Lessor Aircastle reported fourth quarter 2010 net income of $20.2 million and adjusted net income of $14.2 million, while its net income for the year ended December 31, 2010 was $65.8 million, and adjusted net income was $67.9 million.
Aircastle stated that its fourth quarter results included a gain of $8.4 million from the disposal of aircraft, as well as $2.5 million of hedge ineffectiveness charges in connection with aircraft sales.
“For our industry, 2010 was a watershed year during which demand for passenger and freight aircraft rose above pre-recession levels and growth rates returned to their long-term trajectory, buoyed by the strong performance of emerging markets,” said Ron Wainshal, Aircastle’s CEO. “We are encouraged by continuing improvements across key industry metrics including rising traffic levels and all-time high load factors while the supply of parked current generation aircraft remains very low.”
Wainshal added: “During the year, Aircastle delivered consistently strong portfolio performance and cash flow, and our financial results have only started to reflect the significant built-in asset growth of our $1.1 billion Airbus program and the investments made during the year. We are continuing to source promising investment opportunities and believe Aircastle is in a terrific position to capitalize on the industry’s healthy growth trends.
“We ended the year with $240 million in unrestricted cash, and our cash flows remain strong. Given our liquidity position and the fact that our stock is still trading well below book value, our board approved a $60 million share repurchase program. We believe repurchasing our shares is an excellent investment which complements our growth plans as well as our dividend policy.”
During 2010, Aircastle acquired 11 aircraft for approximately $500 million, including three Boeing 737-800 aircraft, two Boeing 747-400F production freighter aircraft and one Airbus A330-200F freighter aircraft, which were acquired during the fourth quarter. During last year, the lessor also executed four aircraft dispositions resulting in a net gain on disposition of approximately $7.1 million. In the first quarter of 2011, Aircastle completed the sale of four Boeing 737-400SF freighter aircraft and took delivery of one Airbus A330-200 passenger aircraft which is on lease to South African Airways.
During 2010, Aircastle secured new financing commitments totalling approximately $1.1 billion, including $700 million for an Airbus A330 Agreement which will benefit from an ECA guarantee provided by Compagnie Francaise d’Assurance pour le Commerce Exterieur, or COFACE. The lessor also completed its first senior unsecured notes offering with a private placement offering of 9.75% senior unsecured notes due in 2018, in an aggregate principal amount of $300 million. In September 2010, it also entered into a $50 million senior unsecured revolving credit facility which has a three-year term.
In February 2011, Aircastle entered into a $72.8 million twelve-year term loan with Sumitomo Mitsui Banking Corporation supported by a guarantee from COFACE for the financing of a new Airbus A330-200 passenger aircraft. This financing bears interest at a fixed rate of 3.7875%.