Aircastle Announces Second Quarter Results

STAMFORD, Conn., Aug. 4, 2011 /PRNewswire via COMTEX/ — Aircastle Limited (the “Company” or “Aircastle”) AYR +1.38% reported second quarter 2011 net income of $23.3 million, or $0.30 per diluted common share, and adjusted net income of $20.6 million, or $0.27 per diluted common share.

Commenting on the results, Ron Wainshal, Aircastle’s CEO, stated: “During the second quarter, we realized tangible benefits from our disciplined, value-added investment approach. Specifically, the $760 million of investments we made during the past four quarters enabled the Company to post higher revenues and earnings. I’m excited about our investment pipeline, which I believe will allow us to generate more than half a billion of accretive acquisitions during the second half of 2011, on top of the built-in growth from the Airbus A330 delivery stream. Consistent with our focus on achieving superior risk adjusted returns, we will also look for opportunities to take advantage of strong asset prices through successful dispositions, while continuing to return value to shareholders in the form of quarterly dividends and share repurchases.”

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

Second Quarter Results

Lease rental revenue for the second quarter was $143.4 million, up by $15.2 million, or 12%, year-over-year, due primarily to the impact of aircraft acquisitions net of dispositions of $18.5 million. The increase was partially offset by lower lease rentals due to lease terminations and lease transitions and extensions of $3.7 million.

Total revenues for the second quarter were $148.8 million, up by $18.7 million, or 14%, year-over-year. The increase reflects higher lease rental revenue as discussed above, as well as higher maintenance revenue of $1.3 million and lower lease incentive amortization of $1.9 million.

During the second quarter we early terminated a lease related to one Boeing Model 737-400 aircraft and recorded maintenance and other revenue totaling $3.1 million and an impairment charge of $5.2 million.

EBITDA for the second quarter was $142.3 million, up by $23.2 million from the second quarter of 2010, reflecting higher lease rental and maintenance revenue totaling $16.5 million compared to the second quarter of 2010. The increase in EBITDA also includes a gain of $10.3 million from the sale of one Airbus A330-200 aircraft. The impact of these items was partially offset by the impairment charge of $5.2 million discussed above.

Adjusted net income plus depreciation and amortization for the quarter was $82.2 million, a year-over-year increase of $2.4 million. This was due primarily to an increase in lease rental and maintenance revenue totaling $16.5 million, partially offset by an increase in adjusted interest expense of $9.3 million and the $5.2 million impairment charge discussed above.

Adjusted net income for the quarter was $20.6 million, up $0.1 million year-over-year, reflecting an increase of $18.7 million in total revenues, partially offset by increases of $4.2 million in depreciation, $9.3 million in adjusted interest expense and the impairment charge of $5.2 million discussed above.

Aviation Assets

During the second quarter, we took delivery of one Airbus A330-200 passenger aircraft, which is on lease to South African Airways, one leased Airbus A320 aircraft and one Boeing Model 747-400 aircraft which is being converted to freighter configuration. We have a letter of intent to lease this aircraft when the freighter conversion process is complete. Consistent with our focus on achieving superior returns through successful asset disposition, we also sold one Airbus A330-200 aircraft during the quarter, resulting in a gain of $10.3 million before certain non-cash charges and loan termination fees.

As of June 30, 2011, Aircastle owned 136 aircraft having a net book value of $4.1 billion.

Financing Update

In May 2011, we entered into a12-year term loan with Sumitomo Mitsui Banking Corporation, supported by a guarantee from the French export credit agency, COFACE, for the financing of a new Airbus A330-200 passenger aircraft. This financing bears interest at a fixed rate of 3.9625%. In June 2011, we repaid in full the outstanding principal balance of one of our ECA term financings from the proceeds of the sale of an Airbus Model A330-200 aircraft.

Share Repurchase Program

As of June 30, 2011, Aircastle repurchased 4.9 million of its shares at a total cost of $60.0 million under its initial share repurchase program. In June 2011, the Company’s Board of Directors authorized an increase in the Company’s share repurchase program by up to $30 million of its common shares, for a total of up to $90 million of its common shares in the aggregate.

Conference Call

In connection with this earnings release, management will host an earnings conference call on Thursday, August 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 Second 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 Sunday, September 4, 2011 by dialing (855) 859-2056 (from within the U.S.) or (404) 537-3406 (from outside of the U.S.); please reference passcode “83374902”.

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 June 30, 2011 Aircastle’s aircraft portfolio consisted of 136 aircraft and had 59 lessees located in 32 countries.