Aircastle 8K Announces First Quarter 2008 Results | AYR 12 May 08

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, extend, modify or replace existing financing and increase revenues, earnings and EBITDA. Words such as ”anticipate(s),” ”expect(s),” ”intend(s),” ”plan(s),” “target(s),” “project(s),” “predict(s),” ”believe(s),” “may,” ‘‘will,” ”would,” “could,” ‘‘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. 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, 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 ability to find new ways to raise capital, including managing investment funds; 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; 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; high fuel prices and other factors affecting the creditworthiness of our airline customers; interest rate fluctuations; margin calls and termination payments 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 customers, including geographical concentration; and other risks detailed from time to time in Aircastle Limited’s filings with the Securities and Exchange Commission ( the “SEC”), including “Risk Factors” as previously disclosed in Aircastle’s 2007 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.

	December 31, 2007			March 31, 2008
				(unaudited)
ASSETS
Cash and cash equivalents	$	13,546		$	17,351
Accounts receivable		4,957			5,899
Debt investments		113,015			22,374
Restricted cash and cash equivalents		161,317			179,289
Flight equipment held for lease, net of accumulated depreciation of $189,737 and $237,708		3,807,116			3,980,634
Aircraft purchase deposits and progress payments		245,331			170,638
Leasehold improvements, furnishings and equipment, net of accumulated depreciation of $1,335 and $1,526		1,391			1,390
Other assets		80,969			122,648
Total assets	$	4,427,642		$	4,500,223

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Borrowings under credit facilities	$	798,186		$	981,592
Borrowings from securitizations		1,677,736			1,662,044
Accounts payable, accrued expenses and other liabilities		65,967			73,302
Dividends payable		55,004			19,640
Lease rentals received in advance		31,016			26,669
Repurchase agreements		67,744			2,283
Security deposits		74,661			72,398
Maintenance payments		208,363			230,585
Fair value of derivative liabilities		154,388			248,365
Total liabilities		3,133,065			3,316,878

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, 78,574,657 shares issued and outstanding at December 31, 2007; and 78,559,976 shares issued and outstanding at March 31, 2008		786			786
Additional paid-in capital		1,468,140			1,468,840
Dividends in excess of earnings		(48,960	)		(36,963	)
Accumulated other comprehensive loss		(125,389	)		(249,318	)
Total shareholders’ equity		1,294,577			1,183,345
Total liabilities and shareholders’ equity	$	4,427,642		$	4,500,223

	Three Months Ended March 31,
	2007		2008
Revenues:
Lease rentals	$	67,358	$	133,627
Interest income		2,588		1,291
Other revenue		58		38
Total revenues		70,004		134,956

Expenses:
Depreciation		21,633		48,215
Interest, net		16,730		41,011
Selling, general and administrative (including non-cash share based payment expense of $1,258 and $1,598, respectively)		8,497		11,489
Other expenses		382		890
Total expenses		47,242		101,605

Income from continuing operations before income taxes		22,762		33,351
Income tax provision		1,905		1,714
Income from continuing operations		20,857		31,637
Earnings from discontinued operations, net of income taxes		684		—
Net income	$	21,541	$	31,637


Basic earnings per share:
Income from continuing operations	$	0.35	$	0.41
Earnings from discontinued operations, net of income taxes		0.01		—
Net income per share	$	0.36	$	0.41

Diluted earnings per share:
Income from continuing operations	$	0.35	$	0.41
Earnings from discontinued operations, net of income taxes		0.01		—
Net income per share	$	0.36	$	0.41

Dividends declared per share	$	0.50	$	0.25

	Three Months Ended March 31,
	2007			2008
Cash flows from Operating activities:
Net income	$	21,541		$	31,637
Adjustments to reconcile net income to net cash provided by operating activities (inclusive of amounts related to discontinued operations)
Depreciation		22,394			48,162
Amortization of deferred financing costs		1,514			2,584
Amortization of lease premiums and discounts, and other related lease items		(1,701	)		(2,713	)
Deferred income taxes		1,892			1,061
Accretion of purchase discounts on debt investments		(208	)		(149	)
Non-cash share based payment expense		1,258			1,598
Cash flow hedges reclassified into earnings		(1,007	)		(139	)
Ineffective portion of cash flow hedges		42			1,998
Loss on sale of investments		—			245
Changes in certain assets and liabilities:
Accounts receivable		4,215			(942	)
Restricted cash and cash equivalents		(15,373	)		(17,972	)
Other assets		(458	)		574
Accounts payable, accrued expenses and other liabilities		(5,056	)		(2,081	)
Payable to affiliates		(35	)		(185	)
Lease rentals received in advance		2,976			(4,347	)
Security deposits and maintenance payments		28,525			19,959
Net cash provided by operating activities		60,519			79,290
Cash flows from investing activities:
Acquisition and improvement of flight equipment		(446,390	)		(117,027	)
Aircraft purchase deposits and progress payments		(8,600	)		(5,312	)
Purchase of debt investments		(15,251	)		—
Proceeds from sale of debt investments		—			65,335
Principal repayments on debt investments		12,664			11,224
Margin call payments on derivatives and repurchase agreements		(5,660	)		(198,882	)
Margin call receipts on derivatives and repurchase agreements		—			158,244
Leasehold improvements, furnishings and equipment		—			(190	)
Net cash used in investing activities		(463,237	)		(86,608	)
Cash flows from financing activities:
Issuance of common shares in public offerings, net		493,056			—
Repurchase of shares from directors and employees		(210	)		(898	)
Securitization repayments		(5,400	)		(15,692	)
Deferred financing costs		(1,227	)		(2,571	)
Credit facility borrowings		486,584			325,608
Credit facility repayments		(552,961	)		(142,202	)
Proceeds from repurchase agreements		140			—
Principal repayments on repurchase agreement		(3,790	)		(65,461	)
Payments for terminated cash flow hedges		—			(32,657	)
Dividends paid		(22,584	)		(55,004	)
Net cash provided by financing activities		393,608			11,123
Net decrease in cash and cash equivalents		(9,110	)		3,805
Cash and cash equivalents at beginning of period		58,118			13,546
Cash and cash equivalents at end of period	$	49,008		$	17,351

Contact:	FOR IMMEDIATE RELEASE
Julia Hallisey
Investor Relations
Tel: +1-203-504-1063

	Owned Aircraft as of March 31, 2008(A)
121 Passenger Aircraft	77%
15 Freighter Aircraft	23%
Number of Lessees	59
Number of Countries	31
Weighted Average Remaining Lease Term (years)	5.2
Percentage of Aircraft Leased Outside U.S.	92%
Percentage of “Latest Generation” Aircraft	86%


	Three Months Ended
	March 31,		Percent
	2007	2008	Increase

Revenues	$ 70,004	$ 134,956	92.8%

Annualized month end lease rental run rate at period end	$292,397	$ 546,549	86.9%

EBITDA	$ 59,466	$ 119,931	101.7%

Adjusted Income from continuing operations	$ 20,899	$ 34,901	67.0%
Basic earnings per share	$ 0.36	$ 0.45	25.0%
Diluted earnings per share	$ 0.35	$ 0.45	28.6%

Adjusted Income from continuing operations plus depreciation	$ 42,532	$ 83,116	95.4%
Basic earnings per share	$ 0.72	$ 1.07	48.6%
Diluted earnings per share	$ 0.72	$ 1.07	48.6%

Basic Shares Outstanding	58,864	77,720
Diluted Shares Outstanding	59,156	77,720


	December 31,	March 31,
	2007	2008

Shareholders’ equity	$ 1,294,577	$ 1,183,345
Fair value of derivative liability	154,388	248,365
Adjusted shareholders’ equity	$ 1,448,965	$ 1,431,171

Aircastle (AYR) 8-KAircastle Announces First Quarter 2008 Results