Aircastle Announces Fourth Quarter and Full Year 2012 Results

        Aircastle Announces Fourth Quarter and Full Year 2012 Results

Board Declares First Quarter 2013 Dividend of $0.165 Per Common Share

Highlights

--Lease rental revenue of $158.1 million and Adjusted EBITDA1 of $172.3
million for the fourth quarter, and $623.5 million and $647.6 million,
respectively, for the full year

--Net income of $29.8 million, or $0.43 per diluted common share for the
fourth quarter, and $32.9 million, or $0.46 per diluted common share, for the
full year

--Adjusted net income1 of $36.4 million, or $0.52 per diluted common share,
for the fourth quarter and $57.0 million, or $0.80 per diluted common share,
for the full year

--Fleet utilization of 99% for the fourth quarter and the full year, with
aircraft portfolio yield of 14% for both the fourth quarter and the full year

--Purchased five aircraft during the fourth quarter with a total cost of $235
million, and made 24 aircraft investments in 2012 with a total cost of $843
million

--Issued $500 million of 6.25% unsecured Senior Notes due 2019 during the
fourth quarter, and a total of $1.3 billion in unsecured notes during 2012

--Net book value of unencumbered aircraft at year end 2012 grew to $2.1
billion

--27th consecutive quarterly dividend declared by Aircastle's Board of
Directors

--Repurchased 1.6 million shares in late 2012 and early 2013 at a total cost
of $20 million, bringing the total number of shares repurchased during 2012
and thus far in 2013 to 4.1 million

PR Newswire

STAMFORD, Conn., Feb. 21, 2013



STAMFORD, Conn., Feb. 21, 2013 /PRNewswire/ -- Aircastle Limited (the
"Company" or "Aircastle") (NYSE: AYR) reported fourth quarter 2012 net income
of $29.8 million, or $0.43 per diluted common share and adjusted net income of
$36.4 million, or $0.52 per diluted common share. Net income for the year
ended December 31, 2012 was $32.9 million, or $0.46 per diluted common share,
and adjusted net income was $57.0 million, or $0.80 per diluted common share.
The fourth quarter results included total revenues of $176.6 million, an
increase of 13%, versus $156.9 million in the fourth quarter of 2011. For the
full year 2012 total revenues were $686.6 million, up 13% versus $605.2
million in 2011.

Commenting on the results, Ron Wainshal, Aircastle's CEO, stated: "Aircastle
continued to execute on its value-oriented growth strategy in 2012, finishing
the year with solid top line growth thanks to $843 million of investments and
99% portfolio utilization. We also continued to transform our balance sheet
by building the unencumbered asset base to over $2 billion in aircraft and
more than $600 million in unrestricted cash while pushing out the nearest debt
maturity to 2017. We demonstrated our strong standing in the capital markets,
where we raised $1.3 billion in unsecured debt during the year, including a
$500 million issue in late November, which provides us with attractive growth
capital for 2013. Looking ahead, we believe the market for new acquisitions
looks good and we will continue pursuing investment opportunities in a
disciplined way."

Michael Inglese, Aircastle's CFO, commented:"In addition to pursuing
accretive new investments, we remain committed to returning capital to our
shareholders. To that end, we repurchased $20 million of common shares under
our current $50 million program since October, bringing the total to $138.5
million repurchased since the beginning of 2011, at an average price of $11.87
per share. In addition, we increased our dividend 10% during the year for a
cumulative increase of 65% over the past eight quarters, reflecting the
Company's increased earnings base."

Fourth Quarter Results

Lease rental revenue for the fourth quarter was $158.1 million, up $8.2
million or 6% year over year, due primarily to the impact of new aircraft
acquisitions of $25.0 million, partially offset by lower revenue due to
aircraft sales of $5.2 million and the year over year impact of lease
extensions, transitions and terminations of $11.6 million.

Total revenues for the fourth quarter were $176.6 million, an increase of
$19.7 million, or 13% from the previous year, reflecting higher lease rental
revenue of $8.2 million, higher maintenance revenue of $4.2 million from a
year over year increase in transitions, and an increase in other revenues of
$8.0 million reflecting our purchase of a secured loan during the first
quarter of 2012 and revenue from finance leases, primarily from acquisitions
in 2012. 

Adjusted EBITDA for the fourth quarter was $172.3 million, up $10.5 million,
or 6% from the fourth quarter of 2011, due primarily to higher lease rental,
maintenance and other revenue totaling $20.5 million, partially offset by a
$7.4 million year-over year decline in gains from the sale of aircraft.

The fourth quarter 2012 results include aircraft impairment charges totaling
$7.7 million and primarily reflects the impairment of one A320-200 that came
off lease during the quarter for $6.7 million. These charges were largely
offset by end of lease maintenance revenue related to the impaired aircraft
totaling $7.5 million. 

Adjusted net income for the quarter was $36.4 million, down $6.0 million year
over year. The change reflects higher net revenues of $19.7 million that was
offset by higher aircraft impairment charges of $7.7 million, lower gains from
the sale of aircraft of $7.4 million, higher depreciation of $6.1 million,
higher selling, general and administrative costs of $2.1 million, and higher
adjusted interest expense of $1.9 million.

Full Year Results

Lease rental revenue for the full year was $623.5 million, up $43.3 million,
or 7% year over year, reflecting the net impact of aircraft acquisitions made
during 2012 and 2011 totaling $106.1 million, offset by lower lease rentals
due to aircraft sales and disposals of $28.6 million and the impact of
transitions, extensions and terminations totaling $34.2 million.

Total revenues for 2012 were $686.6 million, an increase of $81.4 million, up
13% from the previous year. The increase reflects higher lease rental revenue
of $43.3 million, higher maintenance revenue of $16.4 million, lower
amortization of net lease discounts and lease incentives of $3.6 million,
higher revenues resulting from interest on our debt investments and finance
leases of $12.2 million, and an increase of $5.9 million in early termination
fees paid by lessees during 2012 versus 2011.

During the year we recorded maintenance revenue from 13 scheduled lease
terminations of $18.4 million versus $21.7 million for nine scheduled lease
terminations in 2011. In addition, we recorded $34.9 million of maintenance
revenue from 13 aircraft returned early in 2012 versus $15.3 million from
seven aircraft returned early in 2011. We recorded total non-cash impairment
charges of $96.5 million and $6.4 million in 2012 and 2011, respectively.

During 2012 we impaired 18 aircraft, and the total $96.5 million non-cash
charge was partially offset by maintenance and lease incentive revenue
associated with seven of these aircraft, in the amount of $27.7 million.

Adjusted EBITDA for the full year was $647.6 million, up 7% from $607.9
million in 2011, due primarily to higher lease rental, maintenance and other
revenues totaling $77.8 million, partially offset by a $33.3 million decrease
in gains from aircraft sold during 2012.

Adjusted net income for the full year was $57.0 million, down $88.0 million
year over year. The change reflects higher revenues of $81.4 million,
primarily offset by higher aircraft impairment charges of $90.0 million, lower
gains from the sale of aircraft of $33.3 million, higher depreciation of $27.8
million, and higher adjusted interest expense of $13.6 million.

Aviation Assets

During 2012, we acquired 24 aircraft investments for $843 million. We also
sold or disposed of eight aircraft, which resulted in a pre-tax gain of
approximately $5.7 million for the year.

As of December 31, 2012, Aircastle owned 159 aircraft having a net book value
of $4.8 billion.

                     Owned                  Owned               Owned

                     Aircraft as of         Aircraft as of      Aircraft as of

                     December31,          December31,       December31,

                     2010^(1)               2011^(1)            2012^(1)
Flight Equipment
Held for Lease ($    $      4,066           $    4,388          $   4,783
mils.)
Unencumbered Flight
Eqt. included in
Flight Eqt.          $      595             $    677            $   2,092
 Held for Lease ($
mils.)
Number of Aircraft   136                    144                 159
Number of
Unencumbered         18                     27                  72
Aircraft
Passenger Aircraft   67%                    69%                 71%
(% of NBV)
Freighter Aircraft   33%                    31%                 29%
(% of NBV)
Weighted Average
Fleet Age –          11.0                   10.9                10.7
 Combined (years)
^(2)
Weighted Average
Remaining Combined   4.7                    4.9                 5.0
 Lease Term
(years)^(3^)
Weighted Average
Fleet Utilization    99%                    99%                 99%
for the
 year ended^(4^)
Portfolio Yield for  14%                    14%                 14%
the year ended^(5^)
(1) Calculated using net book value of flight equipment held
for lease and net investment in finance leases at period end.

(2) Weighted average age (years) by net book value.
(3) Weighted average remaining lease term (years) by net book
value.
(4) Aircraft on-lease days as a percent of total days in period
weighted by net book value.
(5) Lease rental revenue for the period as a percent of the
average net book value of flight equipment held for lease for
the period.

Financing Update

During 2012 we raised approximately $1.6 billion of total debt financing,
including more than $730 million during the fourth quarter.

In December 2012, we closed a $150 million unsecured revolving credit facility
with Citibank, N.A., Goldman Sachs Bank USA, J.P. Morgan Chase Bank N.A. and
an affiliate of RBC Capital Markets, which has a three-year term scheduled to
expire in December 2015. This facility is currently undrawn.

In late November of 2012, Aircastle issued $500 million aggregate principal
amount of unsecured 6.25% Senior Notes due 2019. The proceeds will be used
for general corporate purposes, including the purchase of aviation assets.
The notes were issued at par value.

In April 2012, we closed an $800 million unsecured notes offering, consisting
of $500 million of 6.75% senior notes due 2017 and $300 million of 7.63%
senior notes due in 2020, both of which were issued at par. Aircastle used
the net proceeds from the offering to repay outstanding indebtedness under its
Term Financing No. 1 and the termination of associated interest rate
derivatives, with the balance used for general corporate purposes, including
the purchase of aviation assets.

During 2012, we entered into two 12 year term loans which are supported by
guarantees from Compagnie Francaise d'Assurance pour le Commerce Exterieur, or
COFACE, for the financing of two new Airbus Model A330-200 aircraft. The
borrowings under these financings at December31, 2012 had a weighted average
rate of interest equal to 3.22%.

Dividends and Share Repurchase Program

On February 18, 2013 Aircastle's Board of Directors declared a first quarter
2013 cash dividend on its common shares of $0.165 per share, payable on March
15, 2013 to shareholders of record on March 4, 2013. This is our 27^th
consecutive dividend. During 2012, Aircastle increased the dividend to common
shareholders to the current quarterly rate of $0.165 per share, a 10% increase
over the quarterly rate at the end of 2011.

Also during 2012, the Company's Board of Directors authorized the repurchase
of up to a total of $78.5 million of the Company's common shares. As of
February 20, 2013, under this authorization we repurchased 4.1 million shares
at a total cost of $48.5 million, including commissions. We have $30 million
remaining under the current authorization.

Conference Call

In connection with this earnings release, management will host an earnings
conference call on Thursday, February 21, 2013 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 (800) 946-0709 (from within the
U.S. and Canada) or (719) 457-2653 (from outside of the U.S. and Canada) ten
minutes prior to the scheduled start and referencing the passcode "5347970".

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 one month 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 1:00 P.M. Eastern time on Saturday, March 23, 2013 by dialing
(888) 203-1112 (from within the U.S. and Canada) or (719) 457-0820 (from
outside of the U.S. and Canada); please reference passcode "5347970."

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, 2012, Aircastle's aircraft portfolio consisted of 159 aircraft on
lease with 69 customers 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 EBITDA and Adjusted Net Income 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 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 report. 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 expectations include, but are not limited to, capital markets
disruption or volatility which could adversely affect our continued ability to
obtain additional capital to finance new investments or our working capital
needs; government fiscal or tax policies, general economic and business
conditions or other factors affecting demand for aircraft or aircraft values
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 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's filings with the Securities and Exchange Commission ("SEC"),
including as described in Item1A. "Risk Factors" and elsewhere in this
report. 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 report. Aircastle 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 Supplemental Financial Information accompanying this press release
for a reconciliation of GAAP to non-GAAP numbers.



Contact:
Frank Constantinople, SVP Investor Relations
Tel: +1-203-504-1063
fconstantinople@aircastle.com

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

Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)
                                                      December31,
                                                      2011         2012
ASSETS
Cash and cash equivalents                             $ 295,522    $ 618,217
Accounts receivable                                   3,646        5,625
Restricted cash and cash equivalents                  247,452      111,942
Restricted liquidity facility collateral              110,000      107,000
Flight equipment held for lease, net of accumulated   4,387,986    4,662,661
depreciation of $981,932 and $1,305,064
Net investment in finance leases                      —            119,951
Aircraft purchase deposits and progress payments      89,806       131
Other assets                                          90,047       186,633
Total assets                                          $ 5,224,459  $ 5,812,160
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Borrowings from secured financings (including
borrowings of ACS Ireland VIEs of $295,952 and        $ 2,535,759  $ 1,848,034
$207,926, respectively)
Borrowings from unsecured financings                  450,757      1,750,642
Accounts payable, accrued expenses and other          105,432      108,593
liabilities
Lease rentals received in advance                     46,105       53,189
Liquidity facility                                    110,000      107,000
Security deposits                                     83,037       87,707
Maintenance payments                                  347,122      379,391
Fair value of derivative liabilities                  141,639      61,978
Total liabilities                                     3,819,851    4,396,534
Commitments and Contingencies
SHAREHOLDERS' EQUITY
Preference shares, $.01par value, 50,000,000shares  —            —
authorized, no shares issued and outstanding
Common shares, $.01par value, 250,000,000shares
authorized, 72,258,472 shares issued and outstanding  723          686
at December31, 2011; and 68,639,729shares issued
and outstanding at December31, 2012
Additional paid-in capital                            1,400,090    1,360,555
Retained earnings                                     191,476      180,675
Accumulated other comprehensive loss                  (187,681)    (126,290)
Total shareholders' equity                            1,404,608    1,415,626
Total liabilities and shareholders' equity            $ 5,224,459  $ 5,812,160

Aircastle Limited and Subsidiaries

Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

(Unaudited)
                                    Three Months Ended    Twelve Months Ended
                                    December 31,          December 31,
                                    2011       2012       2011       2012
Revenues:
Lease rental revenue                $ 149,848  $ 158,090  $ 580,209  $ 623,503
Amortization of lease premiums,     (5,604)    (6,452)    (16,445)   (12,844)
discounts and lease incentives
Maintenance revenue                 11,948     16,194     36,954     53,320
Total lease rentals                 156,192    167,832    600,718    663,979
Other revenue                       746        8,778      4,479      22,593
Total revenues                      156,938    176,610    605,197    686,572
Expenses:
Depreciation                        63,804     69,896     242,103    269,920
Interest, net                       53,766     55,605     204,150    222,808
Selling, general and administrative
(including non-cash share based
payment expense of $1,094 and $999
for the three months ended, and     9,644      11,754     45,953     48,370
$5,786 and $4,232 for the twelve
months ended December 31, 2011 and
2012, respectively)
Impairment of Aircraft              -          7,667      6,436      96,454
Maintenance and other costs         2,333      2,713      13,277     14,656
Total expenses                      129,547    147,635    511,919    652,208
Other income (expense):
Gain on sale of flight equipment    10,134     2,685      39,092     5,747
Other                               (115)      (2)        (268)      602
Total other income (expense)        10,019     2,683      38,824     6,349
Income (loss) from continuing       37,410     31,658     132,102    40,713
operations before income taxes
Income tax provision                1,791      1,869      7,832      7,845
Net income (loss)                   $ 35,619   $ 29,789   $ 124,270  $ 32,868
Earnings (loss) per common share —
Basic:
Net income (loss) per share         $ 0.49     $ 0.43     $ 1.64     $ 0.46
Earnings (loss) per common share —
Diluted:
Net income (loss) per share         $ 0.49     $ 0.43     $ 1.64     $ 0.46
Dividends declared per share        $ 0.15     $ 0.165    $ 0.50     $ 0.615



Aircastle Limited and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)
                                                          Twelve Months Ended
                                                          December 31,
                                                          2011       2012
Cash flows from operating activities:
Net income                                                $ 124,270  $ 32,868
Adjustments to reconcile net income to net cash provided
by
 operating activities:
Depreciation                                              242,103    269,920
Amortization of deferred financing costs                  15,271     12,449
Amortization of net lease discounts and lease incentives  16,445     12,844
Deferred income taxes                                     5,615      6,828
Non-cash share based payment expense                      5,786      4,232
Cash flow hedges reclassified into earnings               23,078     30,777
Ineffective portion of cash flow hedges                   (101)      2,893
Security deposits and maintenance payments included in    (35,500)   (54,180)
earnings
Gain on sale of flight equipment                          (39,092)   (5,747)
Impairment of aircraft                                    6,436      96,454
Other                                                     742        (2,218)
Changes in certain assets and liabilities:
Accounts receivable                                       (4,818)    (2,530)
Restricted cash and cash equivalents related to operating            -
 activities                             4,418
                                                                     
Other assets                                              (2,675)    919
Accounts payable, accrued expenses and other liabilities  (1,848)    17,732
Lease rentals received in advance                         (753)      4,036
Net cash provided by operating activities                 359,377    427,277
Cash flows from investing activities:
Acquisition and improvement of flight equipment and lease (776,750)  (693,227)
incentives
Proceeds from sale of flight equipment                    489,196    61,489
Restricted cash and cash equivalents related to sale of
flight                                                    (35,762)   35,762
 equipment
Aircraft purchase deposits and progress payments          (122,069)  (20,553)
Net investment in finance leases                          -          (91,500)
Collections on finance leases                             -          3,852
Purchase of debt investment                               -          (43,626)
Principal repayments on debt investment                   -          6,585
Other                                                     (35)       (691)
Net cash used in investing activities                     (445,420)  (741,909)
Cash flows from financing activities:
Repurchase of shares                                      (91,610)   (44,180)
Proceeds from term debt financings                        669,047    1,459,690
Securitization and term debt financing repayments         (390,945)  (847,415)
Deferred financing costs                                  (20,179)   (31,691)
Restricted secured liquidity facility collateral          (35,000)   3,000
Secured liquidity facility collateral                     35,000     (3,000)
Restricted cash and cash equivalents related to financing (25,056)   99,748
activities
Security deposits received                                20,574     17,453
Security deposits returned                                (7,914)    (6,152)
Maintenance payments received                             122,050    142,122
Maintenance payments returned                             (89,300)   (57,822)
Payments for terminated cash flow hedges                  -          (50,757)
Dividends paid                                            (45,059)   (43,669)
Net cash (used in) provided by financing activities       141,608    637,327
Net increase (decrease) in cash and cash equivalents      55,565     322,695
Cash and cash equivalents at beginning of period          239,957    295,522
Cash and cash equivalents at end of period                $ 295,522  $ 618,217





Aircastle Limited and Subsidiaries

Supplemental Financial Information

(Amount in thousands, except per share amounts)

(Unaudited)
                            Three Months Ended           Twelve MonthsEnded

                            December 31,                 December 31,
                            2011            2012         2011       2012
Revenues                    $ 156,938       $ 176,610    $ 605,197  $ 686,572
EBITDA                      $ 160,584       $ 163,611    $ 594,800  $ 546,285
Adjusted EBITDA             $ 161,793       $ 172,279    $ 607,870  $ 647,622
Adjusted net income         $  42,400      $  36,372   $ 144,963  $  57,009
Adjusted net income         $  41,847      $  36,079   $ 143,130  $  56,539
allocable to common shares
Per common share - Basic    $    0.59    $         $       $   
                                            0.52         1.92       0.80
Per common share - Diluted  $    0.59    $         $       $   
                                            0.52         1.92       0.80
Basic common shares         71,407          69,120       74,686     70,717
outstanding
Diluted common shares       71,407          69,120       74,686     70,717
outstanding
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 and Adjusted EBITDA Reconciliation

(Dollars in thousands)

(Unaudited)
                                   Three Months Ended     Twelve Months Ended

                                   December 31,           December 31,
                                   2011       2012        2011       2012
Net income (loss)                  $ 35,619   $ 29,789    $ 124,270  $ 32,868
Depreciation                       63,804     69,896      242,103    269,920
Amortization of net lease          5,604      6,452       16,445     12,844
discounts and lease incentives
Interest, net                      53,766     55,605      204,150    222,808
Income tax provision               1,791      1,869       7,832      7,845
EBITDA                               160,584     163,611    594,800    546,285
Adjustments:
 Impairment of aircraft           -          7,667       6,436      96,454
 Non-cash share based payment     1,094      999         5,786      4,232
expense
 Loss (gain) on mark to market of 115        2           848        (597)
interest rate derivative contracts
 Contract termination expense     -          -           -          1,248
Adjusted EBITDA                    $ 161,793  $ 172,279   $ 607,870  $ 647,622

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. We define Adjusted EBITDA as EBITDA (as defined
above) further adjusted to give effect to adjustments required in calculating
covenant ratios and compliance as that term is defined in the indenture
governing our senior unsecured notes. Adjusted EBITDA is a material component
of these covenants.

Aircastle Limited and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Adjusted Net Income Reconciliation

(Dollars in thousands)

(Unaudited)
                                      Three Months Ended   Twelve Months Ended

                                      December 31,         December 31,
                                      2011      2012       2011       2012
Net income (loss)                     $ 35,619  $ 29,789   $ 124,270  $ 32,868
Ineffective portion and termination
of                                    5,572     1,053      8,407      2,893
 hedges^(1)
Mark to market of interest rate
derivative                            115       2          848        (597)
 contracts^(2)
 Loan termination payment^(1) -         -          3,196      -
 Write-off of deferred        -         120        2,456      3,034
financing fees^(1)
Stock compensation expense^(3)        1,094     999        5,786      4,232
 Term Financing No. 1 hedge
loss                                  -         4,409      -          13,331
 amortization charges^(1)
 Contract termination expense  -         -          -          1,248
Adjusted net income (loss)            $ 42,400  $ 36,372   $ 144,963  $ 57,009

(1) Included in Interest, net.
(2) Included in Other income (expense).
(3) Included in Selling, general and administrative expenses.
Beginning with the quarter ended March 31, 2012, management, to be more
consistent with reporting practices of peer aircraft leasing companies, has
revised the calculation of Adjusted Net Income ("ANI") to no longer exclude
gains (losses) on sales of assets, and to exclude non-cash share based payment
expense in the calculation of ANI. Beginning with our Quarterly Report for the
quarter ended June 30, 2012, we also excluded Term Financing No. 1 hedge loss
amortization charges which will be reported in Interest, net on our
consolidated statement of income from the calculation of ANI. The calculation
of ANI for the three months ended December 31, 2011 has been revised to be
comparable with the current period presentation.
Management believes that ANI, 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 and non-cash share based compensation.
However, ANI is not a measure 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    Twelve Months Ended

                                    December 31, 2012     December 31, 2012
Weighted-average shares:            Shares   Percent^(2)  Shares   Percent^(2)
                                                                   
Common shares outstanding – Basic   69,120   99.19%       70,717
                                                                   99.18%
                                                                   
Unvested restricted common shares   561      0.81%        588
                                                                   0.82%
Total weighted-average shares                                      
outstanding                         69,681   100.00%      71,305
                                                                   100.00%
Net income (loss) allocation
                                                                   
Net income (loss)                   $29,789  100.00%      $32,868
                                                                   100.00%
Distributed and undistributed                                      
earnings (loss) allocated to        (240)    (0.81%)      (271)
unvested restricted shares                                         (0.82%)
Earnings (loss) available to common                                
shares                              $29,549  99.19%       $32,597
                                                                   99.18%
Adjusted net income (loss)
allocation
                                                                   
Adjusted net income (loss)          $36,372  100.00%      $57,009
                                                                   100.00%
Amounts allocated to unvested                                      
restricted shares                   (293)    (0.81%)      (470)
                                                                   (0.82%)
                                                                   
Amounts allocated to common shares  $36,079  99.19%       $56,539
                                                                   99.18%
(1) For the three and twelve months ended December 31, 2012 the company had no
dilutive shares.
(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    Twelve Months Ended

                                   December 31, 2011     December 31, 2011
Weighted-average shares:           Shares   Percent^(2)  Shares    Percent^(2)
Common shares outstanding – Basic  71,407   98.70%       74,686    98.74%
Unvested restricted common shares  943      1.30%        957       1.26%
Total weighted-average shares      72,350   100.00%      75,643    100.00%
outstanding
Net income allocation
Net income                         $35,619  100.00%      $124,270  100.00%
Distributed and undistributed
earnings allocated to unvested     (464)    (1.30%)      (1,571)   (1.26%)
restricted shares
Earnings available to common       $35,155  98.70%       $122,699  98.74%
shares
Adjusted net income allocation
Adjusted net income                $42,400  100.00%      $144,963  100.00%
Amounts allocated to unvested      (553)    (1.30%)      (1,833)   (1.26%)
restricted shares
Amounts allocated to common shares $41,847  98.70%       $143,130  98.74%
(1) For the three and twelve months ended December 31, 2011 the company had no
dilutive shares.
(2) Percentages rounded to two decimal places.



SOURCE Aircastle Limited

Website: http://www.aircastle.com
 
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