8-K

UNITED STATES

SECURITIES AND EXCHANGE

COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)      February 22, 2008 (February 22, 2008)

Aircastle Limited

(Exact name of registrant as specified in its charter)

Bermuda	001-32959	98-0444035
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

c/o Aircastle Advisor LLC, 300 First Stamford Place, Stamford, Connecticut	06902
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code      (203) 504-1020

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 [  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 [  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 [  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 [  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

On February 22, 2008, Aircastle Limited announced financial results for its fourth quarter and year ended December 31, 2007 as described in the press release furnished hereto as Exhibit 99.1, which is incorporated herein by reference.

The information furnished pursuant to this Current Report on Form 8-K, including the exhibit hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the  Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibit 99.1 Press Release dated February 22, 2008 which is being furnished hereto pursuant to Item 2.02.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AIRCASTLE LIMITED

(Registrant)

/s/ David Walton

David Walton

Chief Operating Officer, General Counsel and Secretary

Date: February 22, 2008

EXHIBIT INDEX

Exhibit Number	Exhibit
99.1	Press Release dated February 22, 2008

EX-99.1

Exhibit 99.1

	FOR IMMEDIATE RELEASE
Contact: Julia Hallisey
Investor Relations Tel: +1-203-504-1063

Aircastle Announces Fourth Quarter and Full Year 2007 Results

Fourth Quarter and Full Year 2007 Highlights

-   Fourth quarter net income of $35.3 million, or $0.46 per diluted share, up 78.2% and 17.9%, respectively, from fourth quarter of 2006.  Net income for the fourth quarter included non-cash expenses of $43.4 million for depreciation and share-based payments and $1.3 million of income from discontinued operations.

-   Full year 2007 net income of $127.3 million, or $1.89 per diluted share, up 148.7% and 70.3%, respectively, compared to 2006.  Net income for the year included non-cash expenses of $133.1 million for depreciation and share-based payments and $12.9 million of income from discontinued operations.

-   Total revenues of $120.7 million for fourth quarter 2007 and $381.1 million for the full year, up 102.7% and 108.4%, respectively, compared to 2006.

-   Total owned aviation assets having an aggregate purchase price of $4.1 billion as of December 31, 2007, up 134.9% from December 31, 2006. Acquired 65 aircraft for $2.3 billion in 2007, including the acquisition of 24 aircraft in the fourth quarter.

-   Declared fourth quarter dividend of $0.70 per common share; a 7.7% increase over third quarter 2007 dividend and a 60.0% increase year over year.

Stamford, CT.  February 22, 2008 – Aircastle Limited (the “Company” or “Aircastle”) (NYSE: AYR) reported fourth quarter net income of $35.3 million (including non-cash expenses of $43.4 million for depreciation and share based payment expense), or $0.46 per diluted share, representing a 78.2% and a 17.9% increase, respectively, over fourth quarter 2006.  Income from continuing operations was $33.9 million for the fourth quarter 2007, or $0.44 per diluted share, up 77.9% and 15.8%, respectively, from fourth quarter 2006.  Fourth quarter revenue of $120.7 million increased 102.7% over fourth quarter 2006.

Net income for the year ended December 31, 2007 was $127.3 million (including non-cash expenses of $133.1 million for depreciation and share based payment expense), or $1.89 per diluted share, up

148.7% and 70.3%, respectively, over 2006.  Income from continuing operations was $114.4 million for the full year 2007, or $1.70 per diluted share, up 149.1% and 70.0%, respectively, over 2006 results.  Total revenue for the year was $381.1 million, up 108.4% from 2006.

Investments in Aviation Assets

As of December 31, 2007, Aircastle owned aviation assets having an aggregate purchase price of $4.1 billion, including 133 aircraft leased to 58 lessees located in 31 countries.  During 2007 Aircastle acquired $2.3 billion of aviation assets including 65 aircraft.  During the fourth quarter, 24 aircraft were acquired for $820.1 million.  In addition, Aircastle had outstanding commitments to acquire 23 aircraft for $1.6 billion as of December 31, 2007, of which 7 aircraft have been or will be acquired during 2008. As of December 31, 2007, all 133 of the Company’s aircraft were either on lease or undergoing the conversion process from passenger to freighter configuration, with both aircraft in conversion having signed, ten-year leases that will commence upon completion of the conversion process.

On June 20, 2007, Aircastle entered into an acquisition agreement under which the Company agreed to acquire fifteen new A330-200 freighter aircraft from Airbus SAS, as a launch customer. The new A330-200 freighter aircraft are scheduled for delivery between June 2010 and November 2011, with five scheduled for delivery in 2010.  Aircastle agreed to separate arrangements with Rolls-Royce PLC and Pratt & Whitney to acquire engines for these aircraft.

Aircastle’s CEO, Ron Wainshal, commented, “We’re very pleased with the results of our investment activities this year and have constructed a well diversified global portfolio of high utility assets. Moreover, we’ve capitalized on the continuing strength in aircraft demand by extending terms and signing and committing leases for nearly all of our placement needs for 2008 and have made significant progress on our 2009 placements.”

Capital Markets Activity

On February 5, 2008 Aircastle announced that a subsidiary company entered into a $300.0 million senior secured credit agreement with JPMorgan Chase Bank, N.A. and Calyon New York Branch.  This credit facility provides for loans to finance certain specified aircraft owned or to be acquired by affiliates of Aircastle.

During 2007, Aircastle successfully completed follow-on public equity offerings in February and October, raising gross proceeds of approximately $512.3 million and $349.3 million respectively.    Aircastle also closed its second securitization encompassing fifty-nine aircraft, issuing $1.17 billion of ACS 2007-1 Class G-1 Certificates, in June 2007.

Conference Call

In connection with this earnings release, management will host an earnings conference call on Friday, February 22, 2008 at 9:00 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 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 three months following the call.

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 7, 2008 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference passcode "34057276.”

About Aircastle Limited

Aircastle Limited is a global company that acquires, owns and leases high-utility commercial jet aircraft to airlines throughout the world. As of February 21, 2008 Aircastle had acquired and committed to acquire aviation assets having an aggregate purchase price equal to $4.2 billion and $1.5 billion, respectively, for a total of $5.7 billion.

Safe Harbor

Certain items in this press release 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, issue aircraft lease-backed securities or raise other long-term debt, pay and grow dividends, realize gains or income from our debt investments, obtain required licenses and governmental approvals, obtain favorable tax treatment, extend, modify or replace existing financing and increase revenues, earnings and EBITDA. Words such as ‘‘anticipate(s)’’, ‘‘expect(s)’’, ‘‘intend(s)’’, ‘‘plan(s)’’, ‘‘project(s)’’, ‘‘believe(s)’’, ‘‘will’’, ‘‘would’’, ‘‘should’’, ‘‘seek(s)’’, ‘‘estimate(s)’’ 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. Factors that could cause actual results to differ materially from Aircastle Limited's expectations include, but are not limited to, our customer concentration; our continued ability to obtain additional capital to finance our working capital needs and our growth and to refinance our short-term debt financings with longer-term debt financings; our ability to acquire aircraft at attractive prices; our continued ability to obtain favorable tax treatment in Bermuda, Ireland and other jurisdictions; our ability to pay or maintain dividends; our ability to lease aircraft at favorable rates; an adverse change in the value of our aircraft; the possibility that conditions to closing of certain transactions will not be satisfied; our ability to realize gains or income from, and to continue to finance, our debt investments; general economic conditions and economic conditions in the markets in which we operate; competitive pressures within the industry and/or markets in which we operate; the creditworthiness of our airline customers; interest rate fluctuations; margin calls on our interest rate hedges; our ability to obtain certain required licenses and approvals; the impact of future terrorist attacks or wars on the airline industry; our concentration of leases in certain geographical regions; and other risks detailed from time to time in Aircastle’s filings with the Securities and Exchange Commission (‘SEC”), including as disclosed in our 2006 Annual Report on Form 10-K and updated in our Quarterly Report on Form 10-Q filed on August 14, 2007, and in our other filings with the SEC.  Such forward-looking statements speak only as of the date of this press release. Aircastle expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

 Aircastle Limited and Subsidiaries

Consolidated Balance Sheets

(Dollars in thousands, except share data)

	December 31, 2006			December 31, 2007
				(unaudited)
ASSETS
Cash and cash equivalents	$	58,118		$	13,546
Accounts receivable		7,696			4,957
Debt investments		121,273			113,015
Restricted cash and cash equivalents		106,069			161,317
Flight equipment held for sale		31,280			—
Flight equipment held for lease, net of accumulated depreciation    of $64,111 and $189,737		1,559,365			3,807,116
Aircraft purchase deposits and progress payments		4,650			245,331
Leasehold improvements, furnishings and equipment, net of    accumulated depreciation of $694 and $1,335		1,506			1,391
Fair value of derivative assets		313			—
Other assets		28,433			80,969
Total assets	$	1,918,703		$	4,427,642
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Borrowings under credit facilities	$	442,660		$	798,186
Borrowings from securitizations		549,400			1,677,736
Accounts payable, accrued expenses and other liabilities		31,384			65,967
Dividends payable		22,584			55,004
Lease rentals received in advance		11,068			31,016
Repurchase agreements		83,694			67,744
Security deposits		39,767			74,661
Maintenance payments		82,914			208,363
Fair value of derivative liabilities		18,035			154,388
Total liabilities		1,281,506			3,133,065
Commitments and Contingencies
Shareholders’ Equity
Preference shares, $.01 par value, 50,000,000 shares authorized,    no shares issued and outstanding at December 31, 2006    and December 31, 2007		—			—
Common shares, $.01 par value, 250,000,000 shares authorized,    51,621,279 shares issued and outstanding at December 31, 2006;    and 78,574,657 shares issued and outstanding at December 31, 2007		516			786
Additional paid-in capital		630,154			1,468,140
Dividends in excess of earnings		(3,382	)		(48,960	)
Accumulated other comprehensive income (loss)		9,909			(125,389	)
Total shareholders’ equity		637,197			1,294,577
Total liabilities and shareholders’ equity	$	1,918,703		$	4,427,642

Aircastle Limited and Subsidiaries

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

	Three Months Ended December 31,				Years Ended December 31,
	2006		2007		2006		2007
	(unaudited)						(unaudited)
Revenues:
Lease rentals	$	57,048	$	117,729	$	173,605	$	369,876
Interest income		2,450		2,717		9,038		10,400
Other revenue		56		262		209		815
Total revenues		59,554		120,708		182,852		381,091
Expenses:
Depreciation		17,684		42,025		53,424		126,403
Interest, net		15,419		29,509		49,566		92,660
Selling, general and administrative (including non-cash share based payment expense of $1,166 and $1,398 for the three months ended and $8,895 and $6,674 for the years ended December 31, 2006 and 2007, respectively)		6,860		11,716		27,836		39,040
Other expenses		61		817		1,261		927
Total expenses		40,024		84,067		132,087		259,030
Income from continuing operations before income taxes		19,530		36,641		50,765		122,061
Income tax provision		465		2,723		4,845		7,658
Income from continuing operations		19,065		33,918		45,920		114,403
Earnings from discontinued operations, net of    income taxes		729		1,347		5,286		12,941
Net income	$	19,794	$	35,265	$	51,206	$	127,344
Basic earnings per share:
Income from continuing operations	$	0.38	$	0.44	$	1.00	$	1.71
Earnings from discontinued operations, net of income taxes		0.01		0.02		0.12		0.19
Net income per share	$	0.39	$	0.46	$	1.12	$	1.90
Diluted earnings per share:
Income from continuing operations	$	0.38	$	0.44	$	1.00	$	1.70
Earnings from discontinued operations, net of income taxes		0.01		0.02		0.11		0.19
Net income per share	$	0.39	$	0.46	$	1.11	$	1.89
Dividends paid per share	$	0.1940	$	0.65	$	0.70	$	2.1875
Weighted average shares used to compute basic earnings per share		50,802,537		76,514,226		45,758,242		67,177,528
Weighted average shares used to compute diluted earnings per share		51,092,298		76,778,606		46,051,999		67,417,802

Aircastle Limited and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in thousands)

	Years Ended December 31,
	2006			2007
				(unaudited)
Cash flows from operating activities
Net income	$	51,206		$	127,344
Adjustments to reconcile net income to net cash provided by operating activities   (inclusive of amounts related to discontinued operations):
Depreciation		56,629			127,164
Amortization of deferred financing costs		6,380			6,991
Amortization of lease premiums and discounts, and other related lease items		(3,705	)		(7,379	)
Deferred income taxes		2,341			(3,590	)
Accretion of purchase discounts on debt investments		(756	)		(849	)
Non-cash share based payment expense		8,895			6,674
Capitalized interest		—			(7,267	)
Cash flow hedges reclassified into earnings		(2,213	)		(4,849	)
Realized gain on derivative contract		—			(1,154	)
Ineffective portion of cash flow hedges		(814	)		171
Gain on the sale of flight equipment		(2,240	)		(11,566	)
Changes in certain assets and liabilities:
Accounts receivable		(4,581	)		2,739
Restricted cash and cash equivalents		(65,417	)		(55,248	)
Other assets		(634	)		(4,867	)
Accounts payable, accrued expenses and other liabilities		(255	)		12,896
Payable to affiliates		27			68
Lease rentals received in advance		4,827			19,948
Security deposits and maintenance payments		85,592			166,568
Net cash provided by operating activities		135,282			373,794
Cash flows from investing activities
Acquisition and improvement of flight equipment		(882,920	)		(2,321,237	)
Disposition of flight equipment held for sale		57,157			34,945
Aircraft purchase deposits and progress payments		(1,186	)		(163,433	)
Purchase of debt investments		(92,726	)		(15,251	)
Principal repayments on debt investments		3,606			20,801
Margin call payments on derivatives and repurchase agreements		(4,345	)		(104,121	)
Margin call receipts on derivatives and repurchase agreements		—			72,586
Leasehold improvements, furnishings and equipment		(506	)		(526	)
Net cash used in investing activities		(920,920	)		(2,476,236	)
Cash flows from financing activities
Issuance of common shares in public offerings, net		219,595			830,809
Issuance of common shares to Fortress, directors and employees		38,703			1,218
Repurchase of shares from Fortress, directors and employees		(36,932	)		(445	)
Proceeds from securitizations		560,000			1,170,000
Securitization repayments		(10,600	)		(41,664	)
Deferred financing costs		(19,434	)		(14,140	)
Credit facility borrowings		751,736			2,059,741
Credit facility repayments		(799,664	)		(1,800,141	)
Proceeds from repurchase agreements		76,007			1,967
Principal repayments on repurchase agreements		(978	)		(17,917	)
Proceeds from terminated cash flow hedges		16,142			8,944
Dividends paid		(30,762	)		(140,502	)
Net cash provided by financing activities		763,813			2,057,870
Net decrease in cash and cash equivalents		(21,825	)		(44,572	)
Cash and cash equivalents at beginning of period		79,943			58,118
Cash and cash equivalents at end of period	$	58,118		$	13,546

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