AIRCASTLE LIMITED STAMFORD, Conn., Nov. 3, 2015 /PRNewswire/ --
Key Third Quarter Developments
-- Lease rental and finance lease revenue was $189.9 million, up 5.3%
-- Net loss was $(14.0) million, or $(0.17) per diluted share
-- Excluding the $66.0 million earnings impact from Malaysian Airline
System bankruptcy and older freighter exits, net income was $52.0
million, or $0.64 per share
-- Accelerated planned exit from freighters by agreeing or completing sale
of four aircraft and declaring six remaining older units to be on last
leases after which we expect to scrap them
-- Cash ROE was 14.5%, net cash interest margin was 9.2% and fleet
utilization was 99.9%
-- Acquired seven aircraft for $233 million; year to date purchased 32
aircraft for $1.0 billion
-- Sold eight aircraft for a net gain of $15.7 million; year to date sold
20 aircraft for a total net pre-tax contribution of $38.3 million
-- Declared $0.24 dividend per common share; our 38(th) consecutive
quarterly dividend
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported a third quarter 2015 net loss of $(14.0) million, or $(0.17) per diluted common share, and an adjusted net loss of $(9.7) million, or $(0.12) per diluted common share. The third quarter results included total revenues of $212.1 million, an increase of 19.4%, versus $177.6 million in the third quarter of 2014.
Commenting on the results, Ron Wainshal, Aircastle's CEO, stated "During the third quarter we took decisive measures to address the challenge presented by the Malaysian bankruptcy and to accelerate our planned exit from freighter investments. Notwithstanding the resulting impairments, our operating performance was excellent as evidenced by the 14.5% cash ROE and 99.9% utilization results."
Mr. Wainshal added, "Increased asset sales have been a key driver for our results as we've seized on robust investor demand for aircraft both to enhance our financial performance and to improve our portfolio quality considerably."
Mr. Wainshal concluded, "We continue to demonstrate the value of the Aircastle franchise and our distinct competitive positioning by originating an attractive flow of investments we believe will have an accretive long-term earnings profile. This capability, together with the improving quality of our assets and strong operating cash flows, gave us confidence to increase our dividend once again."
Note: Non-GAAP items reconciled in the Appendix.
Financial Results
(in
thousands,
except share
data) Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
---- ---- ---- ----
Total
Revenues $212,074 $177,596 $610,935 $580,345
Lease Rental
and Finance
Lease
Revenues $189,906 $180,349 $555,375 $545,799
Adjusted
EBITDA $216,311 $177,408 $621,133 $559,083
Net income
(loss) $(13,989 ) $19,151 $71,088 $28,064
Per common
share -
Diluted $(0.17 ) $0.24 $0.88 $0.35
Adjusted net
income
(loss) $(9,679 ) $26,545 $88,007 $87,497
Per common
share -
Diluted $(0.12 ) $0.33 $1.08 $1.08
Third Quarter Results
Total revenues were $212.1 million, an increase of $34.5 million, or 19.4%, from the previous year. The increase was driven by higher maintenance revenues of $19.9 million and higher lease rental and finance lease revenues of $9.6 million.
Lease rental and finance lease revenues during the third quarter were $189.9 million versus $180.3 million the prior year. The 5.3% increase reflects net year over year growth in the fleet and the impact from aircraft acquisitions, dispositions and lease extensions.
Adjusted EBITDA for the third quarter was $216.3 million, up 21.9%, or $38.9 million, versus the prior year's quarter and primarily reflects higher lease rental, finance lease and maintenance revenues of $29.5 million, and higher gains from aircraft sales of $4.3 million.
The net loss for the third quarter was $(14.0) million versus net income of $19.2 million the previous year. Higher total revenues of $34.5 million were offset by higher non-cash impairment charges of $58.0 million and higher depreciation charges of $9.8 million associated with net fleet growth and accelerated depreciation on three MD-11 freighters, two of which were sold during the third quarter.
The adjusted net loss for the quarter was $(9.7) million versus adjusted net income $26.5 million the prior year. Higher revenues of $34.5 million and higher gains from aircraft sales of $4.3 million were offset by higher non-cash aircraft impairment charges of $58.0 million year over year.
Aviation Assets
During the third quarter of 2015, we acquired seven aircraft for $233 million. We closed or committed to acquire five additional aircraft during the balance of 2015 for approximately $165 million. Year-to-date, we acquired or committed to acquire a total of 37 aircraft that will close in 2015, for approximately $1.2 billion. The 32 aircraft acquired during the first nine months of 2015 had a weighted average age of less than four years, an average lease term of more than nine years, and all but one were narrow-body aircraft.
During the third quarter of 2015, we completed the sale of eight aircraft, including two MD-11 freighter aircraft, one A330 and five mid-aged narrow-body aircraft. The total pre-tax impact from our third quarter sales activity was $15.7 million and gross proceeds were $111 million.
During the first three quarters of 2015, we sold twenty aircraft that generated a total pre-tax impact of $38.3 million and gross proceeds of $341 million. The weighted-average age of the aircraft sold was approximately 15 years.
During October, we completed several additional sales, including one 747-400 converted freighter, one older A330 and our last 767. These sales have been profitable, in aggregate. In addition, we concluded an agreement to sell our last remaining MD-11 freighter in January 2016 for an amount approximately equal to break-even.
2015 Aircraft Sales through September 30
($ in millions)
Aircraft Weighted Average Age Number of Aircraft Maintenance Revenue Gain (Loss) on Sale of
Type Flight Equipment Impairments Pre-Tax Impact
(years)
--- ------
Narrow-
bodies 14.4 14 $7.0 $30.6 $(5.3) $32.3
Wide-
bodies 15.8 4 - 12.8 - 12.8
Freighters 17.7 2 11.4 (0.4) (17.9) (6.8)
---- --- ---- ---- ----- ----
14.9 20 $18.4 $43.0 $(23.2) $38.3
Total
As of September 30, 2015, Aircastle owned 160 aircraft having a net book value of $6.0 billion. We also manage five aircraft with a net book value of nearly $500 million dollars on behalf of our joint venture with Ontario Teachers' Pension Plan.
Owned Owned
Aircraft as of Aircraft as of
September 30, September 30,
2015 2014
---- ----
Total
Flight
Equipment
Held for
Lease ($
mils.) $6,007 $5,304
Unencumbered
Flight
Equipment
Held for
Lease ($
mils.) $3,722 $2,924
Number of
Aircraft 160 140
Number of
Unencumbered
Aircraft 109 85
Passenger
Aircraft
(% of NBV) 88% 84%
Weighted
Average
Fleet Age
(years)((2)) 7.7 8.6
Weighted
Average
Remaining
Lease Term
(years)((3)) 5.9 5.0
Weighted
Average
Fleet
Utilization
for the
quarter
ended(4) 99.9% 100.0%
Portfolio
Yield for
the
quarter
ended(5) 12.7% 13.2%
Net Cash
Interest
Margin(6) 9.2% 9.9%
(1) Calculated using net book value of flight equipment held for lease and net investment in finance leases at period end.
(2) Weighted average age by net book value.
(3) Weighted average remaining lease term 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 held for lease for the period; quarterly information is annualized.
(6) Net Cash Interest Margin = Lease rental yield minus interest on borrowings, net of settlements on interest rate derivatives, and other liabilities / average NBV of flight equipment for the period calculated on a quarterly basis, annualized.
Annual Fleet Review & Impairments
During the third quarter of 2015, in connection with our annual fleet review, we determined each of our six remaining Boeing 747-400 converted freighter aircraft are now on last leases. We reduced our residual value assumptions for these aircraft and expect to scrap them following lease expiry. This resulted in an impairment of $34.6 million and $1.9 million of additional depreciation during Q3, partly offset by $6.0 million of maintenance and other revenues. This determination reflects the persisting glut of supply in the air cargo market. In addition, our older freighters were affected specifically by the imposition of age limits in certain countries and by lower utilization levels.
In September 2015, Malaysian Airline System ("MAS") informed us that they were rejecting the lease on our Boeing 777-200ER aircraft as part of their restructuring. Under the terms of our lease with MAS, we were due to receive $18 million in rent payments and another estimated $25 million in lease end return compensation. We repossessed the aircraft in early October 2015 and are currently evaluating our deployment alternatives. This aircraft, which was manufactured in 1998, is the only one of its type in our fleet and is the only aircraft we had on lease to MAS.
We reduced the carrying value of this 777-200ER aircraft to an amount equal to our best estimate of scrap value. While we haven't made a decision to dispose of the aircraft, this write-down was driven by weak overall demand for older wide-body aircraft, an increase in the supply of competing aircraft and the difficulty of recovering high redeployment costs given the proliferation of aircraft age limits across the world. This write-down resulted in an impairment of $37.8 million, partly offset by a $1.2 million letter of credit we drew following the lease rejection. We will pursue remedies to recover amounts due to us.
Breakdown of Third Quarter Results
($ in millions
except per Q3:15 Results 747 Freighters MAS Bankruptcy Adjusted Q3:15 Results
share amounts)
-------------
Revenues
Lease Rentals $188.0 $0.2 $ $187.9
Maintenance /
Other Revenues 24.0 5.9 1.2 17.0
---- --- --- ----
Total Revenues 212.1 6.0 1.2 204.8
Operating
Expenses
Depreciation 85.3 1.9 83.4
Aircraft
Impairment
Charges 78.4 34.6 37.8 6.1
All Other
Expenses 76.9 76.9
---- ----
Total Operating
Expenses 240.7 36.5 37.8 166.4
Other Income
(Expense)
Gain on Sale of
Flight Equipment 15.7 15.7
All Other Income
(Expense) 0.1 0.1
--- ---
Total Other
Income (Expense) 15.8 15.8
Pre-Tax Income (12.8) (30.4) (36.6) 54.2
Income Taxes (2.7) 1.0 (3.7)
Joint Venture
Income 1.6 1.6
Net Income (Loss) $(14.0) $(29.4) $(36.6) $52.0
====== ====== ====== =====
Per Share $(0.17) $(0.36) $(0.45) $0.64
====== ====== ====== =====
ANI Per Share $(0.12) $(0.36) $(0.45) $0.69
====== ====== ====== =====
Common Dividend
On October 30, 2015, Aircastle's Board of Directors declared a fourth quarter 2015 cash dividend on its common shares of $0.24 per share, payable on December 15, 2015 to shareholders of record on November 30, 2015. This is our 38(th) consecutive dividend and represents a 9% increase over the previous quarter's cash dividend. Since 2010, Aircastle has increased the dividend six times.
Conference Call
In connection with this earnings release, management will host an earnings conference call on Tuesday, November 3, 2015 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) 417-8533 (from within the U.S. and Canada) or (719) 325-2354 (from outside of the U.S. and Canada) ten minutes prior to the scheduled start and referencing the passcode "9463401".
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, December 3, 2015 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 "9463401".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet aircraft to airlines throughout the world. As of September 30, 2015, Aircastle's aircraft portfolio consisted of 160 aircraft on lease with 51 customers located in 32 countries.
Safe Harbor
All statements included or incorporated by reference in this Press Release (this "Release"), other than characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are 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 our historical performance and that of our subsidiaries and on our current plans, estimates and expectations 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 such forward-looking statements which are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this Release. These risks or uncertainties include, but are not limited to, those described from time to time in Aircastle's filings with the SEC and previously disclosed under "Risk Factors" in Item 1 A of Aircastle's 2014 Annual Report on Form 10-K and our Form 10-Q filed for the quarter ended June 30, 2015, and elsewhere in this Release. 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 Release. Aircastle expressly disclaims any obligation to revise or update publicly any forward-looking statement to reflect future events or circumstances.
Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)
September 30, December 31,
2015 2014
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $149,041 $169,656
Accounts receivable 3,046 3,334
Restricted cash and cash
equivalents 84,258 98,884
Restricted liquidity facility
collateral 65,000 65,000
Flight equipment held for
lease, net of accumulated
depreciation of $1,403,443
and $1,294,063, respectively 5,885,807 5,579,718
Net investment in finance
leases 120,882 106,651
Unconsolidated equity method
investment 49,131 46,453
Other assets 131,231 105,450
------- -------
Total assets $6,488,396 $6,175,146
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Borrowings from secured
financings, net of debt
issuance costs $1,277,361 $1,373,131
Borrowings from unsecured
financings, net of debt
issuance costs 2,717,859 2,371,456
Accounts payable, accrued
expenses and other
liabilities 154,209 140,863
Lease rentals received in
advance 60,447 53,216
Liquidity facility 65,000 65,000
Security deposits 114,594 117,689
Maintenance payments 338,515 333,456
------- -------
Total liabilities 4,727,985 4,454,811
--------- ---------
Commitments and Contingencies
SHAREHOLDERS' EQUITY
Preference shares, $.01 par
value, 50,000,000 shares
authorized, no shares issued
and outstanding - -
Common shares, $.01 par value,
250,000,000 shares
authorized, 81,181,495 shares
issued and outstanding at
September 30, 2015; and
80,983,249 shares issued and
outstanding at December 31,
2014 812 810
Additional paid-in capital 1,567,692 1,565,180
Retained earnings 210,310 192,805
Accumulated other
comprehensive loss (18,403) (38,460)
------- -------
Total shareholders' equity 1,760,411 1,720,335
--------- ---------
Total liabilities and
shareholders' equity $6,488,396 $6,175,146
========== ==========
Aircastle Limited and Subsidiaries
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
---- ---- ---- ----
Revenues:
Lease rental revenue $188,038 $178,886 $550,023 $536,452
Finance lease revenue 1,868 1,463 5,352 9,347
Amortization of lease
premiums, discounts and
lease incentives (2,113) (1,075) (10,288) (7,252)
Maintenance revenue 15,726 (4,189) 55,148 35,035
------ ------ ------ ------
Total lease revenue 203,519 175,085 600,235 573,582
Other revenue 8,555 2,511 10,700 6,763
----- ----- ------ -----
Total revenues 212,074 177,596 610,935 580,345
------- ------- ------- -------
Operating expenses:
Depreciation 85,324 75,519 237,538 225,230
Interest, net 60,381 56,794 184,063 181,551
Selling, general and
administrative
(including non-cash
share based payment
expense of $1,424 and
$949 for the three
months ended and $3,981
and $3,167 for the nine
months ended September
30, 2015 and 2014,
respectively) 14,032 13,817 42,663 41,818
Impairment of Aircraft 78,403 20,436 102,358 67,005
Maintenance and other
costs 2,520 713 9,126 5,222
----- --- ----- -----
Total expenses 240,660 167,279 575,748 520,826
------- ------- ------- -------
Other income (expense):
Gain on sale of flight
equipment 15,679 11,390 43,034 13,384
Loss on extinguishment of
debt - - - (36,570)
Other 70 1 341 758
Total other income
(expense) 15,749 11,391 43,375 (22,428)
------ ------ ------ -------
Income (loss) from
continuing operations
before income taxes (12,837) 21,708 78,562 37,091
Income tax provision 2,709 3,484 12,037 10,925
Earnings of
unconsolidated equity
method investment, net
of tax 1,557 927 4,563 1,898
----- --- ----- -----
Net income (loss) $(13,989) $19,151 $71,088 $28,064
======== ======= ======= =======
Earnings (loss) per common share - Basic:
Net income (loss) per
share $(0.17) $0.24 $0.88 $0.35
====== ===== ===== =====
Earnings (loss) per common share -
Diluted:
Net income (loss) per
share $(0.17) $0.24 $0.88 $0.35
====== ===== ===== =====
Dividends declared per
share $0.22 $0.20 $0.66 $0.60
===== ===== ===== =====
Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Nine Months Ended September 30,
2015 2014
---- ----
Cash flows from operating activities:
Net income $71,088 $28,064
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 237,538 225,230
Amortization of deferred financing
costs 11,211 10,493
Amortization of net lease
discounts and lease incentives 10,288 7,252
Deferred income taxes (1,455) (2,623)
Non-cash share based payment
expense 3,981 3,167
Cash flow hedges reclassified into
earnings 19,349 26,730
Security deposits and maintenance
payments included in earnings (20,645) (38,257)
Gain on sale of flight equipment (43,034) (13,384)
Loss on extinguishment of debt - 36,570
Impairment of aircraft 102,358 67,005
Other 269 (2,278)
Changes in certain assets and liabilities:
Accounts receivable 253 (1,603)
Other assets (4,382) (1,691)
Accounts payable, accrued expenses
and other liabilities 14,085 17,138
Lease rentals received in advance 7,566 4,162
----- -----
Net cash provided by operating
activities 408,470 365,975
------- -------
Cash flows from investing activities:
Acquisition and improvement of
flight equipment and lease
incentives (1,034,578) (939,651)
Proceeds from sale of flight
equipment 343,020 563,882
Restricted cash and cash
equivalents related to sale of
flight equipment - (24,606)
Aircraft purchase deposits and
progress payments (4,421) 1,315
Net investment in finance leases (24,000) (14,258)
Collections on finance leases 6,768 8,096
Unconsolidated equity method
investment and associated costs - (8,592)
Distributions from unconsolidated
equity method investment in
excess of earnings - 997
Other (260) (466)
---- ----
Net cash used in investing
activities (713,471) (413,283)
-------- --------
Cash flows from financing activities:
Issuance of shares net of
repurchases (1,960) (2,092)
Proceeds from secured and
unsecured debt financings 800,000 803,200
Repayments of secured and
unsecured debt financings (548,359) (895,459)
Debt extinguishment costs - (32,835)
Deferred financing costs (12,185) (15,843)
Restricted liquidity facility
collateral - 42,000
Liquidity facility - (42,000)
Restricted cash and cash
equivalents related to financing
activities 14,626 32,987
Security deposits and maintenance
payments received 114,644 131,136
Security deposits and maintenance
payments returned (28,797) (72,030)
Payments for terminated cash flow
hedges - (33,427)
Dividends paid (53,583) (48,604)
------- -------
Net cash provided by (used in)
financing activities 284,386 (132,967)
------- --------
Net increase (decrease) in cash
and cash equivalents (20,615) (180,275)
Cash and cash equivalents at
beginning of period 169,656 654,613
------- -------
Cash and cash equivalents at end
of period $149,041 $474,338
======== ========
Aircastle Limited and Subsidiaries
Selected Financial Guidance Elements for the
Fourth Quarter of 2015
($ in millions, except for percentages)
(Unaudited)
Guidance Item Q4:15(1)
------------- -------
Lease rental revenue $178 - $182
Finance lease revenue $1 - $2
Maintenance revenue $6 - $8
Amortization of net lease
discounts and lease
incentives $(5) - $(6)
SG&A $14 - $15
Depreciation $79 - $81
Interest, net (2) $59 - $60
Gain on sale $5 - $10
Full year effective tax rate 13% - 14%
---------------------------- --------
(1) Excludes the impact of lease end part outs.
(2) Includes non-cash hedge loss amortization charges related to the payoff of Securitization No.1 of $2.7 million.
Aircastle Limited and Subsidiaries
Supplemental Financial Information
(Amount in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
--------- ---------
2015 2014 2015 2014
---- ---- ---- ----
Revenues $212,074 $177,596 $610,935 $580,345
EBITDA $136,538 $156,023 $515,014 $453,022
Adjusted EBITDA $216,311 $177,408 $621,133 $559,083
Adjusted net income (loss) $(9,679) $26,545 $88,007 $87,497
Adjusted net income (loss)
allocable to common shares $(9,679) $26,348 $87,352 $86,868
Per common share - Basic $(0.12) $0.33 $1.08 $1.08
Per common share - Diluted $(0.12) $0.33 $1.08 $1.08
Basic common shares
outstanding 80,566 80,390 80,566 80,389
Diluted common shares
outstanding 80,566 80,390 80,566 80,389
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 Nine Months Ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
---- ---- ---- ----
(Dollars in thousands)
---------------------
Net income (loss) $(13,989) $19,151 $71,088 $28,064
Depreciation 85,324 75,519 237,538 225,230
Amortization of net
lease discounts and
lease incentives 2,113 1,075 10,288 7,252
Interest, net 60,381 56,794 184,063 181,551
Income tax provision 2,709 3,484 12,037 10,925
----- ----- ------ ------
EBITDA 136,538 156,023 515,014 453,022
Adjustments:
Impairment of
aircraft 78,403 20,436 102,358 67,005
Loss on
extinguishment of
debt - - - 36,570
Non-cash share
based payment
expense 1,424 949 3,981 3,167
Gain on mark to
market of interest
rate derivative
contracts (54) - (220) (681)
Adjusted EBITDA $216,311 $177,408 $621,133 $559,083
======== ======== ======== ========
We define EBITDA as income (loss) 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-US GAAP measure is helpful in identifying trends in our performance.
This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieving optimal financial performance. It provides an indicator for management to determine if adjustments to current spending decisions are needed.
EBITDA provides us with a measure of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. Accordingly, this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure, or expenses, of the organization. EBITDA is one of the metrics used by senior management and the board of directors to review the consolidated financial performance of our business.
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 Reconciliation
(Dollars in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
---- ---- ---- ----
(Dollars in thousands)
---------------------
Net income (loss) $(13,989) $19,151 $71,088 $28,064
Loss on extinguishment of
debt(2) - - - 36,570
Ineffective portion and
termination of hedges(1) 215 (21) 509 41
Gain on mark to market of
interest rate derivative
contracts(2) (54) - (220) (681)
Non-cash share based payment
expense(3) 1,424 949 3,981 3,167
Term Financing No. 1 hedge loss
amortization - 3,601 4,401 11,544
charges(1)
Securitization No. 1 hedge loss
amortization 2,725 2,865 8,248 8,792
charges (1)
Adjusted net income (loss) $(9,679) $26,545 $88,007 $87,497
======= ======= ======= =======
(1) Included in Interest, net.
(2) Included in Other income (expense).
(3) Included in Selling, general and administrative expenses.
Aircastle Limited and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Cash Return on Equity Calculation
(Dollars in thousands)
(Unaudited)
Cash Flow from Operations Collections on Finance Gain (Loss) on Sale of
Leases Eqt. Depreciation Distributions from JV Cash Earnings Average Shareholders' Equity 12 Month Cash ROE
------------------------- ---------------------- ---------------------- ------------ --------------------- ------------- ---------------------------- -----------------
2008 $333,626 $6,525 $201,759 $138,392 $1,242,635 11.1%
2009 $327,641 $1,162 $209,481 $119,322 $1,205,284 9.9%
2010 $356,530 $7,084 $220,476 $143,138 $1,300,953 11.0%
2011 $359,377 $39,092 $242,103 $156,366 $1,370,513 11.4%
2012 $427,277 $3,852 $5,747 $269,920 $166,956 $1,425,658 11.7%
2013 $424,037 $9,508 $37,220 $284,924 $185,841 $1,513,156 12.3%
2014 $458,786 $10,312 $23,146 $299,365 $667 $193,546 $1,661,228 11.7%
LTM $501,281 $8,984 $52,796 $311,673 ($14) $251,374 $1,735,012 14.5%
Note: LTM Average Shareholders' Equity is the average of the most recent five quarters period end Shareholders' Equity. 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
Net Cash Interest Margin Calculation
(Dollars in thousands)
(Unaudited)
Average NBV of Flight Equipment Quarterly Lease Rental Revenue Cash Interest(1) Annualized Net Cash Interest
Margin
------------------------------- ------------------------------ --------------- ----------------------------
Q1:11 $4,041,967 $141,116 $41,278 9.9%
Q2:11 $4,143,446 $143,356 $43,217 9.7%
Q3:11 $4,222,512 $145,890 $42,066 9.8%
Q4:11 $4,374,921 $149,848 $43,041 9.8%
Q1:12 $4,388,008 $152,242 $44,969 9.8%
Q2:12 $4,516,973 $153,624 $48,798 9.3%
Q3:12 $4,602,185 $159,546 $41,373 10.3%
Q4:12 $4,605,783 $158,090 $43,461 10.0%
Q1:13 $4,619,204 $156,590 $48,591 9.4%
Q2:13 $4,711,790 $157,918 $47,869 9.3%
Q3:13 $4,717,877 $161,148 $47,682 9.6%
Q4:13 $4,972,040 $169,274 $49,080 9.7%
Q1:14 $5,168,851 $174,335 $51,685 9.5%
Q2:14 $5,582,359 $183,231 $48,172 9.7%
Q3:14 $5,412,299 $178,886 $44,820 9.9%
Q4:14 $5,373,733 $178,202 $44,459 10.0%
Q1:15 $5,637,513 $177,146 $50,235 9.0%
Q2:15 $5,850,516 $184,839 $51,413 9.1%
Q3:15 $5,926,459 $188,038 $51,428 9.2%
(1) Excludes loan termination payments of $3.2 million and $3.0 million in the second quarter of 2011 and 2013 respectively.
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 Nine Months Ended
September 30, 2015 September 30, 2015
------------------ ------------------
Weighted-
average
shares(1): Shares Percent(2) Shares Percent(2)
----------- ------ --------- ------ ---------
Common shares
outstanding -
Basic 80,566 99.21% 80,566 99.26%
Unvested
restricted
common shares 645 0.79% 604 0.74%
--- ---- --- ----
Total weighted-
average shares
outstanding 81,212 100.00% 81,170 100.00%
====== ====== ====== ======
Net income (loss) allocation
----------------------------
Net income
(loss) $(13,989) 100.00% $71,088 100.00%
Distributed and
undistributed
earnings
allocated to
unvested
restricted
shares -- -- (529) (0.74%)
--- --- ---- ------
Earnings (loss)
available to
common shares $(13,989) 100.00% $70,559 99.26%
======== ====== ======= =====
Adjusted net income (loss) allocation
-------------------------------
Adjusted net
income (loss) $(9,679) 100.00% $88,007 100.00%
Amounts
allocated to
unvested
restricted
shares -- -- (655) (0.74%)
--- --- ---- ------
Amounts
allocated to
common shares $(9,679) 100.00% $87,352 99.26%
======= ====== ======= =====
(1) For the three and nine months ended September 30, 2015 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 Nine Months Ended
September 30, 2014 September 30, 2014
------------------ ------------------
Weighted-
average
shares(1): Shares Percent(2) Shares Percent(2)
----------- ------ --------- ------ ---------
Common shares
outstanding -
Basic 80,390 99.26% 80,389 99.28%
Unvested
restricted
common shares 601 0.74% 582 0.72%
--- ---- --- ----
Total weighted-
average shares
outstanding 80,991 100.00% 80,971 100.00%
====== ====== ====== ======
Net income allocation
---------------------
Net income $19,151 100.00% $28,064 100.00%
Distributed and
undistributed
earnings
allocated to
unvested
restricted
shares (142) (0.74%) (202) (0.72%)
---- ------ ---- ------
Earnings
available to
common shares $19,009 99.26% $27,862 99.28%
======= ===== ======= =====
Adjusted net income allocation
------------------------------
Adjusted net
income $26,545 100.00% $87,497 100.00%
Amounts
allocated to
unvested
restricted
shares (197) (0.74%) (629) (0.72%)
---- ------ ---- ------
Amounts
allocated to
common shares $26,348 99.26% $86,868 99.28%
======= ===== ======= =====
(1) For the three and nine months ended September 30, 2014 the company had no dilutive shares.
(2) Percentages rounded to two decimal places.
Contact:
Aircastle Advisor LLC The IGB Group
Frank Constantinople, SVP Investor Relations Leon Berman
Tel: +1-203-504-1063 Tel: +1-212-377-8483
fconstantinople@aircastle.com lberman@igbir.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/aircastle-announces-third-quarter-2015-results-300170970.html
SOURCE Aircastle Limited
