Member access

4-Traders Homepage  >  Shares  >  Nyse  >  Aircastle Limited    AYR   BMG0129K1045

SummaryQuotesChart AnalysisNewsCalendarCompanyFinancialsConsensusRevisions 

AIRCASTLE : Announces First Quarter Results

05/04/2011 | 07:35am US/Eastern
Recommend:
0

STAMFORD, Conn., May 4, 2011 /PRNewswire/ -- Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported first quarter 2011 net income of $42.7 million, or $0.54 per diluted common share, and adjusted net income of $32.9 million, or $0.41 per diluted common share.

Commenting on the results, Ron Wainshal, Aircastle's CEO, stated: "During the first quarter, Aircastle sustained its consistently strong portfolio performance, and the company's financial results started to reflect more fully the positive impact of the $500 million we invested in 2010. We also made progress expanding our asset base to further enhance our future earnings prospects. Our new Airbus A330 deliveries are coming on line as planned and, so far this year, we acquired or signed letters of intent to acquire five additional aircraft, three of which are Boeing 747-400s which we intend to convert into freighter configuration. At the same time, we are continuing to pursue asset sales selectively to take advantage of the market recovery and support our long-term goal of generating strong risk adjusted returns."

__________________

(1) Refer to the selected financial information accompanying this press release for a reconciliation of GAAP to Non-GAAP numbers.

First Quarter Results

Lease rental revenue for the first quarter was $141.1 million, up by $11.0 million, or 8%, year-over-year, due primarily to the impact of aircraft acquisitions net of dispositions of $14.9 million. The increase was partially offset by lower lease rentals due to lease terminations of $2.1 million and lease transitions and extensions of $1.8 million.

Total revenues for the first quarter were $157.9 million, up by $27.4 million year-over-year. The increase reflects higher lease rental revenue as discussed above, as well as higher maintenance and other revenue totaling $14.6 million, driven mainly by early lease terminations during the first quarter of 2011. As previously mentioned, during the first quarter of 2011, Aircastle executed early terminations for five leases - four Airbus A320-200 aircraft leased to an airline based in Egypt and one Airbus A319-100 aircraft leased to an airline in Jordan. Since the end of the first quarter, we have commitments to lease two of these A320s and the A319 aircraft to two different customers. We are remarketing the other aircraft actively.

EBITDA for the first quarter was $154.3 million, up by $33.1 million from the first quarter of 2010, reflecting higher lease rental revenue of $11.0 million as well as increases totaling $14.6 million in maintenance and other revenue. The increase in EBITDA also includes a gain of $9.7 million from the sale of four Boeing 737-400SF aircraft. These increases were partially offset by an increase in SG&A, maintenance and other costs totaling $2.2 million.

Adjusted net income plus depreciation and amortization for the quarter was $95.6 million, a year-over-year increase of $16.0 million. This was due primarily to an increase of $11.0 million in lease rental revenue as well as increases in maintenance and other revenues totaling $14.6 million, partially offset by an increase in adjusted interest expense of $6.4 million and an increase in SG&A and maintenance and other costs of $2.2 million.

Adjusted net income for the quarter was $32.9 million, up $12.3 million year-over-year, reflecting an increase of $27.4 million in total revenues, partially offset by an increase of $5.4 million in depreciation, $6.4 million in adjusted interest expense and $2.2 million in SG&A and maintenance and other costs.

Aviation Assets

In the first quarter of 2011, we completed the sale of four Boeing 737-400SF freighter aircraft for a net gain of $9.7 million and we took delivery of two Airbus A330-200 passenger aircraft, which are on lease to South African Airways.

As of March 31, 2011, Aircastle owned 134 aircraft having a net book value of $4.1 billion.


     Owned Aircraft
     --------------
          as of
          -----
       March 31,
       ---------
         2011(A)
         -------
    113 Passenger Aircraft                                            69%
    21 Freighter Aircraft                                             31%
    Number of Lessees                                                 63
    Number of Countries                                               34
    Weighted Average Remaining Lease Term (years)(B)                 4.7
    Percentage of Aircraft Leased Outside U.S.                        92%
    Percentage of "Latest Generation" Aircraft                        92%
    Weighted Average Fleet Utilization during the three months ended
     March 31, 2011(C)                                                99%



       (A) Percentages calculated using net book value.
       (B) Weighted average remaining lease term (years) by net book value.
       (C) Aircraft on-lease days as a percent of total days in period
       weighted by net book value, excluding aircraft in freighter
       conversion.

Financing Update

In February 2011, we entered into a $72.8 million 12-year term loan with Sumitomo Mitsui Banking Corporation. The loan is supported by a guarantee from COFACE for the financing of a new Airbus A330-200 passenger aircraft. This financing bears interest at a fixed rate of 3.7875%. In March 2011, we entered into a $72.9 million 12-year term loan with Sumitomo Mitsui Banking Corporation. The loan is supported by a guarantee from COFACE for the financing of a new Airbus A330-200 passenger aircraft. This financing bears interest at a fixed rate of 3.7344%.

Share Repurchase Program

As of March 31, 2011, Aircastle repurchased 1.3 million of its shares at a total cost of $15.0 million. As of April 29, we repurchased an additional 1.6 million common shares for a total cost of $19.9 million.

Conference Call

In connection with this earnings release, management will host an earnings conference call on Wednesday, May 4, 2011 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 (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 First Quarter Earnings Call."

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 three months following the call. In addition to this earnings release an accompanying PowerPoint presentation has been posted to the Investor Relations section of Aircastle's website.

For those who are unable to listen to the live call, a replay will be available until 11:59 P.M. Eastern time on Saturday, June 4, 2011 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference pass code "60683997".

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 March 31, 2011 Aircastle's aircraft portfolio consisted of 134 aircraft and had 63 lessees located in 34 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 Net Income and Adjusted Net Income plus Depreciation and Amortization 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 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, significant capital markets disruption and volatility, which may adversely affect our continued ability to obtain additional capital to finance our working capital needs; volatility in the value of our aircraft or in appraisals thereof, which may, among other things, result in increased principal payments under our term financings and reduce our cash flow available for investment or dividends; general economic conditions and business conditions affecting demand for aircraft 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 or unavailability of capital 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 Limited's filings with the SEC, including "Risk Factors" as previously disclosed in Aircastle's 2010 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.

                            Aircastle Limited and Subsidiaries
                                Consolidated Balance Sheets
                         (Dollars in thousands, except share data)
                                        (Unaudited)
                                                   December
                                                      31,      March 31,
                                                        2010         2011
                                                        ----         ----
                                                              (Unaudited)
    ASSETS
    Cash and cash equivalents                       $239,957     $240,275
    Accounts receivable                                1,815        1,447
    Restricted cash and cash equivalents             191,052      191,361
    Restricted liquidity facility collateral          75,000       71,000
    Flight equipment held for lease, net of
     accumulated depreciation of $785,490          4,065,780    4,120,309
      and $835,642
    Aircraft purchase deposits and progress
     payments                                        219,898      186,009
    Other assets                                      65,557       72,300
                                                      ------       ------
       Total assets                               $4,859,059   $4,882,701
                                                  ==========   ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    LIABILITIES
    Borrowings from secured and unsecured
     financings (including borrowings of          $2,707,958   $2,748,906
      ACS Ireland VIEs of $314,877 and $310,573,
       respectively
    Accounts payable, accrued expenses and other
     liabilities                                      76,470       63,847
    Dividends payable                                  7,964        7,857
    Lease rentals received in advance                 43,790       38,955
    Liquidity facility                                75,000       71,000
    Security deposits                                 83,241       82,391
    Maintenance payments                             342,333      327,994
    Fair value of derivative liabilities             179,585      155,363
                                                     -------      -------
       Total liabilities                           3,516,341    3,496,313
                                                   ---------    ---------

    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, 79,640,285 shares issued
     and outstanding at December 31, 2010; and
     78,568,761 shares issued and outstanding at
     March 31, 2011                                      796          783
    Additional paid-in capital                     1,485,841    1,468,401
    Retained earnings                                104,301      139,121
    Accumulated other comprehensive loss            (248,220)    (221,917)
                                                    --------     --------
       Total shareholders' equity                  1,342,718    1,386,388
                                                   ---------    ---------
       Total liabilities and shareholders' equity $4,859,059   $4,882,701
                                                  ==========   ==========


                             Aircastle Limited and Subsidiaries
                              Consolidated Statements of Income
                      (Dollars in thousands, except per share amounts)
                                         (Unaudited)
                                                     Three Months Ended
                                                     ------------------
                                                          March 31,
                                                          ---------
                                                        2010        2011
                                                        ----        ----
    Revenues:
     Lease rental revenue                           $130,122    $141,116
     Amortization of net lease discounts and lease
      incentives                                      (4,845)     (3,102)
     Maintenance revenue                               5,254      16,844
                                                       -----      ------
        Total lease rentals                          130,531     154,858
     Other revenue                                        30       3,056
                                                         ---       -----
       Total revenues                                130,561     157,914
                                                     -------     -------

    Expenses:
     Depreciation                                     54,145      59,591
     Interest, net                                    40,959      45,619
     Selling, general and administrative (including
      non-cash share based payment expense            11,673      12,531
         of $1,782, and $1,895, respectively)
     Maintenance and other costs                       2,200       3,530
                                                       -----       -----
      Total expenses                                 108,977     121,271
                                                     -------     -------

    Other income (expense):
     Gain on sale of flight equipment                      -       9,662
     Other                                              (370)       (359)
                                                        ----        ----
       Total other income (expense)                     (370)      9,303
                                                        ----       -----

    Income from continuing operations before income
     taxes                                            21,214      45,946
    Income tax provision                               2,335       3,269
                                                       -----       -----
    Net income                                       $18,879     $42,677
                                                     =======     =======


    Earnings per common share - Basic                  $0.24       $0.54
                                                       =====       =====

    Earnings per common share - Diluted                $0.24       $0.54
                                                       =====       =====

    Dividends declared per share                       $0.10       $0.10
                                                       =====       =====


                             Aircastle Limited and Subsidiaries
                            Consolidated Statements of Cash Flows
                                   (Dollars in thousands)
                                         (Unaudited)
                                                      Three Months Ended
                                                           March 31,
                                                           ---------
                                                        2010         2011
                                                        ----          ---
    Cash flows from operating activities:
    Net income                                       $18,879      $42,677
      Adjustments to reconcile net income to net
       cash provided by operating activities:
       Depreciation                                   54,145       59,591
       Amortization of deferred financing costs        2,804        3,528
       Amortization of net lease discounts and
        lease incentives                               4,845        3,102
       Deferred income taxes                           1,234        1,853
       Non-cash share based payment expense            1,782        1,895
       Cash flow hedges reclassified into earnings     2,304        2,835
       Ineffective portion of cash flow hedges           866         (475)
       Security deposits and maintenance payments
        included in earnings                            (267)     (18,534)
       Gain on sale of flight equipment                    -       (9,662)
       Other                                             370          (57)
       Changes in certain assets and liabilities:
         Accounts receivable                            (346)       1,288
         Restricted cash and cash equivalents        (22,185)        (309)
         Other assets                                   (946)        (731)
         Accounts payable, accrued expenses and
          other liabilities                           (9,309)     (17,416)
         Lease rentals received in advance            (2,464)      (5,381)
                                                      ------       ------
          Net cash provided by operating activities   51,712       64,204
                                                      ------       ------

    Cash flows from investing activities:
      Acquisition and improvement of flight
       equipment and lease incentives                (10,136)    (110,410)
      Proceeds from sale of flight equipment               -       75,200
      Aircraft purchase deposits and progress
       payments                                      (39,551)     (36,630)
                                                     -------      -------
          Net cash used in investing activities      (49,687)     (71,840)
                                                     -------      -------

    Cash flows from financing activities:
      Repurchase of shares from directors and
       employees                                        (926)     (16,367)
      Proceeds from term debt financings                   -      157,161
      Securitization and term debt financing
       repayments                                    (37,929)    (116,340)
      Deferred financing costs                          (106)      (7,346)
      Restricted secured liquidity facility
       collateral                                      1,000        4,000
      Secured liquidity facility collateral           (1,000)      (4,000)
      Security deposits received                       2,413        7,009
      Security deposits returned                      (3,868)      (5,312)
      Maintenance payments received                   31,186       27,487
      Maintenance payments returned                   (5,906)     (30,374)
      Dividends paid                                  (7,955)      (7,964)
                                                      ------       ------
          Net cash (used in) provided by financing
           activities                                (23,091)       7,954
                                                     -------        -----

    Net increase (decrease) in cash and cash
     equivalents                                     (21,066)         318
    Cash and cash equivalents at beginning of
     period                                          142,666      239,957
                                                     -------      -------
    Cash and cash equivalents at end of period      $121,600     $240,275
                                                    ========     ========


                           Aircastle Limited and Subsidiaries
                           Supplemental Financial Information
                     (Amount in thousands, except per share amounts)
                                       (Unaudited)
                                                      Three Months Ended
                                                      ------------------
                                                           March 31,
                                                           ---------
                                                       2010            2010
                                                       ----            ----

    Revenues                                       $130,561        $157,914

    EBITDA                                         $121,163        $154,258

    Adjusted net income                             $20,563         $32,899

    Adjusted net income allocable to common shares  $20,243         $32,522
      Per common share - Basic                        $0.26           $0.41
      Per common share - Diluted                      $0.26           $0.41

    Adjusted net income plus depreciation and
     amortization                                   $79,553         $95,592

    Adjusted net income plus depreciation and
     amortization allocable to common shares        $78,317         $94,496
      Per common share - Basic                        $1.00           $1.20
      Per common share - Diluted                      $1.00           $1.20

    Basic common shares outstanding                  78,416          78,786
    Diluted common shares outstanding                78,416          78,786


Refer to the selected financial 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 Reconciliation
                            (Dollars in thousands)
                                 (Unaudited)
                                                        Three Months Ended
                                                        ------------------
                                                             March 31,
                                                             ---------
                                                           2010          2011
                                                           ----          ----

    Net income                                          $18,879       $42,677
    Depreciation                                         54,145        59,591
    Amortization of net lease discounts and lease
     incentives                                           4,845         3,102
    Interest, net                                        40,959        45,619
    Income tax provision                                  2,335         3,269
                                                          -----         -----
    EBITDA                                             $121,163      $154,258
                                                       ========      ========


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.

                      Aircastle Limited and Subsidiaries
                  Reconciliation of GAAP to Non-GAAP Measures
    Adjusted Net Income plus Depreciation and Amortization Reconciliation
                            (Dollars in thousands)
                                  (Unaudited)
                                                           Three Months Ended
                                                           ------------------
                                                               March 31,
                                                               ---------
                                                              2010       2011
                                                              ----       ----

    Net income                                             $18,879    $42,677
       Ineffective portion of cash flow hedges(1)            1,314       (475)
       Mark to market of interest rate derivative
        contracts(2)                                           370        359
       Gain on sale of flight equipment(2)                       -     (9,662)
                                                               ---     ------
    Adjusted net income                                     20,563     32,899
       Depreciation                                         54,145     59,951
       Amortization of net lease discounts and lease
        incentives                                           4,845      3,102
                                                             -----      -----
    Adjusted net income plus depreciation and
     amortization                                          $79,553    $95,592
                                                           =======    =======

    __________________
    (1)  Included in Interest, net
    (2)  Included in Other income (expense)

Management believes that Adjusted Net Income ("ANI") and Adjusted Net Income plus Depreciation and Amortization ("ANIDA"), 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 as well as gains/(losses) related to flight equipment and debt investments. Additionally, management believes that ANIDA provides investors with an additional metric to enhance their understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made, debt is serviced and dividends are paid. However, ANI and ANIDA are not measures 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
                                          ------------------
                                            March 31, 2011
                                            --------------
                                             Shares          Percent(2)
                                             ------          ----------
    Weighted average shares
    -----------------------
    Common shares outstanding - Basic           78,786            98.85 %
    Unvested restricted common shares
     outstanding                                   913             1.15 %
                                                   ---             -----
    Total weighted average shares
     outstanding                                79,699           100.00 %
                                                ======           =======

    Common shares outstanding - Basic           78,786           100.00 %
    Effect of dilutive shares(1)                     -                 -
                                                   ---               ---
    Common shares outstanding - Diluted         78,786           100.00 %
                                                ======           =======

    Net income allocation
    ---------------------
    Net income                                 $42,677           100.00 %
    Distributed and undistributed
     earnings allocated to unvested
     restricted shares                            (489)           (1.15)%
                                                  ----            ------
    Earnings available to common shares        $42,188            98.85 %
                                               =======            ======

    Adjusted net income allocation
    ------------------------------
    Adjusted net income                        $32,899           100.00 %
    Amounts allocated to unvested
     restricted shares                            (377)           (1.15)%
                                                  ----            ------
    Amounts allocated to common shares         $32,522            98.85 %
                                               =======            ======

    Adjusted net income plus depreciation
     and amortization allocation
    -------------------------------------
    Adjusted net income plus depreciation
     and amortization                          $95,592           100.00 %
    Amounts allocated to unvested
     restricted shares                          (1,096)           (1.15)%
                                                ------            ------
    Amounts allocated to common shares         $94,496            98.85 %
                                               =======            ======


       (1) The Company had no dilutive common share equivalents for the
       periods presented.
       (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
                                          ------------------
                                            March 31, 2010
                                            --------------
                                             Shares          Percent(2)
                                             ------          ----------
    Weighted average shares
    -----------------------
    Common shares outstanding - Basic           78,416            98.45 %
    Unvested restricted common shares
     outstanding                                 1,238             1.55 %
                                                 -----             -----
    Total weighted average shares
     outstanding                                79,654           100.00 %
                                                ======           =======

    Common shares outstanding - Basic           78,416           100.00 %
    Effect of dilutive shares(1)                     -                 -
                                                   ---               ---
    Common shares outstanding - Diluted         78,416           100.00 %
                                                ======           =======

    Net income allocation
    ---------------------
    Net income                                 $18,879           100.00 %
    Distributed and undistributed
     earnings allocated to unvested
     restricted shares                            (293)           (1.55)%
                                                  ----            ------
    Earnings available to common shares        $18,586            98.45 %
                                               =======            ======

    Adjusted net income allocation
    ------------------------------
    Adjusted net income                        $20,563           100.00 %
    Amounts allocated to unvested
     restricted shares                            (320)           (1.55)%
                                                  ----            ------
    Amounts allocated to common shares         $20,243            98.45 %
                                               =======            ======

    Adjusted net income plus depreciation
     and amortization allocation
    -------------------------------------
    Adjusted net income plus depreciation
     and amortization                          $79,553           100.00 %
    Amounts allocated to unvested
     restricted shares                          (1,236)           (1.55)%
                                                ------            ------
    Amounts allocated to common shares         $78,317            98.45 %
                                               =======            ======


       (1) The Company had no dilutive common share equivalents for the
       periods presented.
       (2) Percentages rounded to two decimal places.

Contact:
Michael Inglese - Chief Financial Officer
Tel: +1-203-504-1063

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

SOURCE Aircastle Limited

Recommend :
0
React to this article
Latest news on AIRCASTLE LIMITED
08/28 AIRCASTLE : to Present at Cowen and Company's 7th Annual Global Transportation C..
08/27 AIRCASTLE LIMITED : ex-dividend day
07/31 AIRCASTLE : Announces Second Quarter 2014 Results
07/22 AIRCASTLE : Announces the Resignation of its Chief Operating Officer
07/17 AIRCASTLE : to Announce Second Quarter 2014 Earnings on July 31, 2014
05/28 AIRCASTLE LIMITED : ex-dividend day
05/22 AIRCASTLE : Appoints Michael Cave and Masumi Kakinoki to its Board of Directors
05/14 AIRCASTLE : to Present at RBC Capital Markets 2014 Aerospace & Defense Investor ..
05/07 AIRCASTLE : Announces First Quarter 2014 Results
05/05 AIRCASTLE : to Host Investor and Analyst Event on May 14, 2014
Dynamic quotes  
ON
| OFF