AIRCASTLE LIMITED 
By STAMFORD, Conn., Feb. 25, 2014 /PRNewswire/ --
Highlights
-- Operating and finance lease revenue of $173.3 million for the fourth
quarter and $661.1 million for the full year
-- Net income of $48.4 million, or $0.60 per diluted common share for the
fourth quarter, and $29.8 million, or $0.40 per diluted common share,
for the full year
-- Adjusted EBITDA(1) of $196.0 million for the fourth quarter and $717.2
million for the full year
-- Adjusted net income(1) of $54.9 million, or $0.68 per diluted common
share, for the fourth quarter and $59.3 million, or $0.80 per diluted
common share, for the full year
-- Fleet utilization of 99.5% for the fourth quarter and 98.7% for the full
year, with aircraft portfolio yield of 13.6% for both the fourth quarter
and the full year
-- Purchased eight aircraft during the fourth quarter for $472 million, and
closed 25 aircraft investments in 2013 with a total cost of $1.45
billion
-- Sold 22 aircraft during 2013 for $548 million; realized gain on sale of
$37.2 million for the year
-- Issued $400 million of 4.625% unsecured Senior Notes due 2018 during the
fourth quarter
-- 31(st) consecutive quarterly dividend declared by Aircastle's Board of
Directors
-- Established a joint venture with Ontario Teachers' Pension Plan and we
sold two A330 family aircraft to the joint venture in the fourth quarter
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR) reported fourth quarter 2013 net income of $48.4 million, or $0.60 per diluted common share and adjusted net income of $54.9 million, or $0.68 per diluted common share. Net income for the year ended December 31, 2013 was $29.8 million, or $0.40 per diluted common share, and adjusted net income was $59.3 million, or $0.80 per diluted common share. The fourth quarter results included total revenues of $192.0 million, an increase of 9%, versus $176.6 million in the fourth quarter of 2012. For the full year 2013, total revenues were $708.6 million, up 3% versus $686.6 million in 2012.
Commenting on the results, Ron Wainshal, Aircastle's CEO, stated, "Thanks to a strong fourth quarter, 2013 was a successful and important year for Aircastle, as we grew and upgraded our portfolio with $1.5 billion of investments and significant and profitable asset sales, including many end-of-life aircraft. We strengthened our shareholder base and capital structure through Marubeni's strategic investment, a larger unencumbered asset base, several well priced debt financings and an expanded unsecured revolver. Aircastle delivered strong results including a full-year cash ROE of 12.1% and asset utilization of nearly 99%.
All in all, over the past twelve months I believe we significantly enhanced the Company's competitive standing as a nimble and flexible value-oriented investor. As we enter 2014, we remain well positioned to capitalize on a robust acquisition pipeline, very attractive financial market conditions, a terrific team and operating platform and an improving demand environment for leased aircraft."
Fourth Quarter Results
Lease rental and finance lease revenues for the fourth quarter were $173.3 million, up $11.3 million or 7% year over year, due primarily to the impact of new aircraft acquisitions of $33.5 million, partially offset by lower revenue due to aircraft sales of $16.8 million and the net year over year impact of lease extensions, transitions and terminations and other changes of $5.5 million.
Total revenues for the fourth quarter were $192.0 million, an increase of $15.4 million, or 9% from the previous year, reflecting higher lease rental and finance lease revenue of $11.3 million and higher maintenance revenue of $9.2 million associated with a year over year increase in lease transitions. These increases were partially offset by a decline in other revenues of $4.7 million reflecting early lease termination fees earned in the fourth quarter of 2012 and the maturity of a debt investment in the first quarter of 2013.
Adjusted EBITDA for the fourth quarter was $196.0 million, up $23.7 million, or 14% from the fourth quarter of 2012, due primarily to higher total revenues excluding amortization of net lease discounts and incentives of $15.8 million and higher gains from aircraft sales of $8.9 million. These improvements were partially offset by an increase in net operating expenses of $1.2 million.
Adjusted net income for the quarter was $54.9 million, up $18.5 million or 51%, year over year. The change reflects higher total revenues of $15.4 million, higher gains from the sale of aircraft of $8.9 million and lower aircraft impairment charges of $2.7 million. These improvements were partially offset by higher adjusted interest expense of $5.2 million, higher depreciation of $2.6 million and higher net operating expenses of $1.2 million.
Full Year Results
Lease rental and finance lease revenues for the full year were $661.1 million, up $29.2 million, or 5% year over year, reflecting the net impact of 41 aircraft acquisitions made during 2013 and 2012 totaling $103.0 million and higher full year finance lease revenues of $7.8 million. These increases were offset by lower lease rentals due to aircraft sales and disposals of $52.7 million and the impact of transitions, extensions and terminations and other changes totaling $28.8 million.
Total revenues for 2013 were $708.6 million, an increase of $22.1 million, up 3% from the previous year. The increase reflects higher lease rental and finance lease revenue of $29.2 million and higher maintenance revenue from lease terminations of $15.0 million. These increases were partially offset by an increase in the amortization of net lease discounts and lease incentives of $19.6 million associated with fleet expansion, and $2.6 million of lower other revenue, primarily from a debt investment which matured in the first quarter of 2013.
During the year, we recorded maintenance revenue from seven scheduled lease terminations of $20.6 million versus $18.4 million for five scheduled lease terminations in 2012. In addition, we recorded $47.7 million of maintenance revenue from ten aircraft returned ahead of schedule in 2013, versus $34.9 million from ten aircraft that were returned early in 2012.
We recorded total non-cash impairment charges of $117.3 million in 2013 versus $96.5 million in 2012. The year over year increase was primarily driven by impairment charges taken during the third quarter 2013 annual fleet review, where we wrote down the value of six 747-400 converted freighters coming off lease in 2014. To date, three of these six converted freighters have been placed.
Adjusted EBITDA for the full year was $717.2 million, up $69.6 million or 11% versus 2012, due primarily to higher total revenues excluding amortization of net lease discounts and incentives of $41.6 million and higher gains from aircraft sales of $31.5 million. These improvements were partially offset by an increase in net operating expenses of $3.7 million.
Adjusted net income for the full year was $59.3 million compared to $57.0 million in 2012, an increase of $2.3 million. Higher total revenues of $22.1 million, higher gains from sale of aircraft of $31.5 million and higher other net income of $5.5 million were partially offset by higher aircraft impairment charges of $20.9 million, higher adjusted interest expense of $15.9 million, higher depreciation of $15.0 million, and higher SG&A, taxes and other expenses, net of $5.1 million.
Aviation Assets
During 2013, we acquired 25 aircraft investments for $1.45 billion. We also sold 22 aircraft for $548 million which resulted in a pre-tax gain of approximately $37.2 million for the year.
As of December 31, 2013, Aircastle owned 162 aircraft having a net book value of $5.2 billion.
Owned Owned Owned
Aircraft as Aircraft as Aircraft as
of of of
December 31, December 31, December 31,
2011(1) 2012(1) 2013(1)
Flight Equipment Held for Lease ($ mils.) $4,388 $4,783 $5,190
Unencumbered Flight Eqt. included in Flight Eqt. Held for Lease ($ mils.) $677 $2,092 $2,655
Number of Aircraft 144 159 162
Number of Unencumbered Aircraft 27 72 80
Passenger Aircraft (% of NBV) 69% 71% 81%
Freighter Aircraft (% of NBV) 31% 29% 19%
Weighted Average Fleet Age - Combined (years)((2)) 10.9 10.7 9.9
Weighted Average Remaining Combined Lease Term (years)((3)) 4.9 5.0 5.0
Weighted Average Fleet Utilization for the year ended(4) 99% 99% 99%
Portfolio Yield for the year ended(5) 14% 14% 14%
(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
(years) by net book
value.
(3) Weighted average
remaining lease term
(years) 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.
2013 Financing Activity
During 2013, we raised approximately $971 million of capital, including the following:
-- Issuing 12,320,000 common shares to an affiliate of Marubeni
Corporation, for gross proceeds of approximately $209 million, in the
third quarter of 2013. Combined with additional subsequent purchases of
Aircastle common shares in the secondary market, as of February 14,
2014, Marubeni Corporation owned approximately 20% of Aircastle's issued
and outstanding common shares.
-- Issuing $400 million in aggregate principal amount of unsecured 4.625%
Senior Notes due 2018, in the fourth quarter of 2013.
-- Entering into $177 million of secured borrowings related to various
aircraft.
-- Increasing our unsecured revolving credit from $150 million to $335
million, expanding the bank group from four to seven global financial
institutions and extending the maturity of the facility to a three year
term expiring in August 2016. This revolving credit facility is
currently undrawn.
In February 2014, we repaid the outstanding amount, plus accrued interest and fees, due under Securitization No. 1 and terminated the related swap for a total cash payment of $255 million. In February 2014, we also raised $303 million in secured financing for two B777-300ER and one A330-200 aircraft we acquired in 2013.
Joint Venture with Ontario Teachers' Pension Plan
In December 2013, Aircastle formed a joint venture to invest in leased aircraft with an affiliate of Ontario Teachers' Pension Plan. The joint venture's first investment is two Airbus A330 family aircraft manufactured in 2013 that we sold to the joint venture, also in December 2013.
Teachers' holds more than 5% of our common shares and, therefore, the joint venture and the sale of the initial Airbus A330 family aircraft are related party transactions under our related party policy. Accordingly, the formation of the joint venture and the sale of these aircraft was submitted to, and approved by, our Audit Committee under that policy.
Common Dividend
On February 21, 2014, Aircastle's Board of Directors declared a first quarter 2014 cash dividend on its common shares of $0.20 per share, payable on March 14, 2014 to shareholders of record on March 7, 2014. This is our 31(st) consecutive dividend. During 2013, Aircastle increased the dividend to common shareholders to the current quarterly rate of $0.20 per share, a 21% increase over the quarterly rate at the end of 2012.
Conference Call
In connection with this earnings release, management will host an earnings conference call on Tuesday, February 25, 2014 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) 556-4997 (from within the U.S. and Canada) or (719) 457-2628 (from outside of the U.S. and Canada) ten minutes prior to the scheduled start and referencing the passcode "6185816".
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, March 27, 2014 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 "6185816".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet aircraft to airlines throughout the world. As of December 31, 2013, Aircastle's aircraft portfolio consisted of 162 aircraft on lease with 64 customers located in 37 countries.
Safe Harbor
Certain items in this press release and other information we provide from time to time, 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, 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 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 can give no assurance that its expectations will be attained. Accordingly, you should not place undue reliance on any forward-looking statements contained in this report. Factors that could have a material adverse effect on our operations and future prospects or that could cause actual results to differ materially from Aircastle expectations include, but are not limited to, capital markets disruption or volatility which could adversely affect our continued ability to obtain additional capital to finance new investments or our working capital needs; government fiscal or tax policies, general economic and business conditions or other factors affecting demand for aircraft or aircraft values and lease rates; our continued ability to obtain favorable tax treatment in Bermuda, Ireland and other jurisdictions; our ability to pay dividends; high or volatile fuel prices, lack of access to capital, reduced load factors and/or reduced yields, operational disruptions caused by political unrest and other factors affecting the creditworthiness of our airline customers and their ability to continue to perform their obligations under our leases and other risks detailed from time to time in Aircastle's filings with the SEC, including as previously disclosed in Aircastle's 2012 Annual Report on Form 10-K, and elsewhere in this report. 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 report. Aircastle Limited expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
(1) Refer to Supplemental Financial Information accompanying this press release for a reconciliation of GAAP to non-GAAP numbers.
Contact:
Frank Constantinople, SVP Investor Relations
Tel: +1-203-504-1063
fconstantinople@aircastle.com
The IGB Group
Leon Berman
Tel: +1-212-477-8438
lberman@igbir.com
Aircastle Limited and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share data)
December 31,
------------
2012 2013
---- ----
ASSETS
Cash and cash equivalents $618,217 $654,613
Accounts receivable 5,625 2,825
Restricted cash and cash equivalents 111,942 122,773
Restricted liquidity facility collateral 107,000 107,000
Flight equipment held for lease, net of accumulated depreciation of $1,305,064 and 4,662,661 5,044,410
$1,430,325
Net investment in finance leases 119,951 145,173
Unconsolidated equity method investment - 21,123
Aircraft purchase deposits 131 10,000
Other assets 186,633 143,976
------- -------
Total assets $5,812,160 $6,251,893
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Borrowings from secured financings (including borrowings of ACS Ireland VIEs of $1,848,034 $1,586,835
$207,926 and $152,545, respectively)
Borrowings from unsecured financings 1,750,642 2,150,527
Accounts payable, accrued expenses and other liabilities 108,593 111,661
Lease rentals received in advance 53,189 49,235
Liquidity facility 107,000 107,000
Security deposits 87,707 118,804
Maintenance payments 379,391 442,432
Fair value of derivative liabilities 61,978 39,992
------ ------
Total liabilities 4,396,534 4,606,486
--------- ---------
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, 68,639,729 shares issued and outstanding at December 31, 2012; and 80,806,975 shares issued and
outstanding at December 31, 2013 686 808
Additional paid-in capital 1,360,555 1,562,106
Retained earnings 180,675 158,398
Accumulated other comprehensive loss (126,290) (75,905)
-------- -------
Total shareholders' equity 1,415,626 1,645,407
--------- ---------
Total liabilities and shareholders' equity $5,812,160 $6,251,893
======== ========
Aircastle Limited and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
2012 2013 2012 2013
---- ---- ---- ----
Revenues:
Lease rental revenue $158,090 $169,273 $623,503 $644,929
Finance lease revenue 3,919 4,045 8,393 16,165
Amortization of lease premiums, discounts and lease incentives (6,452) (6,884) (12,844) (32,411)
Maintenance revenue 16,194 25,359 53,320 68,342
------ ------ ------ ------
Total lease rentals 171,751 191,793 672,372 697,025
Other revenue 4,859 195 14,200 11,620
----- --- ------ ------
Total revenues 176,610 191,988 686,572 708,645
------- ------- ------- -------
Expenses:
Depreciation 69,896 72,476 269,920 284,924
Interest, net 55,605 60,106 222,808 243,757
Selling, general and administrative (including non-cash share 11,754 14,139 48,370 53,436
based payment expense of $999 and $1,638 for the three months
ended, and $4,232 and $4,569 for the twelve months ended
December 31, 2012 and 2013, respectively)
Impairment of Aircraft 7,667 4,971 96,454 117,306
Maintenance and other costs 2,713 2,167 14,656 13,631
----- ----- ------ ------
Total expenses 147,635 153,859 652,208 713,054
------- ------- ------- -------
Other income:
Gain on sale of flight equipment 2,685 11,619 5,747 37,220
Other (2) 1,116 602 6,132
Total other income 2,683 12,735 6,349 43,352
----- ------ ----- ------
Income from continuing operations before income taxes 31,658 50,864 40,713 38,943
Income tax provision 1,869 2,496 7,845 9,215
Earnings of unconsolidated equity method investment - 53 - 53
--- --- --- ---
Net income $29,789 $48,421 $32,868 $29,781
======= ======= ======= =======
Earnings per common share - Basic:
Net income per share $0.43 $0.60 $0.46 $0.40
===== ===== ===== =====
Earnings per common share - Diluted:
Net income per share $0.43 $0.60 $0.46 $0.40
===== ===== ===== =====
Dividends declared per share $0.165 $0.20 $0.615 $0.695
====== ===== ====== ======
Aircastle Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
Year Ended December 31,
-----------------------
2011 2012 2013
---- ---- ----
Cash flows from operating activities:
Net income $124,270 $32,868 $29,781
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 242,103 269,920 284,924
Amortization of deferred financing costs 15,271 12,449 14,719
Amortization of net lease discounts and lease incentives 16,445 12,844 32,411
Deferred income taxes 5,615 6,828 4,416
Non-cash share based payment expense 5,786 4,232 4,569
Net derivative loss reclassified into earnings 23,078 30,777 33,265
Ineffective portion of cash flow hedges (101) 2,893 371
Security deposits and maintenance payments included in earnings (35,500) (54,180) (60,112)
Gain on the sale of flight equipment (39,092) (5,747) (37,220)
Impairment of aircraft 6,436 96,454 117,306
Earnings of unconsolidated equity method investment, net of tax - - (53)
Other 742 (2,218) (5,641)
Changes on certain assets and liabilities:
Accounts receivable (4,818) (2,530) 3,397
Restricted cash and cash equivalents related to operating activities 4,418 - -
Other assets (2,675) 919 1,164
Accounts payable, accrued expenses and other liabilities (1,848) 17,732 3,016
Lease rentals received in advance (753) 4,036 (2,276)
---- ----- ------
Net cash provided by operating activities 359,377 427,277 424,037
------- ------- -------
Cash flows from investing activities:
Acquisition and improvement of flight equipment (776,750) (693,227) (1,263,706)
Proceeds from sale of flight equipment 489,196 61,489 568,045
Restricted cash and cash equivalents related to sale of flight equipment (35,762) 35,762 -
Aircraft purchase deposits and progress payments, net of returned deposits and (122,069) (20,553) (6,094)
aircraft sales deposits
Net investment in finance leases - (91,500) (11,595)
Collections on finance leases - 3,852 9,508
Unconsolidated equity method investment and associated costs - - (20,189)
Purchase of debt investment - (43,626) -
Principal repayments on debt investment - 6,585 42,001
Other (35) (691) (903)
--- ---- ----
Net cash used in investing activities (445,420) (741,909) (682,933)
-------- -------- --------
Cash flows from financing activities:
Issuance of shares net of repurchases (91,610) (44,180) 197,437
Proceeds from notes and term debt financings 669,047 1,459,690 563,230
Securitization and term debt financing repayments (390,945) (847,415) (510,162)
Deferred financing costs (20,179) (31,691) (10,865)
Restricted secured liquidity facility collateral (35,000) 3,000 -
Secured liquidity facility collateral 35,000 (3,000) -
Restricted cash and cash equivalents related to security deposits and (25,056) 99,748 (10,831)
maintenance payments
Security deposits received 20,574 17,453 20,889
Security deposits returned (7,914) (6,152) (5,104)
Maintenance payments received 122,050 142,122 179,789
Maintenance payments returned (89,300) (57,822) (77,033)
Payments for terminated cash flow hedges and payment for option - (50,757) -
Dividends paid (45,059) (43,669) (52,058)
------- ------- -------
Net cash provided by financing activities 141,608 637,327 295,292
------- ------- -------
Net increase in cash and cash equivalents 55,565 322,695 36,396
Cash and cash equivalents at beginning of year 239,957 295,522 618,217
------- ------- -------
Cash and cash equivalents at end of year $295,522 $618,217 $654,613
======== ======== ========
Aircastle Limited and Subsidiaries
Supplemental Financial Information
(Amount in thousands, except per share amounts)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
2012 2013 2012 2013
---- ---- ---- ----
Revenues $176,610 $191,988 $686,572 $708,645
EBITDA $163,611 $190,383 $546,285 $600,088
Adjusted EBITDA $172,279 $195,965 $647,622 $717,209
Adjusted net income $36,372 $54,899 $57,009 $59,260
Adjusted net income
allocable to common
shares $36,079 $54,433 $56,539 $58,786
Per common share - Basic $0.52 $0.68 $0.80 $0.80
Per common share -
Diluted $0.52 $0.68 $0.80 $0.80
Basic common shares
outstanding 69,120 80,154 70,717 73,653
Diluted common shares
outstanding 69,120 80,154 70,717 73,653
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 Twelve Months
Ended
December 31, December 31,
------------ ------------
2012 2013 2012 2013
---- ---- ---- ----
Net income $29,789 $48,421 $32,868 $29,781
Depreciation 69,896 72,476 269,920 284,924
Amortization of net lease discounts and lease incentives 6,452 6,884 12,844 32,411
Interest, net 55,605 60,106 222,808 243,757
Income tax provision 1,869 2,496 7,845 9,215
----- ----- ----- -----
EBITDA 163,611 190,383 546,285 600,088
Adjustments:
Impairment of aircraft 7,667 4,971 96,454 117,306
Non-cash share based payment expense 999 1,638 4,232 4,569
Loss (gain) on mark to market of interest rate derivative contracts 2 (1,027) (597) (4,754)
Contract termination expense - - 1,248 -
Adjusted EBITDA $172,279 $195,965 $647,622 $717,209
======== ======== ======== ========
We define EBITDA as income 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-GAAP measure is helpful in identifying trends in our performance. Using EBITDA assists us in comparing our operating performance on a consistent basis by removing the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. 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 (Loss) Reconciliation
(Dollars in thousands)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31,
December 31,
------------
2012 2013 2012 2013
---- ---- ---- ----
(Dollars in thousands)
---------------------
Net income $29,789 $48,421 $32,868 $29,781
Loan termination fee(1) - - - 2,954
Ineffective portion and termination of hedges(1) 1,053 171 2,893 2,393
Gain (loss) on mark to market of interest rate derivative contracts(2) 2 (1,027) (597) (4,754)
Write-off of deferred financing fees(1) 120 - 3,034 3,975
Stock compensation expense(3) 999 1,638 4,232 4,569
Term Financing No. 1 hedge loss amortization charges(1) 4,409 4,365 13,331 17,843
Securitization No. 1 hedge loss amortization charges (1) - 1,331 - 2,499
Contract termination expense - - 1,248 -
--- --- ----- ---
Adjusted net income $36,372 $54,899 $57,009 $59,260
======= ======= ===== =====
(1) Included in Interest, net.
(2) Included in Other income (expense).
(3) Included in Selling, general and administrative expenses.
Management believes that ANI, when viewed in conjunction with the Company's results under US GAAP and the below reconciliation, provides useful information about operating and period-over-period performance, and provides additional information that is useful for evaluating the underlying operating performance of our business without regard to periodic reporting elements related to interest rate derivative accounting and gains or losses related to flight equipment and debt investments.
Aircastle Limited and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Cash Earnings and Cash ROE
(Dollars in thousands)
(Unaudited)
2009 2010 2011 2012 2013
---- ---- ---- ---- ----
Net cash provided by operating activities $327,641 $356,530 $359,377 $427,277 $424,037
Collections on Finance Leases - - - 3,852 9,508
Gain on Sale of Flight Equipment 1,162 7,084 39,092 5,747 37,220
Less: Depreciation (209,481) (220,476) (242,103) (269,920) (284,924)
Cash Earnings $119,322 $143,138 $156,366 $166,956 $185,841
======== ======== ======== ======== ========
Average Shareholder's Equity $1,201,702 $1,316,978 $1,373,663 $1,410,117 $1,530,516
Cash Earnings / Average Shareholder's Equity 9.9% 10.9% 11.4% 11.8% 12.1%
Note: Average Shareholder's Equity is the sum of the current and prior year shareholder's equity divided by two. 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
Reconciliation of Net Income Allocable to Common Shares
(In thousands)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2013 2013
------------- -------------
Weighted-average shares: Shares Percent(2) Shares Percent(2)
------------------------ ------ --------- ------ ---------
Common shares outstanding - Basic 80,154 99.15% 73,653 99.20%
Unvested restricted common shares 686 0.85% 594 0.80%
--- ---- --- ----
Total weighted-average shares outstanding 80,839 100.00% 74,247 100.00%
====== ====== ====== ======
Net income allocation
---------------------
Net income $48,421 100.00% $29,781 100.00%
Distributed and undistributed earnings allocated to unvested restricted
shares (411) (0.85%) (238) (0.80%)
---- ------ ---- ------
Earnings available to common shares $48,010 99.15% $29,543 99.20%
======= ===== ======= =====
Adjusted net income allocation
------------------------------
Adjusted net income $54,899 100.00% $59,260 100.00%
Amounts allocated to unvested restricted (466) (0.85%) (474) (0.80%)
shares
Amounts allocated to common shares $54,433 99.15% $58,786 99.20%
======= ===== ======= =====
(1) For the three and twelve months ended December 31, 2013, 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 Twelve Months
Ended Ended
December 31, December 31,
2012 2012
------------- -------------
Weighted-average shares: Shares Percent(2) Shares Percent(2)
------------------------ ------ ------- ------ -------
Common shares outstanding - Basic 69,120 99.19% 70,717 99.18%
Unvested restricted common shares 561 0.81% 588 0.82%
--- ---- --- ----
Total weighted-average shares outstanding 69,681 100.00% 71,305 100.00%
====== ====== ====== ======
Net income allocation
---------------------
Net income $29,789 100.00% $32,868 100.00%
Distributed and undistributed earnings allocated to unvested restricted
shares (240) (0.81%) (271) (0.82%)
---- ------- ---- -------
Earnings available to common shares $29,549 99.19% $32,597 99.18%
======= ===== ======= =====
Adjusted net income (loss) allocation
-------------------------------------
Adjusted net income $36,372 100.00% $57,009 100.00%
Amounts allocated to unvested restricted shares (293) (0.81%) (470) (0.82%)
---- ------- ---- -------
Amounts allocated to common shares $36,079 99.19% $56,539 99.18%
======= ===== ======= =====
(1) For the three and twelve months ended December 31, 2012, the company had no dilutive shares.
(2) Percentages rounded to two decimal places.
SOURCE Aircastle Limited
