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These excerpts taken from the AYR 10-K filed Mar 2, 2009. Related
Party Transactions
Prior to our initial public offering, substantially all of the
ownership interests in Aircastle were beneficially owned by our
employees and funds managed by affiliates of Fortress. In 2004,
Fortress committed to invest $400 million of equity in
Aircastle, all of which was drawn as of December 31, 2005.
On February 8, 2006, the Fortress funds contributed an
additional $36.9 million in exchange for 3,693,200 of our
common shares. On July 21, 2006, we returned the
$36.9 million to the Fortress funds in exchange for the
cancellation of 3,693,200 of our common shares.
In conjunction with the follow-on public offering of our common
shares on October 10, 2007, certain Fortress Shareholders
offered 11,000,000 secondary common shares in a public offering,
including 1,000,000 common shares from the selling Fortress
Shareholders pursuant to the underwriter’s option to cover
over-allotments. Following this offering, funds managed by the
Fortress Shareholders and certain officers of Fortress
Investment Group LLC beneficially owned approximately 38.9% of
the Company’s common shares. The Company did not receive
any funds from this secondary offering by the Fortress
Shareholders.
Related Party Transactions Prior to our initial public offering, substantially all of the ownership interests in Aircastle were beneficially owned by our employees and funds managed by affiliates of Fortress. In 2004, Fortress committed to invest $400 million of equity in Aircastle, all of which was drawn as of December 31, 2005. On February 8, 2006, the Fortress funds contributed an additional $36.9 million in exchange for 3,693,200 of our common shares. On July 21, 2006, we returned the $36.9 million to the Fortress funds in exchange for the cancellation of 3,693,200 of our common shares. In conjunction with the follow-on public offering of our common shares on October 10, 2007, certain Fortress Shareholders offered 11,000,000 secondary common shares in a public offering, including 1,000,000 common shares from the selling Fortress Shareholders pursuant to the underwriter’s option to cover over-allotments. Following this offering, funds managed by the Fortress Shareholders and certain officers of Fortress Investment Group LLC beneficially owned approximately 38.9% of the Company’s common shares. The Company did not receive any funds from this secondary offering by the Fortress Shareholders. This excerpt taken from the AYR 8-K filed Sep 26, 2007. Note 14. Related Party Transactions During 2004 and 2005, Fortress provided certain support services to Aircastle. These support services were primarily for payroll, benefits and administrative services and rent. Fortress requires Aircastle to reimburse it for costs incurred on behalf of Aircastle. These costs consist primarily of professional services and office supplies purchased from third parties. These expenses are charged to Aircastle at cost and are included in selling, general and administrative expenses in our consolidated statements of operations. Total costs of direct operating services were $1,098 in 2004; $311 in 2005 and $228 in 2006. Through December 31, 2006, Aircastle employees participated in various benefit plans sponsored by Fortress including a voluntary savings plan (“401(k) Plan”) and other health and benefit plans. Aircastle reimbursed Fortress $13, $155 and $627 in 2004, 2005 and 2006, respectively, for its costs under the 401(k)
F-21
Plan and the health and benefit plans. Aircastle also reimburses Fortress for matching contributions up to 3% of eligible earnings. At December 31, 2006, Aircastle accrued $113 in annual contributions for the 2006 plan year for our employees’ participation in the 401(k) Plan sponsored by Fortress. As of December 31, 2005 and 2006, $105 and $132, respectively, were payable to Fortress. In May 2006, two of our operating subsidiaries entered into service agreements to provide certain leasing, remarketing, administrative and technical services to a Fortress entity, with respect to four aircraft owned by the Fortress entity and leased to third parties. Our responsibilities include remarketing the aircraft for lease or sale, invoicing the lessees for expenses and rental payments, reviewing maintenance reserves, reviewing the credit of lessees, arranging for the periodic inspection of the aircraft, securing the return of the aircraft when necessary. The agreements also provide that the Fortress entity will pay us 3.0% of the collected rentals with respect to leases of the aircraft, plus expenses incurred during the service period and will pay us 2.5% of the gross sales proceeds from the sale of any of the aircraft plus expenses incurred during the service period. As of December 31, 2006, we had accrued $209 in fees due from the Fortress entity. The service agreements have an initial term which expires on December 31, 2008, but will continue thereafter unless one party terminates the agreement by providing the other with advance written notice. On August 10, 2006 we acquired an aircraft from an affiliate of one of the Fortress Shareholders for a purchase price of $11,063 which we believe represented fair value at the acquisition date. For the years ended December 31, 2005 and 2006, Aircastle paid $235 and $1,124, respectively for legal fees related to the establishment and financing activities of our Bermuda subsidiaries, and, for the years ended December 31, 2005 and 2006, Aircastle paid $155 and $120 for Bermuda corporate services related to our Bermuda companies to a law firm and a corporate secretarial services provider affiliated with a Bermuda resident director serving on certain of our subsidiaries” board of directors. The Bermuda resident director serves as an outside director of these subsidiaries. | EXCERPTS ON THIS PAGE:
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