Exhibit 99.1
| | FOR IMMEDIATE RELEASE |
Contact: Julia Hallisey | |
Investor Relations Tel: +1-203-504-1063 | |
Aircastle Announces Fourth Quarter and Full Year 2007 Results
Fourth Quarter and Full Year 2007 Highlights
| - | Fourth quarter net income of $35.3 million, or $0.46 per diluted share, up 78.2% and 17.9%, respectively, from fourth quarter of 2006. Net income for the fourth quarter included non-cash expenses of $43.4 million for depreciation and share-based payments and $1.3 million of income from discontinued operations. |
| - | Full year 2007 net income of $127.3 million, or $1.89 per diluted share, up 148.7% and 70.3%, respectively, compared to 2006. Net income for the year included non-cash expenses of $133.1 million for depreciation and share-based payments and $12.9 million of income from discontinued operations. |
| - | Total revenues of $120.7 million for fourth quarter 2007 and $381.1 million for the full year, up 102.7% and 108.4%, respectively, compared to 2006. |
| - | Total owned aviation assets having an aggregate purchase price of $4.1 billion as of December 31, 2007, up 134.9% from December 31, 2006. Acquired 65 aircraft for $2.3 billion in 2007, including the acquisition of 24 aircraft in the fourth quarter. |
| - | Declared fourth quarter dividend of $0.70 per common share; a 7.7% increase over third quarter 2007 dividend and a 60.0% increase year over year. |
Stamford, CT. February 22, 2008 – Aircastle Limited (the “Company” or “Aircastle”) (NYSE: AYR) reported fourth quarter net income of $35.3 million (including non-cash expenses of $43.4 million for depreciation and share based payment expense), or $0.46 per diluted share, representing a 78.2% and a 17.9% increase, respectively, over fourth quarter 2006. Income from continuing operations was $33.9 million for the fourth quarter 2007, or $0.44 per diluted share, up 77.9% and 15.8%, respectively, from fourth quarter 2006. Fourth quarter revenue of $120.7 million increased 102.7% over fourth quarter 2006.
Net income for the year ended December 31, 2007 was $127.3 million (including non-cash expenses of $133.1 million for depreciation and share based payment expense), or $1.89 per diluted share, up
148.7% and 70.3%, respectively, over 2006. Income from continuing operations was $114.4 million for the full year 2007, or $1.70 per diluted share, up 149.1% and 70.0%, respectively, over 2006 results. Total revenue for the year was $381.1 million, up 108.4% from 2006.
Investments in Aviation Assets
As of December 31, 2007, Aircastle owned aviation assets having an aggregate purchase price of $4.1 billion, including 133 aircraft leased to 58 lessees located in 31 countries. During 2007 Aircastle acquired $2.3 billion of aviation assets including 65 aircraft. During the fourth quarter, 24 aircraft were acquired for $820.1 million. In addition, Aircastle had outstanding commitments to acquire 23 aircraft for $1.6 billion as of December 31, 2007, of which 7 aircraft have been or will be acquired during 2008. As of December 31, 2007, all 133 of the Company’s aircraft were either on lease or undergoing the conversion process from passenger to freighter configuration, with both aircraft in conversion having signed, ten-year leases that will commence upon completion of the conversion process.
On June 20, 2007, Aircastle entered into an acquisition agreement under which the Company agreed to acquire fifteen new A330-200 freighter aircraft from Airbus SAS, as a launch customer. The new A330-200 freighter aircraft are scheduled for delivery between June 2010 and November 2011, with five scheduled for delivery in 2010. Aircastle agreed to separate arrangements with Rolls-Royce PLC and Pratt & Whitney to acquire engines for these aircraft.
Aircastle’s CEO, Ron Wainshal, commented, “We’re very pleased with the results of our investment activities this year and have constructed a well diversified global portfolio of high utility assets. Moreover, we’ve capitalized on the continuing strength in aircraft demand by extending terms and signing and committing leases for nearly all of our placement needs for 2008 and have made significant progress on our 2009 placements.”
Capital Markets Activity
On February 5, 2008 Aircastle announced that a subsidiary company entered into a $300.0 million senior secured credit agreement with JPMorgan Chase Bank, N.A. and Calyon New York Branch. This credit facility provides for loans to finance certain specified aircraft owned or to be acquired by affiliates of Aircastle.
During 2007, Aircastle successfully completed follow-on public equity offerings in February and October, raising gross proceeds of approximately $512.3 million and $349.3 million respectively. Aircastle also closed its second securitization encompassing fifty-nine aircraft, issuing $1.17 billion of ACS 2007-1 Class G-1 Certificates, in June 2007.
Conference Call
In connection with this earnings release, management will host an earnings conference call on Friday, February 22, 2008 at 9:00 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 Fourth Quarter and Year End Earnings Call."
A 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 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, March 7, 2008 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference passcode "34057276.”
About Aircastle Limited
Aircastle Limited is a global company that acquires, owns and leases high-utility commercial jet aircraft to airlines throughout the world. As of February 21, 2008 Aircastle had acquired and committed to acquire aviation assets having an aggregate purchase price equal to $4.2 billion and $1.5 billion, respectively, for a total of $5.7 billion.
Safe Harbor
Certain items in this press release 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, issue aircraft lease-backed securities or raise other long-term debt, pay and grow dividends, realize gains or income from our debt investments, obtain required licenses and governmental approvals, obtain favorable tax treatment, extend, modify or replace existing financing and increase revenues, earnings and EBITDA. Words such as ‘‘anticipate(s)’’, ‘‘expect(s)’’, ‘‘intend(s)’’, ‘‘plan(s)’’, ‘‘project(s)’’, ‘‘believe(s)’’, ‘‘will’’, ‘‘would’’, ‘‘should’’, ‘‘seek(s)’’, ‘‘estimate(s)’’ 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. Factors that could cause actual results to differ materially from Aircastle Limited's expectations include, but are not limited to, our customer concentration; our continued ability to obtain additional capital to finance our working capital needs and our growth and to refinance our short-term debt financings with longer-term debt financings; our ability to acquire aircraft at attractive prices; our continued ability to obtain favorable tax treatment in Bermuda, Ireland and other jurisdictions; our ability to pay or maintain dividends; our ability to lease aircraft at favorable rates; an adverse change in the value of our aircraft; the possibility that conditions to closing of certain transactions will not be satisfied; our ability to realize gains or income from, and to continue to finance, our debt investments; general economic conditions and economic conditions in the markets in which we operate; competitive pressures within the industry and/or markets in which we operate; the creditworthiness of our airline customers; interest rate fluctuations; margin calls on our interest rate hedges; our ability to obtain certain required licenses and approvals; the impact of future terrorist attacks or wars on the airline industry; our concentration of leases in certain geographical regions; and other risks detailed from time to time in Aircastle’s filings with the Securities and Exchange Commission (‘SEC”), including as disclosed in our 2006 Annual Report on Form 10-K and updated in our Quarterly Report on Form 10-Q filed on August 14, 2007, and in our other filings with the SEC. Such forward-looking statements speak only as of the date of this press release. Aircastle expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's 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)
| | | | | | | |
| | | | | | (unaudited) | |
| ASSETS | | | | | | |
| Cash and cash equivalents | | $ | 58,118 | | | $ | 13,546 | |
| Accounts receivable | | | 7,696 | | | | 4,957 | |
| Debt investments | | | 121,273 | | | | 113,015 | |
| Restricted cash and cash equivalents | | | 106,069 | | | | 161,317 | |
| Flight equipment held for sale | | | 31,280 | | | | — | |
Flight equipment held for lease, net of accumulated depreciation of $64,111 and $189,737 | | | 1,559,365 | | | | 3,807,116 | |
| Aircraft purchase deposits and progress payments | | | 4,650 | | | | 245,331 | |
Leasehold improvements, furnishings and equipment, net of accumulated depreciation of $694 and $1,335 | | | 1,506 | | | | 1,391 | |
| Fair value of derivative assets | | | 313 | | | | — | |
| Other assets | | | 28,433 | | | | 80,969 | |
| Total assets | | $ | 1,918,703 | | | $ | 4,427,642 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Liabilities | | | | | | | | |
| Borrowings under credit facilities | | $ | 442,660 | | | $ | 798,186 | |
| Borrowings from securitizations | | | 549,400 | | | | 1,677,736 | |
| Accounts payable, accrued expenses and other liabilities | | | 31,384 | | | | 65,967 | |
| Dividends payable | | | 22,584 | | | | 55,004 | |
| Lease rentals received in advance | | | 11,068 | | | | 31,016 | |
| Repurchase agreements | | | 83,694 | | | | 67,744 | |
| Security deposits | | | 39,767 | | | | 74,661 | |
| Maintenance payments | | | 82,914 | | | | 208,363 | |
| Fair value of derivative liabilities | | | 18,035 | | | | 154,388 | |
| Total liabilities | | | 1,281,506 | | | | 3,133,065 | |
| | | | | | | | | |
| Commitments and Contingencies | | | | | | | | |
| | | | | | | | | |
| Shareholders’ Equity | | | | | | | | |
Preference shares, $.01 par value, 50,000,000 shares authorized, no shares issued and outstanding at December 31, 2006 and December 31, 2007 | | | — | | | | — | |
Common shares, $.01 par value, 250,000,000 shares authorized, 51,621,279 shares issued and outstanding at December 31, 2006; and 78,574,657 shares issued and outstanding at December 31, 2007 | | | 516 | | | | 786 | |
| Additional paid-in capital | | | 630,154 | | | | 1,468,140 | |
| Dividends in excess of earnings | | | (3,382 | ) | | | (48,960 | ) |
| Accumulated other comprehensive income (loss) | | | 9,909 | | | | (125,389 | ) |
| Total shareholders’ equity | | | 637,197 | | | | 1,294,577 | |
| Total liabilities and shareholders’ equity | | $ | 1,918,703 | | | $ | 4,427,642 | |
Aircastle Limited and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
| | | Three Months Ended December 31, | | | | |
| | | | | | | | | | | | | |
| | | (unaudited) | | | | | | (unaudited) | |
| Revenues: | | | | | | | | | | | | |
| Lease rentals | | $ | 57,048 | | | $ | 117,729 | | | $ | 173,605 | | | $ | 369,876 | |
| Interest income | | | 2,450 | | | | 2,717 | | | | 9,038 | | | | 10,400 | |
| Other revenue | | | 56 | | | | 262 | | | | 209 | | | | 815 | |
| Total revenues | | | 59,554 | | | | 120,708 | | | | 182,852 | | | | 381,091 | |
| Expenses: | | | | | | | | | | | | | | | | |
| Depreciation | | | 17,684 | | | | 42,025 | | | | 53,424 | | | | 126,403 | |
| Interest, net | | | 15,419 | | | | 29,509 | | | | 49,566 | | | | 92,660 | |
| Selling, general and administrative (including non-cash share based payment expense of $1,166 and $1,398 for the three months ended and $8,895 and $6,674 for the years ended December 31, 2006 and 2007, respectively) | | | 6,860 | | | | 11,716 | | | | 27,836 | | | | 39,040 | |
| Other expenses | | | 61 | | | | 817 | | | | 1,261 | | | | 927 | |
| Total expenses | | | 40,024 | | | | 84,067 | | | | 132,087 | | | | 259,030 | |
| Income from continuing operations before income taxes | | | 19,530 | | | | 36,641 | | | | 50,765 | | | | 122,061 | |
| Income tax provision | | | 465 | | | | 2,723 | | | | 4,845 | | | | 7,658 | |
| Income from continuing operations | | | 19,065 | | | | 33,918 | | | | 45,920 | | | | 114,403 | |
Earnings from discontinued operations, net of income taxes | | | 729 | | | | 1,347 | | | | 5,286 | | | | 12,941 | |
| Net income | | $ | 19,794 | | | $ | 35,265 | | | $ | 51,206 | | | $ | 127,344 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.38 | | | $ | 0.44 | | | $ | 1.00 | | | $ | 1.71 | |
Earnings from discontinued operations, net of income taxes | | | 0.01 | | | | 0.02 | | | | 0.12 | | | | 0.19 | |
| Net income per share | | $ | 0.39 | | | $ | 0.46 | | | $ | 1.12 | | | $ | 1.90 | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share: | | | | | | | | | | | | | | | | |
| Income from continuing operations | | $ | 0.38 | | | $ | 0.44 | | | $ | 1.00 | | | $ | 1.70 | |
Earnings from discontinued operations, net of income taxes | | | 0.01 | | | | 0.02 | | | | 0.11 | | | | 0.19 | |
| Net income per share | | $ | 0.39 | | | $ | 0.46 | | | $ | 1.11 | | | $ | 1.89 | |
| | | | | | | | | | | | | | | | | |
| Dividends paid per share | | $ | 0.1940 | | | $ | 0.65 | | | $ | 0.70 | | | $ | 2.1875 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares used to compute basic earnings per share | | | 50,802,537 | | | | 76,514,226 | | | | 45,758,242 | | | | 67,177,528 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares used to compute diluted earnings per share | | | 51,092,298 | | | | 76,778,606 | | | | 46,051,999 | | | | 67,417,802 | |
Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
| | | Years Ended December 31, | |
| | | 2006 | | | 2007 | |
| | | | | | (unaudited) | |
Cash flows from operating activities | | | | | | |
| Net income | | $ | 51,206 | | | $ | 127,344 | |
Adjustments to reconcile net income to net cash provided by operating activities (inclusive of amounts related to discontinued operations): | | | | | | | | |
| Depreciation | | | 56,629 | | | | 127,164 | |
| Amortization of deferred financing costs | | | 6,380 | | | | 6,991 | |
| Amortization of lease premiums and discounts, and other related lease items | | | (3,705 | ) | | | (7,379 | ) |
| Deferred income taxes | | | 2,341 | | | | (3,590 | ) |
| Accretion of purchase discounts on debt investments | | | (756 | ) | | | (849 | ) |
| Non-cash share based payment expense | | | 8,895 | | | | 6,674 | |
| Capitalized interest | | | — | | | | (7,267 | ) |
| Cash flow hedges reclassified into earnings | | | (2,213 | ) | | | (4,849 | ) |
| Realized gain on derivative contract | | | — | | | | (1,154 | ) |
| Ineffective portion of cash flow hedges | | | (814 | ) | | | 171 | |
| Gain on the sale of flight equipment | | | (2,240 | ) | | | (11,566 | ) |
| Changes in certain assets and liabilities: | | | | | | | | |
| Accounts receivable | | | (4,581 | ) | | | 2,739 | |
| Restricted cash and cash equivalents | | | (65,417 | ) | | | (55,248 | ) |
| Other assets | | | (634 | ) | | | (4,867 | ) |
| Accounts payable, accrued expenses and other liabilities | | | (255 | ) | | | 12,896 | |
| Payable to affiliates | | | 27 | | | | 68 | |
| Lease rentals received in advance | | | 4,827 | | | | 19,948 | |
| Security deposits and maintenance payments | | | 85,592 | | | | 166,568 | |
| Net cash provided by operating activities | | | 135,282 | | | | 373,794 | |
| Cash flows from investing activities | | | | | | | | |
| Acquisition and improvement of flight equipment | | | (882,920 | ) | | | (2,321,237 | ) |
| Disposition of flight equipment held for sale | | | 57,157 | | | | 34,945 | |
| Aircraft purchase deposits and progress payments | | | (1,186 | ) | | | (163,433 | ) |
| Purchase of debt investments | | | (92,726 | ) | | | (15,251 | ) |
| Principal repayments on debt investments | | | 3,606 | | | | 20,801 | |
| Margin call payments on derivatives and repurchase agreements | | | (4,345 | ) | | | (104,121 | ) |
| Margin call receipts on derivatives and repurchase agreements | | | — | | | | 72,586 | |
| Leasehold improvements, furnishings and equipment | | | (506 | ) | | | (526 | ) |
| Net cash used in investing activities | | | (920,920 | ) | | | (2,476,236 | ) |
| Cash flows from financing activities | | | | | | | | |
| Issuance of common shares in public offerings, net | | | 219,595 | | | | 830,809 | |
| Issuance of common shares to Fortress, directors and employees | | | 38,703 | | | | 1,218 | |
| Repurchase of shares from Fortress, directors and employees | | | (36,932 | ) | | | (445 | ) |
| Proceeds from securitizations | | | 560,000 | | | | 1,170,000 | |
| Securitization repayments | | | (10,600 | ) | | | (41,664 | ) |
| Deferred financing costs | | | (19,434 | ) | | | (14,140 | ) |
| Credit facility borrowings | | | 751,736 | | | | 2,059,741 | |
| Credit facility repayments | | | (799,664 | ) | | | (1,800,141 | ) |
| Proceeds from repurchase agreements | | | 76,007 | | | | 1,967 | |
| Principal repayments on repurchase agreements | | | (978 | ) | | | (17,917 | ) |
| Proceeds from terminated cash flow hedges | | | 16,142 | | | | 8,944 | |
| Dividends paid | | | (30,762 | ) | | | (140,502 | ) |
| Net cash provided by financing activities | | | 763,813 | | | | 2,057,870 | |
| Net decrease in cash and cash equivalents | | | (21,825 | ) | | | (44,572 | ) |
| Cash and cash equivalents at beginning of period | | | 79,943 | | | | 58,118 | |
| Cash and cash equivalents at end of period | | $ | 58,118 | | | $ | 13,546 | |
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