual review this quarter and the gain on sale you're having for, you’re guiding us two for third quarter. Should we be expecting anymore impairments for the next four quarters - in the past it's kind of have been small increments here and there but after the review are we done until the next annual review? Thanks.

Mike Inglese: So we do an annual recoverability if that’s been of every airplane we own and as a result of that study this year we did not take an impairment charge on any of those aircrafts. The impairments we took on the freighter sales were related to the sales price versus the carrying value net of maintenance revenue on those aircraft. If I had released those planes and done something else what they have been impaired this quarter, maybe not, probably not but that doesn’t mean that I didn’t think that selling them and hedging my bets on freighters going forward wasn't the best idea for the future of Aircastle. So that's what we did. So our next recoverability assessment will be in the year and absent any big credit events between now and then I wouldn't expect any asset impairments to materialize in the context of our business operation.

Operator: We’ll go next to Gary Liebowitz, Wells Fargo Securities.

Gary Liebowitz: Just to clarify on last statement, so had you not sold these two freighters where you booked something like $70 million charge you would not have impaired them?

Mike Inglese: There were other opportunities to deploy these assets in different configuration and different places in the world that perhaps would not have produced an impairment charge today. So but you got to think a lot about a lot more things that has - what today’s cash flow forecast and you have think about net present value, you got to think about redeploying capital and taking opportunity to take some chips off the table on a sector that you're trying to get out of.

Gary Liebowitz: Two quick follow-ups but separate. When you say no aircraft on the ground at the end of Q2 just to be clear that doesn't mean all your planes were in revenue generating service but you just said there was a contract around to get back into service, is that correct?

Mike Inglese: No, they were all in revenue generating service at the end of the quarter..

Gary Liebowitz: Also can you talk about South African Airways, it’s your number five customer. I think you have four wide-bodies there. Are there current and is there any contingency planning going on given what's there could be state of that airline?

Mike Inglese: We have four A330s on lease with South African Airlines that has been there for a long time. Their current - the government has supported that Airline since its inception. And we have no immediate contingency plan underway in the context of that our aircraft are critical to the long-haul operation. There is a lot less efficient aircraft in operation in that business model that are likely be casualties before ours if they did something. We continue to monitor the situation obviously but it's not one of the things that keeps me awake at night.

Operator: We're standing by with no further questions. At this time I would like to turn the conference back to Frank Constantinople for any closing remarks.

Frank Constantinople: Thank you for your time today. If you have any follow-up questions feel free to call me at 203-504-1063. Have a good day.

Operator: This does conclude today's conference, we do thank you for your participation. You may now disconnect.