Aircastle Limited
Nov 4, 2010
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Aircastle Announces Third Quarter 2010 Results

Third Quarter Highlights

STAMFORD, Conn., Nov. 4, 2010 /PRNewswire via COMTEX/ -- Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported third quarter 2010 net income of $8.6 million or $0.11 per diluted common share, and adjusted net income of $12.6 million or $0.16 per diluted common share. These results include pre-tax impairment charges totaling $7.3 million related to the sale of the only remaining 737-500 Classic aircraft in the company's fleet and an early lease termination of one 737-300 Classic. The impairment charges were partially offset by maintenance, lease incentives and other revenues totaling $2.8 million, for a net pre-tax impact of $4.5 million, or $0.06 per diluted common share.

 

Commenting on the results, Ron Wainshal, Aircastle's CEO, stated, "Over the past several months, the company reached several important operational and financial milestones while maintaining consistently good portfolio performance. We expect to complete more than half a billion dollars in attractive aircraft investments during the second half of 2010, including two new A330-200F freighter aircraft from our order stream. Aircastle also has approximately $700 million of additional built-in growth over the next eighteen months from our new A330 program. With more than $310 million in unrestricted cash at the end of the third quarter 2010 and strong cash flows from our business, we are in an excellent position to benefit from the continuing industry recovery."

Lease rental revenue for the third quarter was $133.5 million, up $5.2 million or 4.1% year over year, due primarily to the impact of lease revenues on aircraft acquired in the quarter exceeding lease revenues on dispositions by $5.0 million. Total revenues for the third quarter were $132.2 million, a decrease of $33.5 million from the previous year, and reflects lower maintenance revenue of $28.8 million due to fewer scheduled and unscheduled lease transitions in 2010 compared to the same period in 2009 and lower other revenue, reflecting $9.4 million of lease termination revenue in 2009 for which there were no comparable payments in the third quarter 2010.

EBITDA for the third quarter was $116.1 million, down $19.0 million from the third quarter of 2009, due primarily to lower maintenance and lease termination revenue totaling $38.2 million, partially offset by higher lease rental revenue of $5.2 million, lower maintenance and other expenses of $3.6 million and lower non-cash impairment charges of $10.9 million.

Interest expense, net was $47.5 million for the third quarter 2010, compared to $43.0 million for the third quarter 2009, reflecting the partial quarter impact of the Company's late July 2010 $300 million senior notes issuance, as well as the write off of $2.5 million of deferred financing fees associated with the full repayment of certain term loan facilities with a portion of the net proceeds of the July notes offering.

Adjusted net income plus depreciation and amortization for the quarter was $72.5 million, down $20.3 million year over year, due primarily to lower maintenance and lease termination revenue totaling $38.2 million and higher adjusted interest expense of $2.5 million, partially offset by higher lease rental revenue of $5.2 million, lower maintenance and other expenses of $3.6 million and lower non-cash impairment charges of $10.9 million.

Adjusted net income for the quarter was $12.6 million, down $23.1 million year over year, and reflects lower total revenues described above, higher adjusted interest expense of $2.5 million, partially offset by lower maintenance and other costs of $3.6 million and lower non-cash impairment charges of $10.9 million.

Aviation Assets

During the third quarter, Aircastle acquired three Airbus A330-200 aircraft in a sale lease-back transaction with SriLankan Airlines. After the close of the third quarter, we acquired three Boeing 737-800 aircraft during October and also committed to acquire two Boeing 747-400F production freighter aircraft exiting Japan Airlines' fleet. We expect these freighters to be delivered to us during the fourth quarter of 2010, and we have a commitment for the lease of one aircraft, and a letter of intent for lease of the other.

In September 2010, we took delivery of our first new A330-200F freighter aircraft which is on lease to Hong Kong Airlines, an affiliate of the HNA Group, and took delivery of a second of three A330-200F aircraft for this lessee in November 2010. Also, we signed a letter of intent to lease our final A330 delivery position from our new order stream, delivering in spring 2012.

During the third quarter of 2010, we sold one Boeing 757-200 aircraft that had been subject to a forward sale agreement at an approximately break-even price. We also signed a forward sale agreement for the last 737-500 aircraft in our portfolio, with the transaction expected to be consummated upon the expiry of the current lease in spring 2011. The 737-500 sale agreement resulted in a third quarter 2010 non-cash impairment charge related to this aircraft of $2.8 million, which is included in the $7.3 million impairment charge in the quarter described previously. During the first quarter of 2010, we received end-of-lease maintenance revenue of $4.4 million from the previous lessee of this aircraft.

Finally, during the third quarter one 737-300 Classic aircraft was returned early when the lessee ceased operations. The early return resulted in a net pre-tax charge of $1.7 million, including $2.8 million of maintenance and other revenues, offset by an impairment charge of $4.5 million.

During the fourth quarter of 2010, we expect to complete the sale of four Boeing 737-400SF freighter aircraft which are subject to executed sales agreements. We are also receiving insurance proceeds from the loss of one 737-700 that suffered an event of loss in the third quarter 2010. The sale and insurance proceeds are expected to add more than $13 million in pre-tax income during the fourth quarter of 2010.

As of September 30, 2010, Aircastle owned 132 aircraft having a net book value of $3.9 billion.


 

Owned Aircraft

as of

September 30,

2010(A)

 

110 Passenger Aircraft

70%

 

22 Freighter Aircraft

30%

 

Number of Lessees

63

 

Number of Countries

36

 

Weighted Average Remaining Lease Term (years)(B)

4.6

 

Percentage of Aircraft Leased Outside U.S.

91%

 

Percentage of "Latest Generation" Aircraft

89%

 

Weighted Average Fleet Utilization during the Three Months ended September 30, 2010(C)

100%

 

Weighted Average Fleet Utilization during the Nine Months ended September 30, 2010(C)

98%

 

 

(A) Percentages calculated using net book value.

(B) Weighted average remaining lease term (years) by net 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 September 2010, we entered into a $50 million senior unsecured revolving credit facility which has a three-year term.

In July 2010, Aircastle Limited closed a private placement offering of 9.75% senior unsecured notes due in 2018, in an aggregate principal amount of $300 million. The notes were issued at 98.645% of par and were offered only to qualified institutional buyers and buyers outside the United States in accordance with Rule 144A and Regulation S, respectively, under the Securities Act of 1933. We used a portion of the net proceeds of the private placement to repay all of the outstanding indebtedness under our Term Financing No. 2, to repay $25 million drawn under a credit facility used in connection with the purchase and lease-back of one A330 aircraft, and we plan to use the remaining net proceeds for general corporate purposes, including the purchase of aviation assets. These notes were registered with the United States Securities Exchange Commission on September 24, 2010, and we began the process to exchange 100% of these notes for registered notes having substantially identical terms. This process was completed on October 25, 2010.

In addition, in July 2010, we secured new financing commitments for our Airbus A330 Agreement which will benefit from an ECA guarantee provided by Compagnie Francaise d'Assurance pour le Commerce Exterieur, or COFACE, as follows:

 

 

Conference Call

In connection with this earnings release, management will host an earnings conference call on November 4, 2010 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 Third Quarter Earnings Call."

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at http://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 power point presentation has been posted to the Investor Relations section of Aircastle's website.

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 Thursday, November 11, 2010 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference passcode "18283666."

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 September 30, 2010 Aircastle's aircraft portfolio consisted of 132 aircraft and had 63 lessees located in 36 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, prolonged capital markets disruption and volatility, which may adversely affect our continued ability to obtain additional capital to finance our working capital needs, our pre-delivery payment obligations and other aircraft acquisition commitments, our ability to extend or replace our existing financings, and the demand for and value of aircraft; our exposure to increased bank and counterparty risk caused by credit and capital markets disruptions; 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 caused by volcanic activity 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 2009 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.

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

Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)

 

 

December31,
2009

September30,
2010

 


(Unaudited)

 

ASSETS



 

Cash and cash equivalents

$ 142,666

$ 310,881

 

Accounts receivable

2,941

1,900

 

Restricted cash and cash equivalents

207,834

190,331

 

Restricted liquidity facility collateral

81,000

77,000

 

Flight equipment held for lease, net of accumulated depreciation of

$586,537 and $740,786

3,812,970

3,871,054

 

Aircraft purchase deposits and progress payments

141,144

228,023

 

Leasehold improvements, furnishings and equipment, net of accumulated depreciation of $2,455 and $2,746

802

534

 

Other assets

65,155

71,569

 

Total assets

$ 4,454,512

$ 4,751,292

 



 

LIABILITIES AND SHAREHOLDERS' EQUITY



 

LIABILITIES



 

Borrowings from secured and unsecured debt financings (including borrowings of ACS Ireland VIEs of $331,856 and $318,736, respectively)

$ 2,464,560

$ 2,679,909

 

Accounts payable, accrued expenses and other liabilities

60,392

68,738

 

Dividends payable

7,955

7,947

 

Lease rentals received in advance

34,381

38,049

 

Liquidity facility

81,000

77,000

 

Security deposits

82,533

77,610

 

Maintenance payments

253,175

299,519

 

Fair value of derivative liabilities

179,279

217,089

 

Total liabilities

3,163,275

3,465,861

 



 

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, 79,550,421 shares issued and outstanding at December 31, 2009; and 79,471,068 shares issued and outstanding at September 30, 2010

796

795

 

Additional paid-in capital

1,479,995

1,483,577

 

Retained earnings

70,294

92,036

 

Accumulated other comprehensive loss

(259,848)

(290,977)

 

Total shareholders' equity

1,291,237

1,285,431

 

Total liabilities and shareholders' equity

$ 4,454,512

$ 4,751,292

 

 
     

Aircastle Limited and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

 

 

Three Months Ended
September 30,


Nine Months Ended
September 30,

 

2009


2010


2009


2010

 

Revenues:








 

Lease rental revenue

$ 128,283


$ 133,486


$ 383,683


$ 391,741

 

Amortization of net lease discounts and lease incentives

(3,992)


(4,203)


(7,919)


(13,957)

 

Maintenance revenue

31,376


2,540


47,616


14,630

 

Total lease rentals

155,667


131,823


423,380


392,414

 

Interest income

556


--


1,783


--

 

Other revenue

9,517


424


9,628


578

 

Total revenues

165,740


132,247


434,791


392,992

 








 

Expenses:








 

Depreciation

53,130


55,703


156,379


164,272

 

Interest, net

43,032


47,453


127,925


128,578

 

Selling, general and administrative (including non-cash share based payment expense of $1,742 and $1,532 for the three months ended, and $5,129 and $5,243 for the nine months ended, September 30, 2009 and 2010, respectively)

11,074


11,334


33,291


34,043

 

Impairment of aircraft

18,211


7,342


18,211


7,342

 

Maintenance and other costs

4,836


1,192


15,114


6,829

 

Total expenses

130,283


123,024


350,920


341,064

 








 

Other income (expense):








 

Gain (loss) on sale of aircraft

162


--


162


(1,291)

 

Other income (expense)

(738)


(501)


855


(1,047)

 

Total other income (expense)

(576)


(501)


1,017


(2,338)

 








 

Income from continuing operations before income taxes

34,881


8,722


84,888


49,590

 

Income tax provision

1,423


153


5,388


4,003

 

Net income

$ 33,458


$ 8,569


$ 79,500


$ 45,587

 








 








 

Earnings per common share - Basic

$ 0.42


$ 0.11


$ 1.00


$ 0.57

 








 

Earnings per common share - Diluted

$ 0.42


$ 0.11


$ 1.00


$ 0.57

 








 

Dividends declared per share

$ 0.10


$ 0.10


$ 0.30


$ 0.30

 

 
               

Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

 

 


Nine Months Ended

September 30,

 

2009

2010

 

Cash flows from operating activities:



 

Net income

$ 79,500

$ 45,587

 

Adjustments to reconcile net income to net cash provided by operating activities:



 

Depreciation

156,379

164,272

 

Amortization of deferred financing costs

8,808

11,494

 

Amortization of net lease discounts and lease incentives

7,919

13,957

 

Deferred income taxes

4,560

2,957

 

Accretion of purchase discounts on debt investments

(430)

--

 

Non-cash share based payment expense

5,129

5,243

 

Cash flow hedges reclassified into earnings

10,932

6,412

 

Ineffective portion of cash flow hedges

(116)

2,533

 

(Gain) loss on sale of flight equipment

(162)

1,291

 

Security deposits and maintenance payments included in earnings

(36,982)

(13,026)

 

Loss on sale of investments

131

--

 

Impairment of aircraft

18,211

7,342

 

Other

(556)

990

 

Changes in certain assets and liabilities:



 

Accounts receivable

(909)

15

 

Restricted cash and cash equivalents

(35,456)

17,503

 

Other assets

(1,975)

(4,288)

 

Accounts payable, accrued expenses and other liabilities

(8,397)

3,137

 

Lease rentals received in advance

(537)

3,298

 

Net cash provided by operating activities

206,049

268,717

 



 

Cash flows from investing activities:



 

Acquisition and improvement of flight equipment and lease incentives

(124,082)

(230,450)

 

Proceeds from sale of flight equipment

10,601

34,832

 

Aircraft purchase deposits and progress payments, net of returned deposits

(41,912)

(124,994)

 

Proceeds from sale of debt investments

5,423

--

 

Principal repayments on debt investments

3,787

--

 

Leasehold improvements, furnishings and equipment

(82)

(23)

 

Net cash used in investing activities

(146,265)

(320,635)

 



 

Cash flows from financing activities:



 

Repurchase of shares from directors and employees

(247)

(1,662)

 

Proceeds from debt financings

70,916

472,682

 

Debt repayments

(111,619)

(257,418)

 

Deferred financing costs

(3,588)

(11,974)

 

Restricted secured liquidity facility collateral

(81,000)

4,000

 

Secured liquidity facility collateral

81,000

(4,000)

 

Security deposits received

39,554

6,675

 

Security deposits returned

(11,541)

(10,255)

 

Maintenance payments received

56,608

89,035

 

Maintenance payments returned

(21,938)

(39,511)

 

Payments for terminated hedges

(2,758)

(3,586)

 

Dividends paid

(23,710)

(23,853)

 

Net cash provided by (used in) financing activities

(8,323)

220,133

 



 

Net increase in cash and cash equivalents

51,461

168,215

 

Cash and cash equivalents at beginning of period

80,947

142,666

 

Cash and cash equivalents at end of period

$ 132,408

$ 310,881

 

 
     

Aircastle Limited and Subsidiaries

Supplemental Financial Information

(Amount in thousands, except per share amounts)

(Unaudited)

 








 

Three Months Ended

September 30,


Nine Months Ended

September 30,

 

2009


2010


2009


2010

 








 

Revenues

$ 165,740


$ 132,247


$ 434,791


$ 392,992

 








 

EBITDA

$ 135,035


$ 116,081


$ 377,111


$ 356,397

 








 

Adjusted net income

$ 35,668


$ 12,561


$ 83,677


$ 53,638

 








 

Adjusted net income allocable to common shares

$ 35,060


$ 12,396


$ 82,295


$ 52,872

 

Per common share - Basic

$ 0.45


$ 0.16


$ 1.06


$ 0.67

 

Per common share - Diluted

$ 0.45


$ 0.16


$ 1.06


$ 0.67

 








 

Adjusted net income plus depreciation and amortization

$ 92,790


$ 72,467


$ 247,975


$ 231,867

 








 

Adjusted net income plus depreciation and amortization allocable to common shares

$ 91,208


$ 71,513


$ 243,880


$ 228,555

 

Per common share - Basic

$ 1.17


$ 0.91


$ 3.13


$ 2.91

 

Per common share - Diluted

$ 1.17


$ 0.91


$ 3.13


$ 2.91

 








 

Basic common shares outstanding

78,013


78,537


77,977


78,470

 

Diluted common shares outstanding

78,013


78,537


77,977


78,470

 

 
                 

Refer to the selected 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

September 30,


Nine Months Ended

September 30,

 

2009

2010


2009

2010

 






 

Net income

$ 33,458

$ 8,569


$ 79,500

$ 45,587

 

Depreciation

53,130

55,703


156,379

164,272

 

Amortization of net lease discounts and lease incentives

3,992

4,203


7,919

13,957

 

Interest, net

43,032

47,453


127,925

128,578

 

Income tax provision

1,423

153


5,388

4,003

 

EBITDA

$ 135,035

$ 116,081


$ 377,111

$ 356,397

 

 
           

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 Reconciliation

(Dollars in thousands)

(Unaudited)

 

 

Three Months Ended

September 30,


Nine Months Ended

September 30,

 

2009

2010


2009

2010

 






 

Net income

$ 33,458

$ 8,569


$ 79,500

$ 45,587

 

Ineffective portion and termination of cash flow hedges(1)

1,633

1,077


4,764

3,299

 

Mark to market of interest rate derivative contracts(2)

608

444


(556)

990

 

Accelerated write off of deferred financing fees

--

2,471


--

2,471

 

(Gain) loss on sale of flight equipment(2)

(162)

--


(162)

1,291

 

Loss on sale of debt investments(2)

131

--


131

--

 

Adjusted net income

35,668

12,561


83,677

53,638

 

Depreciation

53,130

55,703


156,379

164,272

 

Amortization of net lease discounts and lease incentives

3,992

4,203


7,919

13,957

 

Adjusted net income plus depreciation and amortization

$ 92,790

$ 72,467


$ 247,975

$ 231,867

 

 

(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

September 30, 2010


Nine Months Ended

September 30, 2010

 

Shares


Percent(2)


Shares


Percent(2)

 

Weighted average shares








 

Common shares outstanding - Basic

78,537


98.68 %


78,470


98.57 %

 

Unvested restricted common shares outstanding

1,048


1.32 %


1,137


1.43 %

 

Total weighted average shares outstanding

79,585


100.00 %


79,607


100.00 %

 








 

Common shares outstanding - Basic

78,537


100.00 %


78,470


100.00 %

 

Effect of dilutive shares(1)

--


--


--


--

 

Common shares outstanding - Diluted

78,537


100.00 %


78,470


100.00 %

 








 

Net income allocation








 

Net income

$8,569


100.00 %


$ 45,587


100.00 %

 

Distributed and undistributed earnings allocated to unvested restricted shares

(113)


(1.32)%


(651)


(1.43)%

 

Earnings available to common shares

$8,456


98.68 %


$ 44,936


98.57 %

 








 

Adjusted net income allocation








 

Adjusted net income

$12,561


100.00 %


$ 53,638


100.00 %

 

Amounts allocated to unvested restricted shares

(165)


(1.32)%


(766)


(1.43)%

 

Amounts allocated to common shares

$12,396


98.68 %


$ 52,872


98.57 %

 








 

Adjusted net income plus depreciation and amortization allocation








 

Adjusted net income plus depreciation and amortization

$72,467


100.00 %


$231,867


100.00 %

 

Amounts allocated to unvested restricted shares

(954)


(1.32)%


(3,312)


(1.43)%

 

Amounts allocated to common shares

$71,513


98.68 %


$228,555


98.57 %

 








 

(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

September 30, 2009


Nine Months Ended

September 30, 2009

 

Shares


Percent(2)


Shares


Percent(2)

 

Weighted average shares








 

Common shares outstanding - Basic

78,013


98.30 %


77,977


98.35 %

 

Unvested restricted common shares outstanding

1,353


1.70 %


1,309


1.65 %

 

Total weighted average shares outstanding

79,366


100.00 %


79,286


100.00 %

 








 

Common shares outstanding - Basic

78,013


100.00 %


77,977


100.00 %

 

Effect of dilutive shares(1)

--


--


--


--

 

Common shares outstanding - Diluted

78,013


100.00 %


77,977


100.00 %

 








 

Net income allocation








 

Net income

$33,458


100.00 %


$ 79,500


100.00 %

 

Distributed and undistributed earnings allocated to unvested restricted shares

(570)


(1.70)%


(1,313)


(1.65)%

 

Earnings available to common shares

$32,888


98.30 %


$ 79,187


98.35 %

 








 

Adjusted net income allocation








 

Adjusted net income

$35,668


100.00 %


$ 83,677


100.00 %

 

Amounts allocated to unvested restricted shares

(608)


(1.70)%


(1,382)


(1.65)%

 

Amounts allocated to common shares

$35,060


98.30 %


$ 82,295


98.35 %

 








 

Adjusted net income plus depreciation and amortization allocation








 

Adjusted net income plus depreciation and amortization

$92,790


100.00 %


$247,975


100.00 %

 

Amounts allocated to unvested restricted shares

(1,582)


(1.70)%


(4,095)


(1.65)%

 

Amounts allocated to common shares

$91,208


98.30 %


$243,880


98.35 %

 








 

(1) The Company had no dilutive common share equivalents for the periods presented.

(2) Percentages rounded to two decimal places.

 
                         

SOURCE Aircastle Limited