Aircastle Announces Fourth Quarter and Full Year 2012 Results

Thu Feb 21, 2013 12:30pm GMT

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Board Declares First Quarter 2013 Dividend of $0.165 Per Common Share
   

STAMFORD, Conn.,  Feb. 21, 2013  /PRNewswire/ -- Aircastle Limited (the
"Company" or "Aircastle") (NYSE: AYR) reported fourth quarter 2012 net income of
 $29.8 million, or  $0.43  per diluted common share and adjusted net income of 
$36.4 million, or  $0.52  per diluted common share.  Net income for the year
ended  December 31, 2012  was  $32.9 million, or  $0.46  per diluted common
share, and adjusted net income was  $57.0 million, or  $0.80  per diluted common
share.  The fourth quarter results included total revenues of  $176.6 million,
an increase of 13%, versus  $156.9 million  in the fourth quarter of 2011.  For
the full year 2012 total revenues were  $686.6 million, up 13% versus  $605.2
million  in 2011.   

Commenting on the results,  Ron Wainshal, Aircastle's CEO, stated: "Aircastle
continued to execute on its value-oriented growth strategy in 2012, finishing
the year with solid top line growth thanks to  $843 million  of investments and
99% portfolio utilization.  We also continued to transform our balance sheet by
building the unencumbered asset base to over  $2 billion  in aircraft and more
than  $600 million  in unrestricted cash while pushing out the nearest debt
maturity to 2017.  We demonstrated our strong standing in the capital markets,
where we raised  $1.3 billion  in unsecured debt during the year, including a 
$500 million  issue in late November, which provides us with attractive growth
capital for 2013.  Looking ahead, we believe the market for new acquisitions
looks good and we will continue pursuing investment opportunities in a
disciplined way."

Michael Inglese, Aircastle's CFO, commented: "In addition to pursuing accretive
new investments, we remain committed to returning capital to our shareholders. 
To that end, we repurchased  $20 million  of common shares under our current 
$50 million  program since October, bringing the total to  $138.5 million 
repurchased since the beginning of 2011, at an average price of  $11.87  per
share.  In addition, we increased our dividend 10% during the year for a
cumulative increase of 65% over the past eight quarters, reflecting the
Company's increased earnings base."   

Fourth Quarter Results



Lease rental revenue for the fourth quarter was  $158.1 million, up  $8.2
million  or 6% year over year, due primarily to the impact of new aircraft
acquisitions of  $25.0 million, partially offset by lower revenue due to
aircraft sales of  $5.2 million  and the year over year impact of lease
extensions, transitions and terminations of  $11.6 million.

Total revenues for the fourth quarter were  $176.6 million, an increase of 
$19.7 million, or 13% from the previous year, reflecting higher lease rental
revenue of  $8.2 million, higher maintenance revenue of  $4.2 million  from a
year over year increase in transitions, and an increase in other revenues of 
$8.0 million  reflecting our purchase of a secured loan during the first quarter
of 2012 and revenue from finance leases, primarily from acquisitions in 2012.   


Adjusted EBITDA for the fourth quarter was  $172.3 million, up  $10.5 million,
or 6% from the fourth quarter of 2011, due primarily to higher lease rental,
maintenance and other revenue totaling  $20.5 million, partially offset by a 
$7.4 million  year-over year decline in gains from the sale of aircraft.

The fourth quarter 2012 results include aircraft impairment charges totaling 
$7.7 million  and primarily reflects the impairment of one A320-200 that came
off lease during the quarter for  $6.7 million.  These charges were largely
offset by end of lease maintenance revenue related to the impaired aircraft
totaling  $7.5 million.     

Adjusted net income for the quarter was  $36.4 million, down  $6.0 million  year
over year.  The change reflects higher net revenues of  $19.7 million  that was
offset by higher aircraft impairment charges of  $7.7 million, lower gains from
the sale of aircraft of  $7.4 million, higher depreciation of  $6.1 million,
higher selling, general and administrative costs of  $2.1 million, and higher
adjusted interest expense of  $1.9 million.

Full Year Results



Lease rental revenue for the full year was  $623.5 million, up  $43.3 million,
or 7% year over year, reflecting the net impact of aircraft acquisitions made
during 2012 and 2011 totaling  $106.1 million, offset by lower lease rentals due
to aircraft sales and disposals of  $28.6 million  and the impact of
transitions, extensions and terminations totaling  $34.2 million.

Total revenues for 2012 were  $686.6 million, an increase of  $81.4 million, up
13% from the previous year.  The increase reflects higher lease rental revenue
of  $43.3 million, higher maintenance revenue of  $16.4 million, lower
amortization of net lease discounts and lease incentives of  $3.6 million,
higher revenues resulting from interest on our debt investments and finance
leases of  $12.2 million, and an increase of  $5.9 million  in early termination
fees paid by lessees during 2012 versus 2011.   

During the year we recorded maintenance revenue from 13 scheduled lease
terminations of  $18.4 million  versus  $21.7 million  for nine scheduled lease
terminations in 2011.  In addition, we recorded  $34.9 million  of maintenance
revenue from 13 aircraft returned early in 2012 versus  $15.3 million  from
seven aircraft returned early in 2011.  We recorded total non-cash impairment
charges of  $96.5 million  and  $6.4 million  in 2012 and 2011, respectively.   

During 2012 we impaired 18 aircraft, and the total  $96.5 million  non-cash
charge was partially offset by maintenance and lease incentive revenue
associated with seven of these aircraft, in the amount of  $27.7 million.   

Adjusted EBITDA for the full year was  $647.6 million, up 7% from  $607.9
million  in 2011, due primarily to higher lease rental, maintenance and other
revenues totaling  $77.8 million, partially offset by a  $33.3 million  decrease
in gains from aircraft sold during 2012.   

Adjusted net income for the full year was  $57.0 million, down  $88.0 million 
year over year.  The change reflects higher revenues of  $81.4 million,
primarily offset by higher aircraft impairment charges of  $90.0 million, lower
gains from the sale of aircraft of  $33.3 million, higher depreciation of  $27.8
million, and higher adjusted interest expense of  $13.6 million.

Aviation Assets

During 2012, we acquired 24 aircraft investments for  $843 million.  We also
sold or disposed of eight aircraft, which resulted in a pre-tax gain of
approximately  $5.7 million  for the year.

As of  December 31, 2012, Aircastle owned 159 aircraft having a net book value
of  $4.8 billion.

                                                     Owned                                                                 Owned                                                                 Owned                     
                                                     
Aircraft as of                                                       
Aircraft as of                                                       
Aircraft as of           
                                                     
December 31,                                                         
December 31,                                                         
December 31,             
                                                     
2010(1)                                                              
2011(1)                                                              
2012(1)                  
 Flight Equipment Held for Lease ($ mils.)           $                4,066                                              $                4,388                                              $       4,783           
 Unencumbered Flight Eqt. included in Flight Eqt.    $                595                                                $                677                                                $       2,092           
   Held for Lease ($ mils.)                                                                                                                                                                                          
 Number of Aircraft                                  136                                                                  144                                                                  159                      
 Number of Unencumbered Aircraft                     18                                                                   27                                                                   72                       
 Passenger Aircraft (% of NBV)                       67%                                                                  69%                                                                  71%                      
 Freighter Aircraft (% of NBV)                       33%                                                                  31%                                                                  29%                      
 Weighted Average Fleet Age -                        11.0                                                                 10.9                                                                 10.7                     
   Combined (years)  (2)                                                                                                                                                                                                
 Weighted Average Remaining Combined                 4.7                                                                  4.9                                                                  5.0                      
   Lease Term (years)(3)                                                                                                                                                                                                
 Weighted Average Fleet Utilization for the          99%                                                                  99%                                                                  99%                      
   year ended(4)                                                                                                                                                                                                        
 Portfolio Yield for the year ended(5)               14%                                                                  14%                                                                  14%                      
                                                                                                                                                                                                                           
 (1) Calculated using net book value of flight equipment held for lease and net investment in finance leases at period end.                                                                          
 
(2) Weighted average age (years) by net book value.                                                                                                                                                
 (3) Weighted average remaining lease term (years) by net book value.                                                                                                                                
 (4) Aircraft on-lease days as a percent of total days in period weighted by net book value.                                                                                                         
 (5) Lease rental revenue for the period as a percent of the average net book value of flight equipment held for lease for the period.                                                               


Financing Update

During 2012 we raised approximately  $1.6 billion  of total debt financing,
including more than  $730 million  during the fourth quarter.   

In  December 2012, we closed a  $150 million  unsecured revolving credit
facility with Citibank, N.A., Goldman Sachs Bank  USA, J.P. Morgan Chase Bank
N.A. and an affiliate of RBC Capital Markets, which has a three-year term
scheduled to expire in December 2015.  This facility is currently undrawn.

In late November of 2012, Aircastle issued  $500 million  aggregate principal
amount of unsecured 6.25% Senior Notes due 2019.  The proceeds will be used for
general corporate purposes, including the purchase of aviation assets.  The
notes were issued at par value.

In  April 2012, we closed an  $800 million  unsecured notes offering, consisting
of  $500 million  of 6.75% senior notes due 2017 and  $300 million  of 7.63%
senior notes due in 2020, both of which were issued at par.  Aircastle used the
net proceeds from the offering to repay outstanding indebtedness under its Term
Financing No. 1 and the termination of associated interest rate derivatives,
with the balance used for general corporate purposes, including the purchase of
aviation assets.

During 2012, we entered into two 12 year term loans which are supported by
guarantees from Compagnie Francaise d'Assurance pour le Commerce Exterieur, or
COFACE, for the financing of two new Airbus Model A330-200 aircraft. The
borrowings under these financings at December 31, 2012 had a weighted average
rate of interest equal to 3.22%.

Dividends and Share Repurchase Program

On  February 18, 2013  Aircastle's Board of Directors declared a first quarter
2013 cash dividend on its common shares of  $0.165  per share, payable on  March
15, 2013  to shareholders of record on  March 4, 2013.  This is our 27th 
consecutive dividend.  During 2012, Aircastle increased the dividend to common
shareholders to the current quarterly rate of  $0.165  per share, a 10% increase
over the quarterly rate at the end of 2011.   

Also during 2012, the Company's Board of Directors authorized the repurchase of
up to a total of  $78.5 million  of the Company's common shares.  As of 
February 20, 2013, under this authorization we repurchased 4.1 million shares at
a total cost of  $48.5 million, including commissions.  We have  $30 million 
remaining under the current authorization.   

Conference Call

In connection with this earnings release, management will host an earnings
conference call on  Thursday, February 21, 2013  at  10:00 A.M. Eastern time. 
All interested parties are welcome to participate on the live call.  The
conference call can be accessed by dialing (800) 946-0709 (from within the U.S.
and  Canada) or (719) 457-2653 (from outside of the U.S. and  Canada) ten
minutes prior to the scheduled start and referencing the passcode "5347970".

A simultaneous webcast of the conference call will be available to the public on
a listen-only basis at  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 one month
following the call.  In addition to this earnings release an accompanying power
point presentation has been posted to the Investor Relations section of
Aircastle's website.

For those who are not available to listen to the live call, a replay will be
available until  1:00 P.M. Eastern time  on  Saturday, March 23, 2013  by
dialing (888) 203-1112 (from within the U.S. and  Canada) or (719) 457-0820
(from outside of the U.S. and  Canada); please reference passcode "5347970."



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 
December 31, 2012, Aircastle's aircraft portfolio consisted of 159 aircraft on
lease with 69 customers located in 36 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, lease or
finance aircraft, raise capital, pay dividends, and increase revenues, earnings,
EBITDA, Adjusted EBITDA and Adjusted Net Income 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 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 report. 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
expectations include, but are not limited to, capital markets disruption or
volatility which could adversely affect our continued ability to obtain
additional capital to finance new investments or our working capital needs;
government fiscal or tax policies, general economic and business conditions or
other factors affecting demand for aircraft or aircraft values 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/or reduced yields,
operational disruptions caused by political unrest in  North Africa, the  Middle
East  or elsewhere, 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's filings with the Securities and
Exchange Commission ("SEC"), including as described in Item 1A. "Risk Factors"
and elsewhere in this 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 report. Aircastle 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.


 

1Refer to Supplemental Financial Information accompanying this press release for
a reconciliation of GAAP to non-GAAP numbers.

 

Contact:  
Frank Constantinople, SVP Investor Relations
Tel: +1-203-504-1063
fconstantinople@aircastle.com

The IGB Group
Leon Berman
Tel: +1-212-477-8438
lberman@igbir.com

 Aircastle Limited and Subsidiaries                                                                                                                                                                                                                 
 Consolidated Balance Sheets                                                                                                                                                                                                                        
 (Dollars in thousands, except share data)                                                                                                                                                                                                          
                                                                                                                                                                                                                                                   
                                                                                                                                                                                                 December 31,                                      
                                                                                                                                                                                                 2011                      2012                  
 ASSETS                                                                                                                                                                                                                                          
 Cash and cash equivalents                                                                                                                                                                       $     295,522            $     618,217        
 Accounts receivable                                                                                                                                                                             3,646                     5,625                 
 Restricted cash and cash equivalents                                                                                                                                                            247,452                   111,942               
 Restricted liquidity facility collateral                                                                                                                                                        110,000                   107,000               
 Flight equipment held for lease, net of accumulated depreciation of $981,932 and $1,305,064                                                                                                     4,387,986                 4,662,661             
 Net investment in finance leases                                                                                                                                                                -                         119,951               
 Aircraft purchase deposits and progress payments                                                                                                                                                89,806                    131                   
 Other assets                                                                                                                                                                                    90,047                    186,633               
 Total assets                                                                                                                                                                                    $     5,224,459          $     5,812,160      
                                                                                                                                                                                                                                                 
 LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                                                                                            
 LIABILITIES                                                                                                                                                                                                                                     
 Borrowings from secured financings (including borrowings of ACS Ireland VIEs of $295,952 and $207,926, respectively)                                                                            $     2,535,759          $     1,848,034      
 Borrowings from unsecured financings                                                                                                                                                            450,757                   1,750,642             
 Accounts payable, accrued expenses and other liabilities                                                                                                                                        105,432                   108,593               
 Lease rentals received in advance                                                                                                                                                               46,105                    53,189                
 Liquidity facility                                                                                                                                                                              110,000                   107,000               
 Security deposits                                                                                                                                                                               83,037                    87,707                
 Maintenance payments                                                                                                                                                                            347,122                   379,391               
 Fair value of derivative liabilities                                                                                                                                                            141,639                   61,978                
 Total liabilities                                                                                                                                                                               3,819,851                 4,396,534             
                                                                                                                                                                                                                                                 
 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, 72,258,472 shares issued and outstanding at December 31, 2011; and 68,639,729 shares issued and outstanding at December 31, 2012  723                       686                   
 Additional paid-in capital                                                                                                                                                                      1,400,090                 1,360,555             
 Retained earnings                                                                                                                                                                               191,476                   180,675               
 Accumulated other comprehensive loss                                                                                                                                                            (187,681)                 (126,290)             
 Total shareholders' equity                                                                                                                                                                      1,404,608                 1,415,626             
 Total liabilities and shareholders' equity                                                                                                                                                      $     5,224,459          $     5,812,160      


 Aircastle Limited and Subsidiaries                                                                                                                                                                                                                                                                                                 
 
Consolidated Statements of Operations                                                                                                                                                                                                                                                                                             
 
(Dollars in thousands, except per share amounts)                                                                                                                                                                                                                                                                                  
 
(Unaudited)                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                  Three Months Ended                             Twelve Months Ended                             
                                                                                                                                                                                                                                  December 31,                                   December 31,                                    
                                                                                                                                                                                                                                  2011                    2012                 2011                      2012                
 Revenues:                                                                                                                                                                                                                                                                                                                   
 Lease rental revenue                                                                                                                                                                                                             $    149,848           $    158,090        $     580,209            $     623,503      
 Amortization of lease premiums, discounts and lease incentives                                                                                                                                                                   (5,604)                 (6,452)              (16,445)                  (12,844)            
 Maintenance revenue                                                                                                                                                                                                              11,948                  16,194               36,954                    53,320              
 Total lease rentals                                                                                                                                                                                                              156,192                 167,832              600,718                   663,979             
 Other revenue                                                                                                                                                                                                                    746                     8,778                4,479                     22,593              
 Total revenues                                                                                                                                                                                                                   156,938                 176,610              605,197                   686,572             
                                                                                                                                                                                                                                                                                                                             
 Expenses:                                                                                                                                                                                                                                                                                                                   
 Depreciation                                                                                                                                                                                                                     63,804                  69,896               242,103                   269,920             
 Interest, net                                                                                                                                                                                                                    53,766                  55,605               204,150                   222,808             
 Selling, general and administrative (including non-cash share based payment expense of $1,094 and $999 for the three months ended, and $5,786 and $4,232 for the twelve months ended December 31, 2011 and 2012,  respectively)  9,644                   11,754               45,953                    48,370              
 Impairment of Aircraft                                                                                                                                                                                                           -                       7,667                6,436                     96,454              
 Maintenance and other costs                                                                                                                                                                                                      2,333                   2,713                13,277                    14,656              
 Total expenses                                                                                                                                                                                                                   129,547                 147,635              511,919                   652,208             
                                                                                                                                                                                                                                                                                                                             
 Other income (expense):                                                                                                                                                                                                                                                                                                     
 Gain on sale of flight equipment                                                                                                                                                                                                 10,134                  2,685                39,092                    5,747               
 Other                                                                                                                                                                                                                            (115)                   (2)                  (268)                     602                 
 Total other income (expense)                                                                                                                                                                                                     10,019                  2,683                38,824                    6,349               
                                                                                                                                                                                                                                                                                                                             
 Income (loss) from continuing operations before income taxes                                                                                                                                                                     37,410                  31,658               132,102                   40,713              
 Income tax provision                                                                                                                                                                                                             1,791                   1,869                7,832                     7,845               
 Net income (loss)                                                                                                                                                                                                                $    35,619            $    29,789         $     124,270            $     32,868       
                                                                                                                                                                                                                                                                                                                             
 Earnings (loss) per common share - Basic:                                                                                                                                                                                                                                                                                   
 Net income (loss) per share                                                                                                                                                                                                      $    0.49              $    0.43           $     1.64               $     0.46         
                                                                                                                                                                                                                                                                                                                             
 Earnings (loss) per common share - Diluted:                                                                                                                                                                                                                                                                                 
 Net income (loss) per share                                                                                                                                                                                                      $    0.49              $    0.43           $     1.64               $     0.46         
                                                                                                                                                                                                                                                                                                                             
 Dividends declared per share                                                                                                                                                                                                     $    0.15              $    0.165          $     0.50               $     0.615        


 Aircastle Limited and Subsidiaries                                                                                     
 
Consolidated Statements of Cash Flows                                                                                 
 
(Dollars in thousands)                                                                                                
 
(Unaudited)                                                                                                           
                                                                                                                  
                                                                       Twelve Months Ended                             
                                                                       December 31,                                    
                                                                       2011                      2012                
 Cash flows from operating activities:                                                                               
 Net income                                                            $     124,270            $     32,868       
 Adjustments to reconcile net income to net cash provided by                                                         
          operating activities:                                                                                      
 Depreciation                                                          242,103                   269,920             
 Amortization of deferred financing costs                              15,271                    12,449              
 Amortization of net lease discounts and lease incentives              16,445                    12,844              
 Deferred income taxes                                                 5,615                     6,828               
 Non-cash share based payment expense                                  5,786                     4,232               
 Cash flow hedges reclassified into earnings                           23,078                    30,777              
 Ineffective portion of cash flow hedges                               (101)                     2,893               
 Security deposits and maintenance payments included in earnings       (35,500)                  (54,180)            
 Gain on sale of flight equipment                                      (39,092)                  (5,747)             
 Impairment of aircraft                                                6,436                     96,454              
 Other                                                                 742                       (2,218)             
 Changes in certain assets and liabilities:                                                                          
 Accounts receivable                                                   (4,818)                   (2,530)             
 Restricted cash and cash equivalents related to operating             4,418                     -                   
                    activities                                                                                       
 Other assets                                                          (2,675)                   919                 
 Accounts payable, accrued expenses and other liabilities              (1,848)                   17,732              
 Lease rentals received in advance                                     (753)                     4,036               
 Net cash provided by operating activities                             359,377                   427,277             
 Cash flows from investing activities:                                                                               
 Acquisition and improvement of flight equipment and lease incentives  (776,750)                 (693,227)           
 Proceeds from sale of flight equipment                                489,196                   61,489              
 Restricted cash and cash equivalents related to sale of flight        (35,762)                  35,762              
             equipment                                                                                               
 Aircraft purchase deposits and progress payments                      (122,069)                 (20,553)            
 Net investment in finance leases                                      -                         (91,500)            
 Collections on finance leases                                         -                         3,852               
 Purchase of debt investment                                           -                         (43,626)            
 Principal repayments on debt investment                               -                         6,585               
 Other                                                                 (35)                      (691)               
 Net cash used in investing activities                                 (445,420)                 (741,909)           
 Cash flows from financing activities:                                                                               
 Repurchase of shares                                                  (91,610)                  (44,180)            
 Proceeds from term debt financings                                    669,047                   1,459,690           
 Securitization and term debt financing repayments                     (390,945)                 (847,415)           
 Deferred financing costs                                              (20,179)                  (31,691)            
 Restricted secured liquidity facility collateral                      (35,000)                  3,000               
 Secured liquidity facility collateral                                 35,000                    (3,000)             
 Restricted cash and cash equivalents related to financing activities  (25,056)                  99,748              
 Security deposits received                                            20,574                    17,453              
 Security deposits returned                                            (7,914)                   (6,152)             
 Maintenance payments received                                         122,050                   142,122             
 Maintenance payments returned                                         (89,300)                  (57,822)            
 Payments for terminated cash flow hedges                              -                         (50,757)            
 Dividends paid                                                        (45,059)                  (43,669)            
 Net cash (used in) provided by financing activities                   141,608                   637,327             
 Net increase (decrease) in cash and cash equivalents                  55,565                    322,695             
 Cash and cash equivalents at beginning of period                      239,957                   295,522             
 Cash and cash equivalents at end of period                            $     295,522            $     618,217      


 Aircastle Limited and Subsidiaries                                                                                                 
 
Supplemental Financial Information                                                                                                
 
(Amount in thousands, except per share amounts)                                                                                   
 
(Unaudited)                                                                                                                       
                                                                                                                                 
                                                 Three Months Ended                       Twelve Months Ended                    
                                                 
December 31,                            
December 31,                          
                                                 2011                   2012            2011                   2012          
                                                                                                                             
 Revenues                                        $ 156,938              $ 176,610       $ 605,197              $ 686,572     
                                                                                                                             
 EBITDA                                          $ 160,584              $ 163,611       $ 594,800              $ 546,285     
                                                                                                                             
 Adjusted EBITDA                                 $ 161,793              $ 172,279       $ 607,870              $ 647,622     
                                                                                                                             
 Adjusted net income                             $   42,400             $   36,372      $ 144,963              $   57,009    
                                                                                                                             
 Adjusted net income allocable to common shares  $   41,847             $   36,079      $ 143,130              $   56,539    
 Per common share - Basic                        $       0.59           $       0.52    $       1.92           $       0.80  
 Per common share - Diluted                      $       0.59           $       0.52    $       1.92           $       0.80  
                                                                                                                             
 Basic common shares outstanding                 71,407                 69,120          74,686                 70,717        
 Diluted common shares outstanding               71,407                 69,120          74,686                 70,717        
                                                                                                                             
 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 and Adjusted EBITDA Reconciliation                                                                                                                                     
 
(Dollars in thousands)                                                                                                                                                        
 
(Unaudited)                                                                                                                                                                   
                                                                                                                                                                 
                                                                      Three Months Ended                                        Twelve Months Ended                          
                                                                      
December 31,                                             
December 31,                                
                                                                      2011                        2012                        2011                    2012               
                                                                                                                                                                               
 Net income (loss)                                                    $    35,619                $    29,789                $    124,270           $    32,868       
 Depreciation                                                         63,804                      69,896                      242,103                 269,920            
 Amortization of net lease discounts and lease incentives             5,604                       6,452                       16,445                  12,844             
 Interest, net                                                        53,766                      55,605                      204,150                 222,808            
 Income tax provision                                                 1,791                       1,869                       7,832                   7,845              
 EBITDA                                                                    160,584                          163,611              594,800                546,285      
 Adjustments:                                                                                                                                                            
 Impairment of aircraft                                               -                           7,667                       6,436                   96,454             
 Non-cash share based payment expense                                 1,094                       999                         5,786                   4,232              
 Loss (gain) on mark to market of interest rate derivative contracts  115                         2                           848                     (597)              
 Contract termination expense                                         -                           -                           -                       1,248              
 Adjusted EBITDA                                                      $    161,793               $    172,279               $    607,870           $    647,622      
                                                                                                                                                                 


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.  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.

 Aircastle Limited and Subsidiaries                                                                                                              
 
Reconciliation of GAAP to Non-GAAP Measures                                                                                                    
 
Adjusted Net Income Reconciliation                                                                                                             
 
(Dollars in thousands)                                                                                                                         
 
(Unaudited)                                                                                                                                    
                                                                                                                                   
                                               Three Months Ended                                Twelve Months Ended                          
                                               
December 31,                                     
December 31,                                
                                               2011                    2012                    2011                    2012               
                                                                                                                                                
 Net income (loss)                             $    35,619            $    29,789            $    124,270           $    32,868       
 Ineffective portion and termination of        5,572                   1,053                   8,407                   2,893              
   hedges(1)                                                                                                                              
 Mark to market of interest rate derivative    115                     2                       848                     (597)              
   contracts(2)                                                                                                                           
 Loan termination payment(1)                   -                       -                       3,196                   -                  
 Write-off of deferred financing fees(1)       -                       120                     2,456                   3,034              
 Stock compensation expense(3)                 1,094                   999                     5,786                   4,232              
 Term Financing No. 1 hedge loss               -                       4,409                   -                       13,331             
           amortization charges(1)                                                                                                        
 Contract termination expense                  -                       -                       -                       1,248              
 Adjusted net income (loss)                    $    42,400            $    36,372           $    144,963           $    57,009       


                                                
 (1) Included in Interest, net.                 
 (2) Included in Other income (expense).        
 (3) Included in Selling, general and administrative expenses. 
                                                
 Beginning with the quarter ended March 31, 2012, management, to be more consistent with reporting practices of peer aircraft leasing companies, has revised the calculation of Adjusted Net Income ("ANI") to no longer exclude gains (losses) on sales of assets, and to exclude non-cash share based payment expense in the calculation of ANI. Beginning with our Quarterly Report for the quarter ended June 30, 2012, we also excluded Term Financing No. 1 hedge loss amortization charges which will be reported in 
 Interest, net on our consolidated statement of income from the calculation of ANI. The calculation of ANI for the three months ended December 31, 2011 has been revised to be comparable with the current period presentation. 
                                                
 Management believes that ANI, when viewed in conjunction with the Company's results under GAAP and the above reconciliation, provide useful information about operating and period-over-period performance, and provide additional information that is useful for evaluating the underlying operating performance of our business without regard to periodic reporting elements related to interest rate derivative accounting and non-cash share based compensation. However, ANI is not a measure of financial performance or 
 liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss) or cash flow from operating activities as indicators of operating performance or liquidity. 


 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                      Twelve Months Ended                  
                                                                                        
December 31, 2012                      
December 31, 2012                   
 Weighted-average shares:                                                               Shares             Percent(2)         Shares         Percent(2)          
 Common shares outstanding - Basic                                                      69,120             99.19%             70,717         99.18%              
 Unvested restricted common shares                                                      561                0.81%              588            0.82%               
 Total weighted-average shares outstanding                                              69,681             100.00%            71,305         100.00%             
                                                                                                                                                                 
 Net income (loss) allocation                                                                                                                                    
 Net income (loss)                                                                      $29,789            100.00%            $32,868        100.00%             
 Distributed and undistributed earnings (loss) allocated to unvested restricted shares  (240)              (0.81%)            (271)          (0.82%)             
 Earnings (loss) available to common shares                                             $29,549            99.19%             $32,597        99.18%              
                                                                                                                                                                 
 Adjusted net income (loss) allocation                                                                                                                           
 Adjusted net income (loss)                                                             $36,372            100.00%            $57,009        100.00%             
 Amounts allocated to unvested restricted shares                                        (293)              (0.81%)            (470)          (0.82%)             
 Amounts allocated to common shares                                                     $36,079            99.19%             $56,539        99.18%              
                                                                                                                                                               
 (1) For the three and twelve months ended December 31, 2012 the company had no dilutive shares.                                                                        
 (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                      Twelve Months Ended                     
                                                                                 
December 31, 2011                      
December 31, 2011                      
 Weighted-average shares:                                                        Shares             Percent(2)         Shares               Percent(2)       
 Common shares outstanding - Basic                                               71,407             98.70%             74,686               98.74%           
 Unvested restricted common shares                                               943                1.30%              957                  1.26%            
 Total weighted-average shares outstanding                                       72,350             100.00%            75,643               100.00%          
                                                                                                                                                             
 Net income allocation                                                                                                                                       
 Net income                                                                      $35,619            100.00%            $124,270             100.00%          
 Distributed and undistributed earnings allocated to unvested restricted shares  (464)              (1.30%)            (1,571)              (1.26%)          
 Earnings available to common shares                                             $35,155            98.70%             $122,699             98.74%           
                                                                                                                                                             
 Adjusted net income allocation                                                                                                                              
 Adjusted net income                                                             $42,400            100.00%            $144,963             100.00%          
 Amounts allocated to unvested restricted shares                                 (553)              (1.30%)            (1,833)              (1.26%)          
 Amounts allocated to common shares                                              $41,847            98.70%             $143,130             98.74%           
                                                                                                                                                         
 (1) For the three and twelve months ended December 31, 2011 the company had no dilutive shares.                                                                    
 (2) Percentages rounded to two decimal places.                                                                                                                     


SOURCE  Aircastle Limited

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