Aircastle Announces Fourth Quarter and Full Year 2007 Results
STAMFORD, Conn., Feb. 22 /PRNewswire-FirstCall/ --
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.
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)
December 31, December 31,
2006 2007
(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 Years Ended
December 31, December 31,
2006 2007 2006 2007
(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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SOURCE Aircastle Limited CONTACT: Julia Hallisey, Investor Relations of Aircastle Limited, +1-203-504-1063
