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Article Excerpt
OPERATOR: Good afternoon. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Aircastle fourth quarter and year-end earnings call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. (Operator Instructions).
Thank you. Ms. Julia Hallisey, you may begin your conference.
JULIA HALLISEY, IR, AIRCASTLE LTD: Thank you, Ashley. Good afternoon, everyone. I would like to welcome all of you to the fourth quarter and full year 2008 earnings call for Aircastle Limited. Joining us today are Ron Wainshal, our Chief Executive Officer, and Michael Inglese, our Chief Financial Officer.
Before I turn the call over to Ron, I would like to mention that this call is being recorded, and the replay number is 800-642-1687 from within the US, or 706-645-9291 from outside of the US, with the replay passcode of 83496844. This call will also be available via webcast on our website at www.aircastle.com, in addition to the earnings release, and an accompanying PowerPoint presentation.
I would also like to point out that statements today which are not historical fact may be deemed forward-looking statements. Actual results may differ materially from the estimates or expectations expressed in those statements, and certain factors that could cause actual results to differ materially from Aircastle Limited's expectations, are detailed in our SEC reports. I direct you to Aircastle Limited's earnings release for the full forward-looking statement legend.
Now I would like to turn the call over to Ron.
RON WAINSHAL, CEO, AIRCASTLE LTD: Thanks, Julia. Thanks to everyone on the call for joining us. Let me start by giving you my top line assessment of Aircastle.
First our own fleet is now long term financed until at least 2013, a very significant advantage in today's market. Second, our cash position is good. We ended the year with $81 million in unrestricted cash, and operating cash flow remains strong, with cash flow from operations during 2008 coming in at nearly $322 million. Third, our diversified portfolio of modern aircraft is performing well. In fact utilization during the fourth quarter was 98%, and including signed letters of intent, we currently have only two aircraft left to place this year. We accomplished this with a top caliber team of professionals, experienced and adept at managing through downturns.
During the call I will go into greater detail, and cover Aircastle's performance during the fourth quarter of 2008 and our full year results. I will cover what we are doing now, and where we are going. Michael Inglese will then speak to our financial highlights, before we address your questions.
Despite the challenging backdrop, we had another strong quarter during Q4, with adjusted net income for the quarter coming in at $46.6 million. Adjusted net income plus depreciation, which we think of is an important cash flow measure for our Company, was $96.5 million, or $1.24 per share. For the full year, our adjusted net income was $150.9 million, which is up nearly 30% versus last year. This figure grows to nearly $353 million, or $4.53 per share, after adding back depreciation. Putting it in perspective our stock market capitalization, based on yesterday's closing share price, is about 64% of 2008 adjusted net income plus depreciation.
As I alluded to up front, I believe our biggest accomplishment during 2008 was completing nearly $1 billion in long term financings, in the face of a very tough credit market. So today our owned fleet is fully financed on a long term basis, and we have no remaining short-term debt. Our decision to stop making new investments commitments in late 2007 was the right one. During 2008 we made no new net investments as sales offset acquisitions that had been committed in the prior year.
As a result of these activities our fleet count went from 133 aircraft at the end of 2007, to 130 at the end of last year, and that is where it currently stands. We focused early on to address our 2008 placement needs, and also took care of most of our 2009 requirements on attractive terms, while successfully working through several restructurings. These actions kept our utilization rate high.
Turning to our current situation I am pleased to say at this point we only have two aircraft left to place this year, after taking into consideration signed letters of intent. As of December 31, the average remaining lease term for our entire portfolio stood at 5.1 years. We have signed leases and letters of intent for six out of the seven aircraft we took back following the Sterling bankruptcy in late October. Three of these aircraft are back in operation as we speak, and we expect the other three to be back in service over the next several weeks as well.
We are in active discussions with customers on the remaining two aircraft left to lease in 2009. That is the remaining Sterling 737-700, and an Airbus A319 whose lease...
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