Aircastle Announces First Quarter 2007 Results
First Quarter 2007 Highlights
- Net income of $21.5 million, or $0.36 per diluted common share
(including non-cash charges of $23.7 million for depreciation and
share-based compensation expense), on revenues of $70.0 million. - Completed $469.3 million in acquisitions and had outstanding
commitments to acquire $1.43 billion of aviation assets as of March 31,
2007. - Declared first quarter dividend of $0.50 per share, an increase of 14%
over fourth quarter 2006 dividend. - Successfully completed a follow-on public equity offering on February
13, 2007 raising $512.3 million in gross proceeds.
Summary of Financial Results
STAMFORD, Conn., May 14 /PRNewswire-FirstCall/ -- Aircastle Limited (the
"Company" or "Aircastle") (NYSE: AYR) reported first quarter net income of
$21.5 million (including non-cash charges of $23.7 million for depreciation
and share-based compensation expense), or $0.36 per diluted common share.
Income from continuing operations was $20.9 million, and income from
discontinued operations of $684,000 reflects one aircraft being designated as
held for sale during the quarter.
First quarter revenue of $70.0 million increased 17.5% versus the fourth
quarter 2006, and 123% over first quarter 2006. Income from continuing
operations grew 9.4% over fourth quarter 2006 and 181% year over year. The
increases in both revenues and income from continuing operations reflect the
continued growth in our portfolio of aviation assets compared to the prior
periods.
Investments in Aviation Assets
As of March 31, 2007 Aircastle owned aviation assets having an aggregate
purchase price of $2.24 billion, including 77 aircraft all of which are on
lease or subject to binding lease commitments, and one aircraft designated as
held for sale. Aircastle also has outstanding commitments to acquire $1.43
billion in aviation assets as of March 31, 2007, which combined with its owned
portfolio aggregates to $3.67 billion including 115 aircraft leased to 47
lessees located in 27 countries, with one aircraft designated as held for
sale.
On January 22, 2007 Aircastle entered into a definitive purchase agreement
with Guggenheim Aviation Investment Fund L.P. ("GAIF") to purchase 38 aircraft
for an aggregate purchase price of approximately $1.6 billion. The aircraft
are scheduled to be delivered through February 2009, with 28 of these aircraft
scheduled for delivery in 2007.
During the first quarter of 2007 Aircastle acquired $469.3 million of
aviation assets including nine aircraft for $454.0 million and secured debt
investments of $15.3 million. First quarter 2007 acquisitions included six
aircraft for $265.5 million as part of the GAIF transaction.
Joe Adams, Deputy Chairman of Aircastle, commented, "We had an
exceptionally strong first quarter in terms of investment activity --
committing to $1.7 billion and closing $469.3 million of new investments.
Overall, we are very pleased with the pace of growth of the business, having
sourced over $1.4 billion in investments closed or expected to close in 2007.
This significant level of investment activity puts us in a great position to
continue to grow our dividend."
Aircastle's CEO, Ron Wainshal, added, "I am excited about the growth of
our business and our ability to source a broad range of new investments in a
competitive marketplace. In the first five months of 2007, we already
committed and closed more assets than 2006 and I anticipate we will continue
to build on this success while focusing on efficiently financing and managing
the integration of aircraft in our portfolio."
Capital Markets Activity
In conjunction with the Guggenheim acquisition agreement, Aircastle
increased its capacity under its senior secured warehouse facility and its
senior secured revolving credit facility to $1.25 billion and $450.0 million,
respectively, and successfully completed a follow-on equity offering which
generated $512.3 million in gross proceeds during February 2007. After
completion of the follow-on equity offering, borrowing capacity under the
revolving credit facility was reduced to $250.0 million.
Conference Call
In connection with this earnings release, management will host an earnings
conference call on Monday, May 14, 2007 at 11:00 A.M. Eastern time. All
interested parties are welcome to participate on the live call. The conference
call can be accessed by dialing (877) 704-5379 (from within the U.S.) or (913)
312-1293 (from outside of the U.S.) ten minutes prior to the scheduled start
and referencing the "Aircastle First Quarter 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 Monday, May 21, 2007 by dialing
(888) 203-1112 (from within the U.S.) or (719) 457-0820 (from outside of the
U.S.); please reference passcode "7195493."
About Aircastle Limited
Aircastle Limited is a global aviation company that acquires and leases
high-utility commercial jet aircraft to airlines throughout the world. As of
April 30, 2007, Aircastle had acquired and committed to acquire aviation
assets having an aggregate purchase price equal to $2.5 billion and $1.4
billion, respectively, for a total of approximately $3.9 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 and lease aircraft, pay and grow dividends, realize gains
or income from our debt investments, secure financing and increase revenues
and earnings. Words such as "anticipate(s)", "expect(s)", "intend(s)",
"plan(s)", "target(s)", "project(s)", "believe(s)", "will", "would",
"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 significant customer concentration; our continued ability to
obtain additional capital to finance our growth; our continued ability to
acquire aircraft at attractive prices; our continued ability to obtain
favorable tax treatment in Bermuda and other jurisdictions; our ability to pay
or maintain dividends; our ability to lease aircraft at favorable rates and
maintain the value of our aircraft; our ability to realize gains or income
from 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; 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 its Annual Report on
Form 10-K filed with the SEC on March 22, 2007. 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 Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2006 2007
Revenues
Lease rentals $29,752 $67,358
Interest income 1,641 2,588
Other revenue - 58
Total revenues 31,393 70,004
Expenses
Depreciation 9,076 21,633
Interest (net of interest income of
$1,035 and $1,761 for 2006 and
2007, respectively) 7,364 16,730
Selling, general and administrative
(including non-cash share based
payment expense of $1,292 and
$1,258 for 2006 and 2007,
respectively) 5,874 8,497
Other expenses 640 382
Total expenses 22,954 47,242
Income from continuing operations
before income taxes 8,439 22,762
Income tax provision 1,004 1,905
Income from continuing operations 7,435 20,857
Earnings from discontinued
operations, net of income taxes 3,745 684
Net income $11,180 $21,541
Basic earnings per share:
Income from continuing operations $.18 $.35
Earnings from discontinued
operations, net of income taxes .09 .01
Net income per share $.27 $.36
Diluted earnings per share:
Income from continuing operations $.18 $.35
Earnings from discontinued
operations, net of income taxes .09 .01
Net income per share $.27 $.36
Dividends declared per share $- $.50
Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)
December 31, March 31,
2006 2007
(unaudited)
ASSETS
Cash and cash equivalents $58,118 $49,008
Accounts receivable 7,696 3,516
Debt securities 121,273 124,532
Restricted cash and cash equivalents 106,069 121,442
Flight equipment held for sale 31,280 30,462
Flight equipment held for lease, net of
accumulated depreciation of $64,111 and $85,593 1,559,364 1,991,768
Leasehold improvements, furnishings and
equipment, net of accumulated depreciation
of $694 and $842 1,506 1,340
Fair value of derivative assets 313 163
Aircraft purchase deposits 4,650 13,250
Other assets 28,434 34,767
Total assets $1,918,703 $2,370,248
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Borrowings under credit facilities $442,660 $376,283
Borrowings from securitization 549,400 544,000
Accounts payable, accrued expenses and other
liabilities 31,384 34,440
Dividends payable 22,584 33,640
Lease rentals received in advance 11,068 14,044
Repurchase agreements 83,694 80,044
Security deposits 39,767 48,734
Maintenance payments 82,914 102,472
Fair value of derivative liabilities 18,035 29,425
Total liabilities 1,281,506 1,263,082
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 March 31, 2007 - -
Common shares, $.01 par value, 250,000,000 shares
authorized, 51,621,279 shares issued and
outstanding at December 31, 2006; and 67,268,329
shares issued and outstanding at March 31, 2007 516 670
Additional paid-in capital 630,154 1,124,103
Dividends in excess of earnings (3,382) (15,475)
Accumulated other comprehensive income (loss) 9,909 (2,132)
Total shareholders' equity 637,197 1,107,166
Total liabilities and shareholders' equity $1,918,703 $2,370,248
Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2006 2007
Cash flows from Operating activities
Net income $11,180 $21,541
Adjustments to reconcile net income to net
cash provided by operating activities (inclusive
of amounts related to discontinued operations)
Depreciation 9,915 22,394
Amortization of deferred financing costs 793 1,514
Amortization of lease premiums and
discounts, and other related lease items (163) (1,701)
Deferred income taxes 155 1,892
Accretion of purchase discounts on debt
securities (266) (208)
Non-cash share based payment expense 1,292 1,258
Cash flow hedges reclassified into
earnings - (1,007)
Ineffective portion of cash flow hedges (253) 42
Gain on the sale of flight equipment (2,240) -
Changes in certain assets and liabilities:
Accounts receivable (377) 4,180
Restricted cash and cash equivalents (31,689) (15,373)
Other assets (222) (458)
Accounts payable, accrued expenses and
other liabilities (570) (5,056)
Lease rentals received in advance 920 2,976
Security deposits and maintenance payments 25,429 28,525
Net cash provided by operating activities 13,904 60,519
Cash flows from investing activities
Acquisition and improvement of flight equipment (200,456) (446,390)
Disposition of flight equipment held for sale 57,157 -
Restricted cash from disposition of flight
equipment held for sale (20,325) -
Purchase of debt securities (92,726) (15,251)
Margin call on derivative - (5,660)
Leasehold improvements, furnishings and equipment (199) -
Aircraft purchase deposits (1,716) (8,600)
Principal repayments on debt securities 3,106 12,664
Net cash used in investing activities (255,159) (463,237)
Cash flows from financing activities
Issuance of common shares, net 36,932 493,056
Repurchase of shares from employee - (210)
Credit facility borrowings 114,937 486,584
Securitization repayments - (5,400)
Credit facility repayments (36,666) (552,961)
Deferred financing costs (2,106) (1,227)
Proceeds from repurchase agreements 75,968 140
Principal repayment on repurchase agreement (199) (3,790)
Dividends paid - (22,584)
Net cash provided by financing activities 188,866 393,608
Net decrease in cash and cash equivalents (52,389) (9,110)
Cash and cash equivalents at beginning of period 79,943 58,118
Cash and cash equivalents at end of period $27,554 $49,008
SOURCE Aircastle Limited
CONTACT: Julia Hallisey, Investor Relations of Aircastle Limited,
+1-203-504-1063
Web site: http://www.aircastle.com
