Third Quarter Highlights - Total revenues of $165.7 million and
EBITDA(1) of $135.0 million - Net income of $33.5 million, or $0.42
per diluted common share - Adjusted net income(1) of $35.7 million,
or $0.45 per diluted common share - Adjusted net income plus
depreciation and amortization(1) of $92.8 million, or $1.17 per
diluted common share - 100% weighted average fleet utilization -
Purchase and lease back commitment with Avianca for a second
A330-200 delivering in December 2009 STAMFORD, Conn.., Nov. 6
/PRNewswire-FirstCall/ -- Aircastle Limited (the "Company" or
"Aircastle") (NYSE:AYR) reported third quarter net income of $33.5
million, or $0.42 per diluted common share and adjusted net income
of $35.7 million, or $0.45 per diluted common share. Aircastle CEO
Ron Wainshal commented, "Operating performance during the third
quarter was excellent with utilization at almost 100 percent and
with unrestricted cash building to $132 million at September 30th.
Combined with our strong operating performance and access to
capital, we are poised for growth and are actively pursuing new
opportunities." Third quarter total revenues were $165.7 million,
an increase of $21.3 million from the third quarter 2008. The
increase was driven by higher maintenance revenue of $25.9 million
and $9.4 million of lease termination revenue over the same period
a year ago. These increases were offset by higher lease incentive
amortization of $5.8 million and a reduction in lease rental
revenue of $8.3 million. Lease rental revenue of $128.3 million
declined by $8.3 million from the third quarter 2008. An increase
in revenues of $4.5 million related to aircraft acquisitions was
offset by a decrease of $5.8 million related to aircraft sold, $2.2
million due to aircraft in freighter conversion and $4.1 million
related to lease transitions and extensions. EBITDA was $135.0
million, up $5.8 million from the third quarter of 2008 due
primarily to higher maintenance and lease termination revenue
totaling $35.3 million, offset by lower lease rental revenue of
$8.3 million, higher maintenance and other costs of $3.9 million
due mainly to transitions, and $18.2 million of impairment charges.
Adjusted net income plus depreciation and amortization was $92.8
million, an increase of $7.5 million compared to the third quarter
of 2008. The year over year change was driven primarily by higher
maintenance and lease termination revenue totaling $35.3 million,
and lower adjusted interest, net of $2.2 million, offset by lower
lease rental revenue of $8.3 million, higher maintenance and other
costs of $3.9 million, and $18.2 million of impairment charges.
Adjusted net income was $35.7 million, up $0.7 million compared to
the third quarter of 2008. The year over year change reflects
higher maintenance and lease termination revenue totaling $35.3
million, and lower adjusted interest, net of $2.2 million, offset
by lower lease rental revenue of $8.3 million, higher lease
incentive amortization of $5.8 million, higher maintenance and
other costs of $3.9 million, and $18.2 million of impairment
charges. In connection with the sale and early return of aircraft
in the third quarter of 2009, Aircastle's results included
maintenance revenue of $11.6 million and lease termination revenue
of $9.4 million, which were offset by $18.2 million in aircraft
impairment charges and a gain on the sale of the aircraft of $0.2
million, resulting in incremental pre-tax income of $3.0 million.
(1) Refer to the selected financial information accompanying this
press release for a reconciliation of GAAP to Non-GAAP numbers.
Aviation Assets As of September 30, 2009, Aircastle owned 128
aircraft having a net book value of $3.8 billion. Owned Aircraft as
of September 30, 2009(A) ----------- 107 Passenger Aircraft 70% 21
Freighter Aircraft(B) 30% Number of Lessees 60 Number of Countries
34 Weighted Average Remaining Lease Term (years) (B) 4.9 Percentage
of Aircraft Leased Outside U.S. 90% Percentage of "Latest
Generation" Aircraft 88% Weighted Average Fleet Utilization during
Q3 2009 100% (A) -Percentages calculated using net book value. (B)
-Four Boeing Model 737-400 aircraft which will be converted to
freighter configuration are included as "Freighter" aircraft; the
remaining lease terms for these aircraft, for which we have
executed leases post-conversion, are measured on the ten-year terms
of the post-conversion leases. Aircastle entered into a commitment
with Aerovias del Continente Americano ("Avianca") to purchase and
lease back a new A330-200 delivering in December 2009. This new
transaction would represent an advancement of one of Aircastle's
new A330 aircraft order positions. We anticipate this transaction
will be funded with ECA-supported financing along terms similar to
the transaction we completed in May 2009. Conference Call In
connection with this earnings release, management will host an
earnings conference call on Friday, November 6, 2009 at 11:00 A.M.
Eastern time. All interested parties are welcome to participate on
the live call. The conference call can be accessed by dialing (866)
510-4578 (from within the U.S.) or (706) 634-9537 (from outside of
the U.S.) ten minutes prior to the scheduled start and referencing
the "Aircastle Third Quarter Earnings Call." A webcast of the
conference call will be available to the public on a listen-only
basis at http://www.aircastle.com/. Please allow extra time prior
to the call to visit the site and download the necessary software
required to listen to the internet broadcast. A replay of the
webcast will be available for three months following the call. For
those who are not available to listen to the live call, a replay
will be available until 11:59 P.M. Eastern time on Friday, November
13, 2009 by dialing (800) 642-1687 (from within the U.S.) or (706)
645-9291 (from outside of the U.S.); please reference passcode
"36526839." About Aircastle Limited Aircastle Limited is a global
company that acquires, leases and sells high-utility commercial jet
aircraft to airlines throughout the world. As of September 30, 2009
Aircastle's aircraft portfolio consisted of 128 aircraft and had 60
lessees located in 34 countries. Safe Harbor Certain items in this
press release and other information we provide from time to time,
may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 including, but not
necessarily limited to, statements relating to our ability to
acquire, sell and lease aircraft, raise capital, pay dividends, and
increase revenues, earnings and EBITDA and the global aviation
industry and aircraft leasing sector. Words such as "anticipates,"
"expects," "intends," "plans," "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 management's current expectations and beliefs and are
subject to a number of factors that could lead to actual results
materially different from those described in the forward-looking
statements; Aircastle Limited can give no assurance that its
expectations will be attained. Accordingly, you should not place
undue reliance on any forward-looking statements contained in this
press release. Factors that could have a material adverse effect on
our operations and future prospects or that could cause actual
results to differ materially from Aircastle Limited's expectations
include, but are not limited to, prolonged capital markets
disruption and volatility, which may adversely affect our continued
ability to obtain additional capital to finance our working capital
needs, our pre-delivery payment obligations and other aircraft
acquisition commitments, our ability to extend or replace our
existing financings, and the demand for and value of aircraft; our
exposure to increased bank and counterparty risk caused by credit
and capital markets disruptions; general economic conditions and
business conditions affecting demand for aircraft and lease rates;
our continued ability to obtain favorable tax treatment in Bermuda,
Ireland and other jurisdictions; our ability to pay dividends; high
or volatile fuel prices, lack of access to capital, reduced load
factors and yields and other factors affecting the creditworthiness
of our airline customers and their ability to continue to perform
their obligations under our leases; termination payments on our
interest rate hedges; and other risks detailed from time to time in
Aircastle Limited's filings with the SEC, including "Risk Factors"
as previously disclosed in Aircastle's 2008 Annual Report on Form
10-K, and in our other filings with the SEC, press releases and
other communications. 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 press release. Aircastle Limited
expressly disclaims any obligation to release publicly any updates
or revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or
change in events, conditions or circumstances on which any
statement is based. Aircastle Limited and Subsidiaries Consolidated
Balance Sheets (Dollars in thousands, except share data) Dec. 31,
Sept. 30, 2008 2009 ---- ---- (Unaudited) ASSETS Cash and cash
equivalents $80,947 $132,408 Accounts receivable 3,161 4,065 Debt
investments 14,349 7,136 Restricted cash and cash equivalents
182,623 218,079 Restricted liquidity facility collateral - 81,000
Flight equipment held for lease, net of accumulated depreciation of
$371,591 and $521,251 3,837,543 3,767,314 Aircraft purchase
deposits and progress payments 68,923 109,454 Leasehold
improvements, furnishings and equipment, net of accumulated
depreciation of $1,999 and $2,349 1,174 907 Other assets 62,852
70,519 ------ ------ Total assets $4,251,572 $4,390,882 ==========
========== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES
Borrowings from securitizations and term debt financings $2,476,296
$2,435,593 Accounts payable, accrued expenses and other liabilities
60,789 59,205 Dividends payable 7,862 7,923 Lease rentals received
in advance 28,463 27,758 Liquidity facility - 81,000 Security
deposits 65,307 73,131 Maintenance payments 224,288 250,018 Fair
value of derivative liabilities 276,401 205,549 ------- -------
Total liabilities 3,139,406 3,140,177 --------- ---------
Commitments and Contingencies SHAREHOLDERS' EQUITY Preference
shares, $.01 par value, 50,000,000 shares authorized, no shares
issued and outstanding - - Common shares, $.01 par value,
250,000,000 shares authorized, 78,620,320 shares issued and
outstanding at December 31, 2008; and 79,234,663 shares issued and
outstanding at September 30, 2009 786 792 Additional paid-in
capital 1,474,455 1,478,275 Retained earnings (deficit) (473)
55,256 Accumulated other comprehensive loss (362,602) (283,618)
--------- --------- Total shareholders' equity 1,112,166 1,250,705
--------- --------- Total liabilities and shareholders' equity
$4,251,572 $4,390,882 ========== ========== Aircastle Limited and
Subsidiaries Consolidated Statements of Income (Dollars in
thousands, except per share amounts) (Unaudited) Three Months Ended
Nine Months Ended September 30, September 30, -------------
------------- 2008 2009 2008 2009 ---- ---- ---- ---- Revenues:
Lease rental revenue $136,578 $128,283 $405,206 $383,683
Amortization of net lease discounts and lease incentives 1,781
(3,992) 6,929 (7,919) Maintenance revenue 5,433 31,376 9,575 47,616
----- ------ ----- ------ Total lease rentals 143,792 155,667
421,710 423,380 Interest income 628 556 2,533 1,783 Other revenue
34 9,517 562 9,628 -- ----- --- ----- Total revenues 144,454
165,740 424,805 434,791 ------- ------- ------- ------- Expenses:
Depreciation 52,020 53,130 151,840 156,379 Interest, net 54,112
43,032 146,442 127,925 Selling, general and administrative
(including non-cash share based payment expense of $1,659 and
$1,742 for the three months ended, and $4,872 and $5,129 for the
nine months ended September 30, 2008 and 2009, respectively) 11,641
11,074 34,484 33,291 Impairment of aircraft - 18,211 - 18,211
Maintenance and other costs 891 4,836 2,133 15,114 --- ----- -----
------ Total expenses 118,664 130,283 334,899 350,920 -------
------- ------- ------- Other income (expense): Gain on sale of
aircraft 772 162 5,898 162 Other (1,673) (738) (590) 855 -------
----- ----- --- Total other income (expense) (901) (576) 5,308
1,017 ----- ----- ----- ----- Income from continuing operations
before income taxes 24,889 34,881 95,214 84,888 Income tax
provision 1,315 1,423 4,662 5,388 ----- ----- ----- ----- Net
income $23,574 $33,458 $90,552 $79,500 ======= ======= =======
======= Earnings per common share - Basic $0.30 $0.42 $1.15 $1.00
===== ===== ===== ===== Earnings per common share - Diluted $0.30
$0.42 $1.15 $1.00 ===== ===== ===== ===== Dividends declared per
share $0.25 $0.10 $0.75 $0.30 ===== ===== ===== ===== Aircastle
Limited and Subsidiaries Consolidated Statements of Cash Flows
(Dollars in thousands) (Unaudited) Nine Months Ended September 30,
------------- 2008 2009 ---- ---- Cash flows from operating
activities: Net income $90,552 $79,500 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
151,840 156,379 Amortization of deferred financing costs 9,773
8,808 Amortization of net lease discounts and lease incentives
(6,929) 7,919 Deferred income taxes 3,344 4,560 Accretion of
purchase discounts on debt investments (419) (430) Non-cash share
based payment expense 4,872 5,129 Cash flow hedges reclassified
into earnings 10,740 13,690 Ineffective portion of cash flow hedges
7,977 (2,874) Gain on sale of flight equipment (5,898) (162)
Security deposits and maintenance payments included in earnings
(9,171) (36,982) Loss on sale of investments 245 131 Impairment of
aircraft - 18,211 Other 943 (556) Changes in certain assets and
liabilities: Accounts receivable 903 (909) Restricted cash and cash
equivalents (47,923) (35,456) Other assets 1,797 (1,975) Accounts
payable, accrued expenses and other liabilities 3,911 (8,397)
Payable to affiliates (200) - Lease rentals received in advance
(2,796) (537) ------- ----- Net cash provided by operating
activities 213,561 206,049 ------- ------- Cash flows from
investing activities: Acquisition and improvement of flight
equipment and lease incentives (228,934) (124,082) Aircraft
purchase deposits and progress payments, net of returned deposits
(2,154) (41,912) Proceeds from sale of flight equipment 48,882
10,601 Restricted cash from disposition of flight equipment
(12,294) - Proceeds from sale of debt investments 65,335 5,423
Principal repayments on debt investments 11,674 3,787 Collateral
call payments on derivatives and repurchase agreements (349,123) -
Collateral call receipts on derivatives and repurchase agreements
375,066 - Leasehold improvements, furnishings and equipment (365)
(82) ----- ---- Net cash used in investing activities (91,913)
(146,265) -------- --------- Cash flows from financing activities:
Issuance, net of repurchases, of common shares to directors and
employees (1,263) (247) Proceeds from term debt financings 992,715
70,916 Securitization and term debt financing repayments (85,055)
(111,619) Restricted cash and cash equivalents related to
unreleased term debt financing borrowings (87,462) - Deferred
financing costs (23,346) (3,588) Credit facility borrowings 482,723
- Credit facility repayments (1,167,578) - Restricted secured
liquidity facility collateral - (81,000) Secured liquidity facility
collateral - 81,000 Principal repayments on repurchase agreements
(67,744) - Security deposits and maintenance payments received
83,966 96,162 Security deposits and maintenance payments returned
(22,493) (33,479) Payments for terminated cash flow hedges (68,332)
(2,758) Dividends paid (94,291) (23,710) -------- -------- Net cash
(used in) provided by financing activities (58,160) (8,323)
-------- ------- Net increase in cash and cash equivalents 63,488
51,461 Cash and cash equivalents at beginning of period 13,546
80,947 ------ ------ Cash and cash equivalents at end of period
$77,034 $132,408 ======= ======== Aircastle Limited and
Subsidiaries Supplemental Financial Information (Amount in
thousands, except per share amounts) (Unaudited) Three Months Ended
Nine Months Ended September 30, September 30, -------------
------------- 2008 2009 2008 2009 ---- ---- ---- ---- Revenues
$144,454 $165,740 $424,805 $434,791 EBITDA $129,240 $135,035
$386,567 $377,111 Adjusted net income $35,019 $35,668 $104,229
$83,677 Adjusted net income allocable to common shares $34,602
$35,060 $103,056 $82,295 Per common share - Basic $0.44 $0.45 $1.33
$1.06 Per common share - Diluted $0.44 $0.45 $1.33 $1.06 Adjusted
net income plus depreciation and amortization $85,258 $92,790
$249,140 $247,975 Adjusted net income plus depreciation and
amortization allocable to common shares $84,242 $91,208 $246,336
$243,880 Per common share - Basic $1.08 $1.17 $3.17 $3.13 Per
common share - Diluted $1.08 $1.17 $3.17 $3.13 Basic common shares
outstanding 77,768 78,013 77,744 77,977 Diluted common shares
outstanding 77,768 78,013 77,744 77,977 Refer to the selected
information accompanying this press release for a reconciliation of
GAAP to Non-GAAP information. Aircastle Limited and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures EBITDA Reconciliation
(Dollars in thousands) (Unaudited) Three Months Ended Nine Months
Ended September 30, September 30, ------------- ------------- 2008
2009 2008 2009 ---- ---- ---- ---- Net income $23,574 $33,458
$90,552 $79,500 Depreciation 52,020 53,130 151,840 156,379
Amortization of net lease discounts and lease incentives (1,781)
3,992 (6,929) 7,919 Interest, net 54,112 43,032 146,442 127,925
Income tax provision 1,315 1,423 4,662 5,388 ----- ----- -----
----- EBITDA $129,240 $135,035 $386,567 $377,111 ======== ========
======== ======== We define EBITDA as income from continuing
operations before income taxes, interest expense, and depreciation
and amortization. We use EBITDA to assess our consolidated
financial and operating performance, and we believe this non-GAAP
measure is helpful in identifying trends in our performance. Using
EBITDA assists us in comparing our operating performance on a
consistent basis by removing the impact of our capital structure
(primarily interest charges on our outstanding debt) and asset base
(primarily depreciation and amortization) from our operating
results. Aircastle Limited and Subsidiaries Reconciliation of GAAP
to Non-GAAP Measures Adjusted Net Income plus Depreciation
Reconciliation (Dollars in thousands) (Unaudited) Three Months
Ended Nine Months Ended September 30, September 30, -------------
------------- 2008 2009 2008 2009 ---- ---- ---- ---- Net income
$23,574 $33,458 $90,552 $79,500 Ineffective portion and termination
of cash flow hedges(1) 10,545 1,633 17,575 4,764 Mark to market
adjustment on undesignated derivatives(2) 1,672 608 942 (556)
Write-off of deferred financing fees - - 813 - Gain on sale of
aircraft (772) (162) (5,898) (162) Loss on sale of debt
investments(2) - 131 245 131 --- --- --- --- Adjusted net income
$35,019 $35,668 $104,229 $83,677 Depreciation 52,020 53,130 151,840
156,379 Amortization of net lease discounts and lease incentives
(1,781) 3,992 (6,929) 7,919 ------ ----- ------ ----- Adjusted net
income plus depreciation and amortization $85,258 $92,790 $249,140
$247,975 ======= ======= ======== ======== (1) Included in
Interest, net (2) Included in Other income (expense) We adjust net
income for ineffective portion and termination of cash flow hedges,
write-off of deferred financing fees, mark to market and
termination of interest rate swaps, loss on sale of debt
investments and gain on sale of flight equipment. We use adjusted
net income to assess our consolidated financial and operating
performance, and we believe this non- GAAP measure is helpful in
identifying long-term trends in our performance net of
non-recurring items. We use adjusted net income plus depreciation
and amortization to assess our consolidated financial and operating
performance, and we believe this non-GAAP measure is helpful in
identifying trends in our performance on an operating cash flow
basis after taking into account interest expense on our outstanding
indebtedness. Aircastle Limited and Subsidiaries Reconciliation of
GAAP to Non-GAAP Measures Reconciliation of Net Income Allocable to
Common Shares (in thousands) (Unaudited) Three Months Ended Nine
Months Ended September 30, 2009 September 30, 2009
------------------ ------------------ Shares Percent(2) Shares
Percent(2) Weighted average shares ----------------------- Common
shares outstanding - Basic 78,013 98.30% 77,977 98.35% Unvested
restricted common shares outstanding 1,353 1.70% 1,309 1.65% -----
----- ----- ----- Total weighted Average shares outstanding 79,366
100.00% 79,286 100.00% ====== ====== ====== ======= Common shares
outstanding - Basic 78,013 100.00% 77,977 100.00% Effect of
dilutive shares(1) - - - - ------ ------ ------ ------ Common
shares outstanding - Diluted 78,013 100.00% 77,977 100.00% ======
====== ====== ====== Net income allocation ---------------------
Net income $33,458 100.00% $79,500 100.00% Distributed and
Undistributed earnings allocated to unvested restricted shares
(570) (1.70)% (1,313) (1.65)% ----- ----- ------ ---- Earnings
available to common shares $32,888 98.30% $78,187 98.35% =======
===== ======= ===== Adjusted net income allocation
------------------- Adjusted net income $35,668 100.00% $83,677
100.00% Amounts allocated to unvested restricted shares (608)
(1.70)% (1,382) (1.65)% ----- ----- ------ ----- Amounts allocated
to common shares $35,060 98.30% $82,295 98.35% ======= =====
======= ===== Adjusted net income plus depreciation and
amortization allocation ------------------------ Adjusted net
income plus depreciation and amortization $92,790 100.00% $247,975
100.00% Amounts allocated to unvested restricted shares (1,582)
(1.70)% (4,095) (1.65)% ------- ----- ------ ---- Amounts allocated
to common shares $91,208 98.30% $243,880 98.35% ======= =====
======== ===== (1) The Company had no dilutive common share
equivalents for the periods presented. (2) Percentages rounded to
two decimal places. Aircastle Limited and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures Reconciliation of Net
Income Allocable to Common Shares (in thousands) (Unaudited) Three
Months Ended Nine Months Ended September 30, 2008 September 30,
2008 ------------------ ------------------ Shares Percent(2) Shares
Percent(2) Weighted average shares ---------------- Common shares
outstanding - Basic 77,768 98.81% 77,744 98.87% Unvested restricted
common shares outstanding 938 1.19% 885 1.13% --- ----- --- ----
Total weighted average shares outstanding 78,706 100.00% 78,629
100.00% ====== ====== ====== ====== Common shares outstanding -
Basic 77,768 100.00% 77,744 100.00% Effect of dilutive shares(1) -
- - - ------ ------ ------ ------ Common shares outstanding -
Diluted 77,768 100.00% 77,744 100.00% ====== ====== ====== ==== Net
income allocation ----------- Net income $23,574 100.00% $90,552
100.00% Distributed and undistributed earnings allocated to
unvested restricted shares (281) (1.19)% (1,019) (1.13)% -----
----- ------ ----- Earnings Available to common shares $23,293
98.81% $89,533 98.87% ======= ===== ======= ===== Adjusted net
income allocation ------------------- Adjusted net income $35,019
100.00% $104,229 100.00% Amounts allocated to unvested restricted
shares (417) (1.19)% (1,173) (1.13)% ----- ----- ------ -----
Amounts allocated to common shares $34,602 98.81% $103,056 98.87%
======= ===== ======== ==== Adjusted net income plus depreciation
and amortization allocation ------------------------ Adjusted net
income plus depreciation and amortization $85,258 100.00% $249,140
100.00% Amounts allocated to unvested restricted shares (1,016)
(1.19)% (2,804) (1.13)% ------ ----- ------ ---- Amounts allocated
to common shares 84,242 98.81% $246,336 98.87% ====== =====
======== ===== (1) The Company had no dilutive common share
equivalents for the periods presented. (2) Percentages rounded to
two decimal places. DATASOURCE: Aircastle Limited CONTACT: Julia
Hallisey, Investor Relations of Aircastle Limited, +1-203-504-1063
Web Site: http://www.aircastle.com/
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