Aircastle Announces Fourth Quarter and Full Year 2013 Results

        Aircastle Announces Fourth Quarter and Full Year 2013 Results

Board Declares First Quarter 2014 Dividend of $0.20 Per Common Share

PR Newswire

STAMFORD, Conn., Feb. 25, 2014

STAMFORD, Conn., Feb. 25, 2014 /PRNewswire/ --

Highlights

  oOperating and finance lease revenue of $173.3 million for the fourth
    quarter and $661.1 million for the full year
  oNet income of $48.4 million, or $0.60 per diluted common share for the
    fourth quarter, and $29.8 million, or $0.40 per diluted common share, for
    the full year
  oAdjusted EBITDA^1 of $196.0 million for the fourth quarter and $717.2
    million for the full year
  oAdjusted net income^1 of $54.9 million, or $0.68 per diluted common share,
    for the fourth quarter and $59.3 million, or $0.80 per diluted common
    share, for the full year
  oFleet utilization of 99.5% for the fourth quarter and 98.7% for the full
    year, with aircraft portfolio yield of 13.6% for both the fourth quarter
    and the full year
  oPurchased eight aircraft during the fourth quarter for $472 million, and
    closed 25 aircraft investments in 2013 with a total cost of $1.45 billion
  oSold 22 aircraft during 2013 for $548 million; realized gain on sale of
    $37.2 million for the year
  oIssued $400 million of 4.625% unsecured Senior Notes due 2018 during the
    fourth quarter
  o31^st consecutive quarterly dividend declared by Aircastle's Board of
    Directors
  oEstablished a joint venture with Ontario Teachers' Pension Plan and we
    sold two A330 family aircraft to the joint venture in the fourth quarter

Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported fourth
quarter 2013 net income of $48.4 million, or $0.60 per diluted common share
and adjusted net income of $54.9 million, or $0.68 per diluted common share.
Net income for the year ended December 31, 2013 was $29.8 million, or $0.40
per diluted common share, and adjusted net income was $59.3 million, or $0.80
per diluted common share. The fourth quarter results included total revenues
of $192.0 million, an increase of 9%, versus $176.6 million in the fourth
quarter of 2012. For the full year 2013, total revenues were $708.6 million,
up 3% versus $686.6 million in 2012.

Commenting on the results, Ron Wainshal, Aircastle's CEO, stated, "Thanks to a
strong fourth quarter, 2013 was a successful and important year for Aircastle,
as we grew and upgraded our portfolio with $1.5 billion of investments and
significant and profitable asset sales, including many end-of-life aircraft.
We strengthened our shareholder base and capital structure through Marubeni's
strategic investment, a larger unencumbered asset base, several well priced
debt financings and an expanded unsecured revolver. Aircastle delivered
strong results including a full-year cash ROE of 12.1% and asset utilization
of nearly 99%. 

All in all, over the past twelve months I believe we significantly enhanced
the Company's competitive standing as a nimble and flexible value-oriented
investor. As we enter 2014, we remain well positioned to capitalize on a
robust acquisition pipeline, very attractive financial market conditions, a
terrific team and operating platform and an improving demand environment for
leased aircraft."

Fourth Quarter Results

Lease rental and finance lease revenues for the fourth quarter were $173.3
million, up $11.3 million or 7% year over year, due primarily to the impact of
new aircraft acquisitions of $33.5 million, partially offset by lower revenue
due to aircraft sales of $16.8 million and the net year over year impact of
lease extensions, transitions and terminations and other changes of $5.5
million.

Total revenues for the fourth quarter were $192.0 million, an increase of
$15.4 million, or 9% from the previous year, reflecting higher lease rental
and finance lease revenue of $11.3 million and higher maintenance revenue of
$9.2 million associated with a year over year increase in lease transitions.
These increases were partially offset by a decline in other revenues of $4.7
million reflecting early lease termination fees earned in the fourth quarter
of 2012 and the maturity of a debt investment in the first quarter of 2013.

Adjusted EBITDA for the fourth quarter was $196.0 million, up $23.7 million,
or 14% from the fourth quarter of 2012, due primarily to higher total revenues
excluding amortization of net lease discounts and incentives of $15.8 million
and higher gains from aircraft sales of $8.9 million. These improvements were
partially offset by an increase in net operating expenses of $1.2 million. 

Adjusted net income for the quarter was $54.9 million, up $18.5 million or
51%, year over year. The change reflects higher total revenues of $15.4
million, higher gains from the sale of aircraft of $8.9 million and lower
aircraft impairment charges of $2.7 million. These improvements were
partially offset by higher adjusted interest expense of $5.2 million, higher
depreciation of $2.6 million and higher net operating expenses of $1.2
million.

Full Year Results

Lease rental and finance lease revenues for the full year were $661.1 million,
up $29.2 million, or 5% year over year, reflecting the net impact of 41
aircraft acquisitions made during 2013 and 2012 totaling $103.0 million and
higher full year finance lease revenues of $7.8 million. These increases were
offset by lower lease rentals due to aircraft sales and disposals of $52.7
million and the impact of transitions, extensions and terminations and other
changes totaling $28.8 million.

Total revenues for 2013 were $708.6 million, an increase of $22.1 million, up
3% from the previous year. The increase reflects higher lease rental and
finance lease revenue of $29.2 million and higher maintenance revenue from
lease terminations of $15.0 million. These increases were partially offset by
an increase in the amortization of net lease discounts and lease incentives of
$19.6 million associated with fleet expansion, and $2.6 million of lower other
revenue, primarily from a debt investment which matured in the first quarter
of 2013.

During the year, we recorded maintenance revenue from seven scheduled lease
terminations of $20.6 million versus $18.4 million for five scheduled lease
terminations in 2012. In addition, we recorded $47.7 million of maintenance
revenue from ten aircraft returned ahead of schedule in 2013, versus $34.9
million from ten aircraft that were returned early in 2012.

We recorded total non-cash impairment charges of $117.3 million in 2013 versus
$96.5 million in 2012. The year over year increase was primarily driven by
impairment charges taken during the third quarter 2013 annual fleet review,
where we wrote down the value of six 747-400 converted freighters coming off
lease in 2014. To date, three of these six converted freighters have been
placed.

Adjusted EBITDA for the full year was $717.2 million, up $69.6 million or 11%
versus 2012, due primarily to higher total revenues excluding amortization of
net lease discounts and incentives of $41.6 million and higher gains from
aircraft sales of $31.5 million. These improvements were partially offset by
an increase in net operating expenses of $3.7 million. 

Adjusted net income for the full year was $59.3 million compared to $57.0
million in 2012, an increase of $2.3 million. Higher total revenues of $22.1
million, higher gains from sale of aircraft of $31.5 million and higher other
net income of $5.5 million were partially offset by higher aircraft impairment
charges of $20.9 million, higher adjusted interest expense of $15.9 million,
higher depreciation of $15.0 million, and higher SG&A, taxes and other
expenses, net of $5.1 million.

Aviation Assets

During 2013, we acquired 25 aircraft investments for $1.45 billion. We also
sold 22 aircraft for $548 million which resulted in a pre-tax gain of
approximately $37.2 million for the year.

As of December 31, 2013, Aircastle owned 162 aircraft having a net book value
of $5.2 billion.

                                Owned           Owned           Owned

                                Aircraft as of  Aircraft as of  Aircraft as of

                                December31,   December31,   December31,

                                2011^(1)        2012^(1)        2013^(1)
Flight Equipment Held for Lease $   4,388       $   4,783       $   5,190
($ mils.)
Unencumbered Flight Eqt.
included in Flight Eqt. Held    $   677         $   2,092       $   2,655
for Lease ($ mils.)
Number of Aircraft              144             159             162
Number of Unencumbered Aircraft 27              72              80
Passenger Aircraft (% of NBV)   69%             71%             81%
Freighter Aircraft (% of NBV)   31%             29%             19%
Weighted Average Fleet Age –    10.9            10.7            9.9
Combined (years)^(^2^)
Weighted Average Remaining
Combined Lease Term             4.9             5.0             5.0
(years)^(^3^)
Weighted Average Fleet
Utilization for the year        99%             99%             99%
ended^(^4^)
Portfolio Yield for the year    14%             14%             14%
ended^(5)



(1) Calculated using net book value of flight equipment held for lease and net
investment in finance leasesat 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 heldfor lease for the period.

2013 Financing Activity

During 2013, we raised approximately $971 million of capital, including the
following: 

  oIssuing 12,320,000 common shares to an affiliate of Marubeni Corporation,
    for gross proceeds of approximately $209 million, in the third quarter of
    2013. Combined with additional subsequent purchases of Aircastle common
    shares in the secondary market, as of February 14, 2014, Marubeni
    Corporation owned approximately 20% of Aircastle's issued and outstanding
    common shares.
  oIssuing $400 million in aggregate principal amount of unsecured 4.625%
    Senior Notes due 2018, in the fourth quarter of 2013.
  oEntering into $177 million of secured borrowings related to various
    aircraft.
  oIncreasing our unsecured revolving credit from $150 million to $335
    million, expanding the bank group from four to seven global financial
    institutions and extending the maturity of the facility to a three year
    term expiring in August 2016.This revolving credit facility is currently
    undrawn.

In February 2014, we repaid the outstanding amount, plus accrued interest and
fees, due under Securitization No. 1 and terminated the related swap for a
total cash payment of $255 million. In February 2014, we also raised $303
million in secured financing for two B777-300ER and one A330-200 aircraft we
acquired in 2013.

Joint Venture with Ontario Teachers' Pension Plan

In December 2013, Aircastle formed a joint venture to invest in leased
aircraft with an affiliate of Ontario Teachers' Pension Plan. The joint
venture's first investment is two Airbus A330 family aircraft manufactured in
2013 that we sold to the joint venture, also in December 2013.

Teachers' holds more than 5% of our common shares and, therefore, the joint
venture and the sale of the initial Airbus A330 family aircraft are related
party transactions under our related party policy. Accordingly, the formation
of the joint venture and the sale of these aircraft was submitted to, and
approved by, our Audit Committee under that policy.

Common Dividend

On February 21, 2014, Aircastle's Board of Directors declared a first quarter
2014 cash dividend on its common shares of $0.20 per share, payable on March
14, 2014 to shareholders of record on March 7, 2014. This is our 31^st
consecutive dividend. During 2013, Aircastle increased the dividend to common
shareholders to the current quarterly rate of $0.20 per share, a 21% increase
over the quarterly rate at the end of 2012.

Conference Call

In connection with this earnings release, management will host an earnings
conference call on Tuesday, February 25, 2014 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 (888) 556-4997 (from within the
U.S. and Canada) or (719) 457-2628 (from outside of the U.S. and Canada) ten
minutes prior to the scheduled start and referencing the passcode "6185816".

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 Thursday, March 27, 2014 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 "6185816".

About Aircastle Limited

Aircastle Limited acquires, leases and sells commercial jet aircraft to
airlines throughout the world. As of December 31, 2013, Aircastle's aircraft
portfolio consisted of 162 aircraft on lease with 64 customers located in 37
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 and
other factors affecting the creditworthiness of our airline customers and
their ability to continue to perform their obligations under our leases and
other risks detailed from time to time in Aircastle's filings with the SEC,
including as previously disclosed in Aircastle's 2012 Annual Report on Form
10-K, 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 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 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,
                                                    2012          2013
ASSETS
Cash and cash equivalents                           $ 618,217     $ 654,613
Accounts receivable                                 5,625         2,825
Restricted cash and cash equivalents                111,942       122,773
Restricted liquidity facility collateral            107,000       107,000
Flight equipment held for lease, net of accumulated
depreciation of $1,305,064 and                      4,662,661     5,044,410

$1,430,325
Net investment in finance leases                    119,951       145,173
Unconsolidated equity method investment             —             21,123
Aircraft purchase deposits                          131           10,000
Other assets                                        186,633       143,976
Total assets                                        $ 5,812,160   $ 6,251,893
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Borrowings from secured financings (including
borrowings of ACS Ireland VIEs of                   $ 1,848,034   $ 1,586,835

$207,926 and $152,545, respectively)
Borrowings from unsecured financings                1,750,642     2,150,527
Accounts payable, accrued expenses and other        108,593       111,661
liabilities
Lease rentals received in advance                   53,189        49,235
Liquidity facility                                  107,000       107,000
Security deposits                                   87,707        118,804
Maintenance payments                                379,391       442,432
Fair value of derivative liabilities                61,978        39,992
Total liabilities                                   4,396,534     4,606,486
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, 68,639,729 shares issued and
outstanding at December31, 2012; and               686           808
80,806,975shares issued and outstanding at
December31, 2013
Additional paid-in capital                          1,360,555     1,562,106
Retained earnings                                   180,675       158,398
Accumulated other comprehensive loss                (126,290)     (75,905)
Total shareholders' equity                          1,415,626     1,645,407
Total liabilities and shareholders' equity          $ 5,812,160   $ 6,251,893



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,
                                2012        2013        2012        2013
Revenues:
Lease rental revenue            $ 158,090   $ 169,273   $ 623,503   $ 644,929
Finance lease revenue           3,919       4,045       8,393       16,165
Amortization of lease premiums, (6,452)     (6,884)     (12,844)    (32,411)
discounts and lease incentives
Maintenance revenue             16,194      25,359      53,320      68,342
Total lease rentals             171,751     191,793     672,372     697,025
Other revenue                   4,859       195         14,200      11,620
Total revenues                  176,610     191,988     686,572     708,645
Expenses:
Depreciation                    69,896      72,476      269,920     284,924
Interest, net                   55,605      60,106      222,808     243,757
Selling, general and
administrative (including
non-cash share

based payment expense of $999
and $1,638 for the three months 11,754      14,139      48,370      53,436

ended, and $4,232 and $4,569
for the twelve months ended

December 31, 2012 and 2013,
respectively)
Impairment of Aircraft          7,667       4,971       96,454      117,306
Maintenance and other costs     2,713       2,167       14,656      13,631
Total expenses                  147,635     153,859     652,208     713,054
Other income:
Gain on sale of flight          2,685       11,619      5,747       37,220
equipment
Other                           (2)         1,116       602         6,132
Total other income              2,683       12,735      6,349       43,352
Income from continuing          31,658      50,864      40,713      38,943
operations before income taxes
Income tax provision            1,869       2,496       7,845       9,215
Earnings of unconsolidated      -           53          -           53
equity method investment
Net income                      $ 29,789    $ 48,421    $ 32,868    $ 29,781
Earnings per common share —
Basic:
Net income per share            $ 0.43      $ 0.60      $ 0.46      $ 0.40
Earnings per common share —
Diluted:
Net income per share            $ 0.43      $ 0.60      $ 0.46      $ 0.40
Dividends declared per share    $ 0.165     $ 0.20      $ 0.615     $ 0.695



Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
                                    Year Ended December31,
                                    2011           2012           2013
Cash flows from operating
activities:
Net income                          $   124,270    $    32,868    $ 29,781
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation                        242,103        269,920        284,924
Amortization of deferred financing  15,271         12,449         14,719
costs
Amortization of net lease discounts 16,445         12,844         32,411
and lease incentives
Deferred income taxes               5,615          6,828          4,416
Non-cash share based payment        5,786          4,232          4,569
expense
Net derivative loss reclassified    23,078         30,777         33,265
into earnings
Ineffective portion of cash flow    (101)          2,893          371
hedges
Security deposits and maintenance   (35,500)       (54,180)       (60,112)
payments included in earnings
Gain on the sale of flight          (39,092)       (5,747)        (37,220)
equipment
Impairment of aircraft              6,436          96,454         117,306
Earnings of unconsolidated equity   —              —              (53)
method investment, net of tax
Other                               742            (2,218)        (5,641)
Changes on certain assets and
liabilities:
Accounts receivable                 (4,818)        (2,530)        3,397
Restricted cash and cash
equivalents related to operating    4,418          —              —
activities
Other assets                        (2,675)        919            1,164
Accounts payable, accrued expenses  (1,848)        17,732         3,016
and other liabilities
Lease rentals received in advance   (753)          4,036          (2,276)
Net cash provided by operating      359,377        427,277        424,037
activities
Cash flows from investing
activities:
Acquisition and improvement of      (776,750)      (693,227)      (1,263,706)
flight equipment
Proceeds from sale of flight        489,196        61,489         568,045
equipment
Restricted cash and cash
equivalents related to sale of      (35,762)       35,762         —
flight equipment
Aircraft purchase deposits and
progress payments, net of returned
deposits and                        (122,069)      (20,553)       (6,094)

 aircraft sales deposits
Net investment in finance leases    —              (91,500)       (11,595)
Collections on finance leases       —              3,852          9,508
Unconsolidated equity method        —              —              (20,189)
investment and associated costs
Purchase of debt investment         —              (43,626)       —
Principal repayments on debt        —              6,585          42,001
investment
Other                               (35)           (691)          (903)
Net cash used in investing          (445,420)      (741,909)      (682,933)
activities
Cash flows from financing
activities:
Issuance of shares net of           (91,610)       (44,180)       197,437
repurchases
Proceeds from notes and term debt   669,047        1,459,690      563,230
financings
Securitization and term debt        (390,945)      (847,415)      (510,162)
financing repayments
Deferred financing costs            (20,179)       (31,691)       (10,865)
Restricted secured liquidity        (35,000)       3,000          —
facility collateral
Secured liquidity facility          35,000         (3,000)        —
collateral
Restricted cash and cash
equivalents related to security
deposits and                        (25,056)       99,748         (10,831)

 maintenance payments
Security deposits received          20,574         17,453         20,889
Security deposits returned          (7,914)        (6,152)        (5,104)
Maintenance payments received       122,050        142,122        179,789
Maintenance payments returned       (89,300)       (57,822)       (77,033)
Payments for terminated cash flow   —              (50,757)       —
hedges and payment for option
Dividends paid                      (45,059)       (43,669)       (52,058)
Net cash provided by financing      141,608        637,327        295,292
activities
Net increase in cash and cash       55,565         322,695        36,396
equivalents
Cash and cash equivalents at        239,957        295,522        618,217
beginning of year
Cash and cash equivalents at end of $  295,522   $  618,217   $ 654,613
year



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

                        December 31,                December 31,
                        2012          2013          2012          2013
Revenues                $ 176,610     $ 191,988     $ 686,572     $ 708,645
EBITDA                  $ 163,611     $ 190,383     $ 546,285     $ 600,088
Adjusted EBITDA         $ 172,279     $ 195,965     $ 647,622     $ 717,209
Adjusted net income     $  36,372    $  54,899    $  57,009    $  59,260
Adjusted net income
allocable to common     $  36,079    $  54,433    $  56,539    $  58,786
shares
Per common share -      $    0.52  $    0.68  $    0.80  $    0.80
Basic
Per common share -      $    0.52  $    0.68  $    0.80  $    0.80
Diluted
Basic common shares     69,120        80,154        70,717        73,653
outstanding
Diluted common shares   69,120        80,154        70,717        73,653
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,
                               2012        2013         2012        2013
Net income                     $ 29,789    $ 48,421     $ 32,868    $ 29,781
Depreciation                   69,896      72,476       269,920     284,924
Amortization of net lease      6,452       6,884        12,844      32,411
discounts and lease incentives
Interest, net                  55,605      60,106       222,808     243,757
Income tax provision           1,869       2,496        7,845       9,215
EBITDA                           163,611      190,383     546,285     600,088
Adjustments:
 Impairment of aircraft       7,667       4,971        96,454      117,306
 Non-cash share based payment 999         1,638        4,232       4,569
expense
 Loss (gain) on mark to
market of interest rate        2           (1,027)      (597)       (4,754)
derivative contracts
 Contract termination expense -           -            1,248       -
Adjusted EBITDA                $ 172,279   $ 195,965    $ 647,622   $ 717,209

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 (Loss) Reconciliation
(Dollars in thousands)
(Unaudited)
                                   Three Months Ended     Twelve Months Ended
                                                          December 31,
                                   December 31,
                                   2012       2013        2012       2013
                                   (Dollars in thousands)
Net income                         $ 29,789   $ 48,421    $ 32,868   $ 29,781
 Loan termination fee^(1)  -          -           -          2,954
Ineffective portion and            1,053      171         2,893      2,393
termination of hedges^(1)
Gain (loss) on mark to market of
interest rate derivative           2          (1,027)     (597)      (4,754)
contracts^(2)
 Write-off of deferred     120        -           3,034      3,975
financing fees^(1)
Stock compensation expense^(3)     999        1,638       4,232      4,569
 Term Financing No. 1 hedge 4,409      4,365       13,331     17,843
loss amortization charges^(1)
 Securitization No. 1 hedge -          1,331       -          2,499
loss amortization charges ^(1)
 Contract termination       -          -           1,248      -
expense
Adjusted net income                $ 36,372   $ 54,899    $ 57,009   $ 59,260
(1) Included in Interest, net.
(2) Included in Other income (expense).
(3) Included in Selling, general and administrative expenses.

Management believes that ANI, when viewed in conjunction with the Company's
results under USGAAP and the below reconciliation, provides useful
information about operating and period-over-period performance, and provides
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 gains or losses related to
flight equipment and debt investments.

Aircastle Limited and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Cash Earnings and Cash ROE
(Dollars in thousands)
(Unaudited)
                        2009       2010       2011       2012       2013
Net cash provided by    $ 327,641  $ 356,530  $ 359,377  $ 427,277  $ 424,037
operating activities
Collections on Finance  -          -          -          3,852      9,508
Leases
Gain on Sale of Flight  1,162      7,084      39,092     5,747      37,220
Equipment
Less: Depreciation    (209,481)  (220,476)  (242,103)  (269,920)  (284,924)
Cash Earnings           $ 119,322  $ 143,138  $ 156,366  $ 166,956  $ 185,841
Average Shareholder's   $1,201,702 $1,316,978 $1,373,663 $1,410,117 $1,530,516
Equity
Cash Earnings /
Average Shareholder's   9.9%       10.9%      11.4%      11.8%      12.1%
Equity



Note: Average Shareholder's Equity is the sum of the current and prior year
shareholder's equity divided by two. Management believes that the cash return
on equity metric (Cash ROE) when viewed in conjunction with the Company's
results under US 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 impacts related to
non-cash revenue and expense items and interest rate derivative accounting,
while recognizing the depreciating nature of our assets.



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, 2013       December 31, 2013
Weighted-average shares:        Shares    Percent^(2)   Shares    Percent^(2)
Common shares outstanding –     80,154    99.15%        73,653    99.20%
Basic
Unvested restricted common      686       0.85%         594       0.80%
shares
Total weighted-average shares   80,839    100.00%       74,247    100.00%
outstanding
Net income allocation
Net income                      $48,421   100.00%       $29,781   100.00%
Distributed and undistributed
earnings allocated to unvested  (411)     (0.85%)       (238)     (0.80%)
restricted shares
Earnings available to common    $48,010   99.15%        $29,543   99.20%
shares
Adjusted net income allocation
Adjusted net income             $54,899   100.00%       $59,260   100.00%
Amounts allocated to unvested
restricted                      (466)     (0.85%)       (474)     (0.80%)

shares
Amounts allocated to common     $54,433   99.15%        $58,786   99.20%
shares
(1) For the three and twelve months ended December 31, 2013, 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, 2012      December 31, 2012
Weighted-average shares:         Shares    Percent^(2)  Shares    Percent^(2)
Common shares outstanding –      69,120    99.19%       70,717       99.18%
Basic
Unvested restricted common       561       0.81%        588          0.82%
shares
Total weighted-average shares    69,681    100.00%      71,305       100.00%
outstanding
Net income allocation
Net income                       $29,789   100.00%      $32,868      100.00%
Distributed and undistributed
earnings allocated to unvested   (240)     (0.81%)      (271)        (0.82%)
restricted shares
Earnings available to common     $29,549   99.19%       $32,597      99.18%
shares
Adjusted net income (loss)
allocation
Adjusted net income              $36,372   100.00%      $57,009      100.00%
Amounts allocated to unvested    (293)     (0.81%)      (470)        (0.82%)
restricted shares
Amounts allocated to common      $36,079   99.19%       $56,539      99.18%
shares
(1) For the three and twelve months ended December 31, 2012, the company had
no dilutive shares.
(2) Percentages rounded to two decimal places.



SOURCE Aircastle Limited

Website: http://www.aircastle.com
 
Press spacebar to pause and continue. Press esc to stop.