Aircastle Limited
Mar 5, 2010
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Aircastle Announces Fourth Quarter and Full Year 2009 Results

Fourth Quarter and Full Year Highlights

STAMFORD, Conn., March 5, 2010 /PRNewswire via COMTEX/ -- Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported fourth quarter net income of $23.0 million, or $0.29 per diluted common share, and adjusted net income of $21.1 million, or $0.27 per diluted common share. Net income for the year ended December 31, 2009 was $102.5 million, or $1.29 per diluted common share, and adjusted net income of $104.8 million, or $1.32 per diluted common share.

Commenting on the results, Ron Wainshal, Aircastle's CEO, stated, "Against the backdrop of unprecedented economic challenges in 2009, Aircastle expanded its customer base, grew unrestricted cash to $143 million, and maintained 98% utilization of its modern aircraft fleet. We entered 2010 in a stronger, more competitive position, poised to capitalize on growth opportunities, given our conservative capital structure, world-class team and a proven ability to originate deals and source capital. We are excited about the investment opportunities we see in the market today.

"In the fourth quarter, we continued to place aircraft on long-term leases and source new capital. We signed lease commitments for six new Airbus A330-200 aircraft delivering to South African Airways in 2011. With this placement, we have secured customers for 11 of our 12 new Airbus A330 orders. This transaction not only marked an important milestone for Aircastle, but it also served as further evidence of a recovery in aircraft leasing. Additionally, we completed our second ECA-supported A330-200 financing for an aircraft we delivered on long term lease to Avianca."

Fourth Quarter Results

Fourth quarter total revenues were $135.8 million, a decrease of $22.0 million from the fourth quarter 2008 and reflects lower maintenance revenue of $13.8 million due primarily to fewer lease terminations in the fourth quarter of 2009, and lower lease rental revenue of $9.3 million due principally to lease transitions and extensions.

EBITDA was $124.6 million, down $15.2 million from the fourth quarter 2008, and reflects lower lease rental revenue and maintenance revenue totaling $23.1 million, higher maintenance and other costs of $2.5 million and a one-time $4.0 million charge in connection with the termination of an engine purchase agreement related to our A330 program, partially offset by lower mark to market expense on our undesignated hedges of $10.9 million and gains from the sale of debt investments of $5.1 million.

Adjusted net income plus depreciation and amortization for the quarter was $77.5 million, down $24.1 million year over year, due primarily to lower lease rental revenue and maintenance revenue totaling $23.1 million.

Adjusted net income for the quarter was $21.1 million, down $25.5 million year over year, and primarily reflects lower total revenues of $22.0 million, higher depreciation expense of $3.2 million, and higher maintenance and other costs of $2.5 million partially offset by lower adjusted interest, net of $3.8 million.

Full Year 2009 Results

Total revenues for the year were $570.6 million, a decrease of $12.0 million from 2008. The year over year decrease resulted from lower lease rental revenue of $30.8 million, due principally to lease transitions and extensions including downtime, increased amortization of net lease discounts and lease incentives of $13.0 million, partially offset by higher end of lease maintenance revenue of $24.3 million and higher other revenues of $8.8 million due to lease termination payments received in 2009.

EBITDA for the year ended December 31, 2009 was $501.7 million, a decrease of $24.6 million and reflects higher maintenance and other costs of $15.4 million resulting primarily from early lease terminations, aircraft impairment charges of $18.2 million related to the early return of aircraft, and a $4.0 million charge related to an engine purchase agreement, all of which was partially offset by lower mark to market expense on our undesignated hedges of $12.4.

Adjusted net income plus depreciation and amortization for the year was $325.5 million, a decrease of $24.5 million and reflects higher maintenance and other costs of $15.4 million and aircraft impairment charges of $18.2 million, all of which was partially offset by lower adjusted interest, net of $9.5 million.

Adjusted net income was $104.8 million, a decrease of $45.3 million compared to full year 2008 due principally to lower total revenues of $12.0 million, higher maintenance and other costs of $15.4 million, aircraft impairment charges of $18.2 million, and higher depreciation expense of $7.7 million all of which was partially offset by lower adjusted interest, net of $9.5 million.

Aviation Assets

In December Aircastle took delivery of a second new Airbus A330-200 aircraft on long-term lease to Aerovias del Continente Americano ("Avianca"). This delivery was the second advancement of one of Aircastle's new A330 aircraft order positions and was funded with ECA-supported debt financing.

As of December 31, 2009, Aircastle owned 129 aircraft having a net book value of $3.8 billion.

                                                                Owned Aircraft
                                                                    as of
                                                                 December 31,
                                                                   2009(A)
                                                                   ------
    108 Passenger Aircraft                                           71%
    21 Freighter Aircraft(B)                                         29%
    Number of Lessees                                                60
    Number of Countries                                              33
    Weighted Average Remaining Lease Term (years)(B)                4.9
    Percentage of Aircraft Leased Outside U.S.                       90%
    Percentage of "Latest Generation" Aircraft                       88%
    Weighted Average Fleet Utilization during Q4 2009                99%
    Weighted Average Fleet Utilization for the year ended
     December 31, 2009                                               98%

(A) Percentages calculated using net book value.

(B) Includes one Boeing Model 737-400 aircraft which was being converted to freighter configuration and for which we have an executed lease with a carrier in Asia post-conversion and which we delivered in the first quarter of 2010.

Airbus A330 Program: Highlights

11 out of 12 aircraft successfully placed, as follows:

 

 

Conference Call

In connection with this earnings release, management will host an earnings conference call on Friday, March 5, 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 Fourth Quarter and Year End 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 Friday, March 19, 2010 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference passcode "54681916."

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 December 31, 2009 Aircastle's aircraft portfolio consisted of 129 aircraft and had 60 lessees located in 33 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 and lease aircraft, raise capital, pay dividends, and increase revenues, earnings and EBITDA 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 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)

                                                         December 31,
                                                         ------------
                                                        2008        2009
                                                        ----        ----
    ASSETS
    Cash and cash equivalents                        $80,947    $142,666
    Accounts receivable                                3,161       2,941
    Debt investments                                  14,349           -
    Restricted cash and cash equivalents             182,623     207,834
    Restricted liquidity facility collateral               -      81,000
    Flight equipment held for lease, net of
     accumulated depreciation of $371,591 and
     $586,537                                      3,837,543   3,812,970
    Aircraft purchase deposits and progress
     payments                                         68,923     141,144
    Leasehold improvements, furnishings and
     equipment, net of accumulated depreciation
     of $1,999 and $2,455                              1,174         802
    Other assets                                      62,852      65,155
                                                      ------      ------
      Total assets                                $4,251,572  $4,454,512
                                                  ==========  ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY
    LIABILITIES
    Borrowings from securitizations and term debt
     financings                                   $2,476,296  $2,464,560
    Accounts payable, accrued expenses and other
     liabilities                                      60,789      60,392
    Dividends payable                                  7,862       7,955
    Lease rentals received in advance                 28,463      34,381
    Liquidity facility                                     -      81,000
    Security deposits                                 65,307      82,533
    Maintenance payments                             224,288     253,175
    Fair value of derivative liabilities             276,401     179,279
                                                     -------     -------
      Total liabilities                            3,139,406   3,163,275
                                                   ---------   ---------

    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, 78,620,320 shares issued
     and outstanding at December 31, 2008; and
     79,550,421 shares issued and outstanding at
     December 31, 2009                                   786         796
    Additional paid-in capital                     1,474,455   1,479,995
    Retained earnings (deficit)                         (473)     70,294
    Accumulated other comprehensive loss            (362,602)   (259,848)
                                                    --------    --------
      Total shareholders' equity                   1,112,166   1,291,237
                                                   ---------   ---------
      Total liabilities and shareholders' equity  $4,251,572  $4,454,512
                                                  ==========  ==========

Aircastle Limited and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

                                    Three Months Ended         Year Ended
                                        December 31,          December 31,
                                        ------------          ------------
                                      2008       2009       2008       2009
                                      ----       ----       ----       ----
    Revenues:
    Lease rental revenue            $137,064   $127,776   $542,270   $511,459
    Amortization of net lease
     discounts and lease
     incentives                       (5,114)    (3,310)     1,815    (11,229)
    Maintenance revenue               24,885     11,117     34,460     58,733
                                      ------     ------     ------     ------
       Total lease rentals           156,835    135,583    578,545    558,963
    Interest income                      641        141      3,174      1,924
    Other revenue                        306         70        868      9,698
                                         ---        ---        ---      -----
       Total revenues                157,782    135,794    582,587    570,585
                                     -------    -------    -------    -------

    Expenses:
    Depreciation                      49,919     53,102    201,759    209,481
    Interest, net                     57,087     41,885    203,529    169,810
    Selling, general and
     administrative (including
     non-cash share based
     payment expense of $1,657
     and $1,739 for the three
     months ended, and $6,529
     and $6,868 for the year ended
     December 31, 2008 and 2009,
     respectively)                    12,322     12,725     46,806     46,016
    Impairment of aircraft                 -          -          -     18,211
    Maintenance and other costs        1,849      4,317      3,982     19,431
                                       -----      -----      -----     ------
       Total expenses                121,177    112,029    456,076    462,949
                                     -------    -------    -------    -------

    Other income (expense):
     Gain on sale of aircraft            627      1,000      6,525      1,162
     Other                            (9,614)     1,499    (10,204)     2,354
                                      ------      -----    -------      -----
       Total other income (expense)   (8,987)     2,499     (3,679)     3,516
                                      ------      -----     ------      -----

    Income from continuing
     operations before income taxes   27,618     26,264    122,832    111,152
    Income tax provision               2,879      3,272      7,541      8,660
                                       -----      -----      -----      -----
    Net income                       $24,739    $22,992   $115,291   $102,492
                                     =======    =======   ========   ========


    Earnings per common share-Basic    $0.31      $0.29      $1.47      $1.29
                                       =====      =====      =====      =====

    Earnings per common share-Diluted  $0.31      $0.29      $1.47      $1.29
                                       =====      =====      =====      =====

    Dividends declared per share       $0.10      $0.10      $0.85      $0.40
                                       =====      =====      =====      =====

Aircastle Limited and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands)

                                                      Year Ended December 31,
                                                       --------------------
                                                        2008          2009

    Cash flows from operating activities:
    Net income                                       $115,291      $102,492
    Adjustments to reconcile net income to net
     cash provided by operating activities
     (inclusive of amounts related to discontinued
     operations)
    Depreciation                                      201,759       209,481
    Amortization of deferred financing costs           13,603        12,232
    Amortization of net lease discounts and lease
     incentives                                        (1,815)       11,229
    Deferred income taxes                               4,913         6,176
    Accretion of purchase discounts on debt
     investments                                         (579)         (469)
    Non-cash share based payment expense                6,529         6,868
    Cash flow hedges reclassified into earnings        16,491        12,894
    Ineffective portion of cash flow hedges            16,623           463
    Security deposits and maintenance payments
     included in earnings                             (37,885)      (47,934)
    Gain on the sale of flight equipment               (6,525)       (1,162)
    Loss (gain) on sale of debt investments               245        (4,965)
    Impairment of aircraft                                  -        18,211
    Other                                              11,445          (959)
    Changes on certain assets and liabilities:
    Accounts receivable                                 1,439           364
    Restricted cash and cash equivalents              (21,306)      (25,211)
    Other assets                                          559        (1,796)
    Accounts payable, accrued expenses and other
     liabilities                                        3,564        (3,189)
    Payable to affiliates                                (200)            -
    Lease rentals received in advance                  (2,345)        6,086
                                                       ------         -----
    Net cash provided by operating activities         321,806       300,811
                                                      -------       -------

    Cash flows from investing activities:
    Acquisition and improvement of flight
     equipment                                       (264,586)     (215,117)
    Proceeds from sale of flight equipment            180,112        11,601
    Aircraft purchase deposits and progress
     payments, net of returned deposits                 9,545       (83,081)
    Principal repayments on debt investments           11,801         3,786
    Proceeds from sale of debt investments             65,335        13,461
    Collateral call payments on derivatives and
     repurchase agreements                           (404,012)            -
    Collateral call receipts on derivatives and
     repurchase agreements                            439,892             -
    Leasehold improvements, furnishings and
     equipment                                           (447)          (84)
                                                         ----           ---
    Net cash provided by (used in) investing
     activities                                        37,640      (269,434)
                                                       ------      --------

    Cash flows from financing activities:
    Repurchase of shares from Fortress, directors
     and employees                                     (1,270)         (262)
    Proceeds from securitizations and term debt
     financings                                       992,715       142,228
    Securitization and term debt financing
     repayments                                      (194,155)     (153,964)
    Credit facility borrowings                        482,723             -
    Credit facility repayments                     (1,280,909)            -
    Deferred financing costs                          (24,183)       (6,127)
    Restricted secured liquidity facility
     collateral                                             -       (81,000)
    Secured liquidity facility collateral                   -        81,000
    Principal repayments on repurchase agreements     (67,744)            -
    Security deposits and maintenance payments
     received                                         106,096       136,381
    Security deposits and maintenance payments
     returned                                         (37,308)      (53,524)
    Payments for terminated cash flow hedges         (154,064)       (2,758)
    Dividends paid                                   (113,946)      (31,632)
                                                     --------       -------
    Net cash (used in) provided by financing
     activities                                      (292,045)       30,342
                                                     --------        ------

    Net increase in cash and cash equivalents          67,401        61,719
    Cash and cash equivalents at beginning of year     13,546        80,947
                                                       ------        ------
    Cash and cash equivalents at end of year          $80,947      $142,666
                                                      =======      ========

Aircastle Limited and Subsidiaries

Supplemental Financial Information

(Amount in thousands, except per share amounts)

(Unaudited)

                                        Three Months Ended      Year Ended
                                           December 31,        December 31,
                                           ------------        ------------
                                          2008      2009      2008      2009
                                          ----      ----      ----      ----

    Revenues                            $157,782  $135,794  $582,587  $570,585

    EBITDA                              $139,738  $124,561  $526,305  $501,672

    Adjusted net income                  $46,630   $21,116  $150,046  $104,793

    Adjusted net income allocable to
     common shares                       $46,071   $20,751  $148,337  $103,052
       Per common share - Basic            $0.59     $0.27     $1.91     $1.32
       Per common share - Diluted          $0.59     $0.27     $1.91     $1.32

    Adjusted net income plus
     depreciation and amortization      $101,663   $77,528  $349,990  $325,503

    Adjusted net income plus
     depreciation and amortization
     allocable to common shares         $100,444   $76,188  $346,003  $320,095
       Per common share - Basic            $1.29     $0.98     $4.45     $4.10
       Per common share - Diluted          $1.29     $0.98     $4.45     $4.10

    Basic common shares outstanding       77,769    78,013    77,750    77,986
    Diluted common shares outstanding     77,769    78,013    77,750    77,986

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           Year Ended
                                   December 31,             December 31,
                                   ------------             ------------
                                  2008          2009     2008           2009
                                  ----          ----     ----           ----
    Net income                 $24,739       $22,992 $115,291       $102,492
    Depreciation                49,919        53,102  201,759        209,481
    Amortization of net lease
     discounts and lease
     incentives                  5,114         3,310   (1,815)        11,229
    Interest, net               57,087        41,885  203.529        169,810
    Income tax provision         2,879         3,272    7,541          8,660
                                 -----         -----    -----          -----
    EBITDA                    $139,738      $124,561 $526,305       $501,672
                              ========      ======== ========       ========

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         Year Ended
                                December 31,           December 31,
                                ------------           ------------
                              2008         2009       2008       2009
                              ----         ----       ----       ----
    Net income             $24,739      $22,992   $115,291   $102,492
    Ineffective portion
     and termination of
     cash flow hedges(1)    12,014          623     29,589      5,387
    Mark to market
     adjustment on
     undesignated
     derivatives(2)         10,504         (403)    11,446       (959)
    Gain on sale of
     flight equipment         (627)      (1,000)    (6,525)    (1,162)
    (Gain) loss on sale
     of debt
     investments(2)              -       (5,096)       245     (4,965)
    Termination of engine
     purchase
     agreement(2)                -        4,000          -      4,000
                               ---        -----        ---      -----
    Adjusted net income    $46,630      $21,116   $150,046   $104,793

    Depreciation            49,919       53,102    201,759    209,481
    Amortization of net
     lease discounts and
     lease incentives        5,114        3,310     (1,815)    11,229
                             -----        -----     ------     ------
    Adjusted net income
     plus depreciation
     and amortization     $101,663      $77,528   $349,990   $325,503
                          ========      =======   ========   ========

(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                Year  Ended
                          December 31, 2009             December 31, 2009
                          -----------------             -----------------
                        Shares       Percent(2)      Shares        Percent(2)
    Weighted average
     shares
    ----------------
    Common shares
     outstanding -
     Basic               78,013           98.27%       77,986          98.34%
    Unvested
     restricted
     common shares
     outstanding          1,372            1.73%        1,318           1.66%
                          -----            ----         -----           ----
    Total weighted
     average shares
     outstanding         79,385          100.00%       79,304         100.00%
                         ======          ======        ======         ======

    Common shares
     outstanding -
     Basic               78,013          100.00%       77,986         100.00%
    Effect of
     dilutive
     shares(1)                -               -             -              -
                            ---             ---           ---            ---
    Common shares
     outstanding -
     Diluted             78,013          100.00%       77,986         100.00%
                         ======          ======        ======         ======

    Net income
     allocation
    -----------
    Net income          $22,992          100.00%     $102,492         100.00%
    Distributed and
     undistributed
     earnings
     allocated to
     unvested
     restricted
     shares                (397)          (1.73)%      (1,703)         (1.66)%
                           ----          ------        ------         ------
    Earnings
     available to
     common shares      $22,595           98.27%     $100,789           98.34%
                        =======           =====      ========           =====

    Adjusted net
     income
     allocation
    ------------
    Adjusted net
     income             $21,116          100.00%     $104,793         100.00%
    Amounts allocated
     to unvested
     restricted
     shares                (365)         (1.73)%       (1,741)         (1.66)%
                           ----          -----         ------          -----
    Amounts allocated
     to common shares   $20,751           98.27%     $103,052          98.34%
                        =======           =====      ========          =====

    Adjusted net
     income plus
     depreciation and
     amortization
     allocation
    -----------------
    Adjusted net
     income plus
     depreciation and
     amortization       $77,528          100.00%     $325,503         100.00%
    Amounts allocated
     to unvested
     restricted
     shares              (1,340)         (1.73)%       (5,408)         (1.66)%
                         ------          -----         ------          -----
    Amounts allocated
     to common shares   $76,188           98.27%     $320,095          98.34%
                        =======           =====      ========          =====

(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              Year Ended
                         December 31, 2008          December 31, 2008
                         -----------------          -----------------
                        Shares    Percent(2)      Shares      Percent(2)
    Weighted average
     shares
    ----------------
    Common shares
     outstanding -
     Basic               77,769       98.80%      77,750         98.86%
    Unvested
     restricted
     common shares
     outstanding            944        1.20%         896          1.14%
                            ---        ----          ---          ----
    Total weighted
     average shares
     outstanding         78,712      100.00%      78,646        100.00%
                         ======      ======       ======        ======

    Common shares
     outstanding -
     Basic               77,769      100.00%      77,750        100.00%
    Effect of
     dilutive
     shares(1)                -           -            -             -
                            ---         ---          ---           ---
    Common shares
     outstanding -
     Diluted             77,769      100.00%      77,750        100.00%
                         ======      ======       ======        ======

    Net income
     allocation
    -----------
    Net income          $24,739      100.00%    $115,291        100.00%
    Distributed and
     undistributed
     earnings
     allocated to
     unvested
     restricted
     shares                (297)      (1.20)%     (1,313)        (1.14)%
                           ----      ------       ------        ------
    Earnings
     available to
     common shares      $24,442       98.80%    $113,978         98.86%
                        =======       =====     ========         =====

    Adjusted net
     income
     allocation
    ------------
    Adjusted net
     income             $46,630      100.00%    $150,046        100.00%
    Amounts allocated
     to unvested
     restricted
     shares                (559)      (1.20)%     (1,709)        (1.14)%
                           ----      ------       ------        ------
    Amounts allocated
     to common shares   $46,071       98.80%    $148,337         98.86%
                        =======       =====     ========         =====

    Adjusted net
     income plus
     depreciation and
     amortization
     allocation
    -----------------
    Adjusted net
     income plus
     depreciation and
     amortization      $101,663      100.00%    $349,990        100.00%
    Amounts allocated
     to unvested
     restricted
     shares              (1,219)      (1.20)%     (3,987)        (1.14)%
                         ------      ------       ------        ------
    Amounts allocated
     to common shares  $100,444       98.80%    $346,003         98.86%
                       ========       =====     ========         =====

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

(2) Percentages rounded to two decimal places.

SOURCE Aircastle Limited