STAMFORD, Conn., Nov. 4, 2014 /PRNewswire/ --
Highlights
- Lease rental and finance lease revenues of $180.3 million, and Adjusted
EBITDA1 of $177.4
million
- Net income of $19.2 million, or
$0.24 per diluted common share
- Adjusted net income1 of $26.5 million, or $0.33 per diluted common share
- Completed more than $1 billion of
aircraft investments through the third quarter of 2014; more than
$750 million of additional
acquisitions expected to close by the end of Q1 2015
- Sold eleven aircraft to third parties during the third quarter
for proceeds of $201 million and a
net pre-tax contribution of $11.4
million; also sold a 777-300ER on lease with LATAM to our
joint venture with Ontario Teachers' Pension Plan
- Fleet utilization of 100% with an aircraft portfolio yield of
13.2% and net cash interest margin of 9.9%
- Increased the common dividend by 10%, to $0.22 per share; our 34th consecutive
quarterly dividend declared
- Board of Directors approved a $100
million share repurchase authorization
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR)
reported third quarter 2014 net income of $19.2 million, or $0.24 per diluted common share, and adjusted net
income of $26.5 million, or
$0.33 per diluted common share.
The third quarter results included lease rental and finance lease
revenues of $180.3 million versus
$165.3 million in the third quarter
of 2013.
Commenting on the results, Ron
Wainshal, Aircastle's CEO, stated, "During the third
quarter, we recorded 9% lease rental revenue growth while
increasing our net cash interest margin to 9.9%, among the highest
in the industry. This strong performance demonstrates our
success in improving Aircastle's portfolio through an active mix of
acquisitions, sales and lease placements. Aircastle completed
more than $1 billion of aircraft
acquisitions in the first three quarters of 2014, and we've built a
substantial new investment pipeline to support strong and accretive
growth. We also sold 35 aircraft and designated two 747
freighters for sale for a net contribution of over $23 million as we exit older technology
models."
Mr. Wainshal continued, "We've been taking advantage of
favorable market conditions to position the company for profitable
growth and on a path towards obtaining investment grade
ratings. As market conditions evolve, we intend to remain
disciplined investors with a flexible and nimble approach to
aircraft acquisitions, focusing on situations that provide our
shareholders with stable and attractive returns. We remain
committed to generating sustainable cash flow and allocating
capital efficiently between value-enhancing investments and
returning capital to shareholders. To that end, our Board
increased the quarterly dividend by 10%, to $0.22 per share, and authorized a $100 million repurchase
program."
|
1
|
Refer to the selected
financial information accompanying this press release for a
reconciliation of GAAP to Non-GAAP numbers.
|
Third Quarter Results
Third quarter of 2014 lease rental and finance lease revenues
were $180.3 million, up $15.1 million, or 9% year over year, due
primarily to the $43.3 million impact
of aircraft acquisitions, offset by $21.1
million of lower revenues due to aircraft
dispositions.
Total revenues for the third quarter were $177.6 million, an increase of $7.5 million, or 4% above the previous
year. This increase was driven by $15.1 million in higher lease rental and finance
lease revenue and $8.7 million in
lower amortization of net lease discounts and
incentives.1 These improvements were offset
by lower maintenance revenue of $17.1
million.2
During the third quarter of 2014, in connection with our annual
fleet review, we shortened the expected lives and reduced the
residual values of two MD-11 freighter aircraft and recorded
impairment charges of $20.4 million,
or $0.25 per diluted common
share.
Adjusted EBITDA for the third quarter was $177.4 million, up $8.2
million, or 5% from the third quarter of 2013. The
increase was driven by higher lease rental and finance lease
revenue of $15.1 million, and higher
gain on sale of flight equipment of $8.3
million and other revenue and joint venture income of
$1.8 million. These
improvements were offset by lower maintenance revenue of
$17.1 million.
Net income for the third quarter was $19.2 million, up $93.7
million. The improvement was due primarily to non-cash
aircraft impairment charges associated with our annual fleet review
decreasing by $85.7 million in the
third quarter of 2014 versus the prior year. In addition,
total revenues increased $7.5
million, while gains from the sale of flight equipment were
$8.3 million higher. These
improvements were offset by higher depreciation expense of
$5.1 million from fleet net book
value growth, and higher income tax expense of $4.1 million.
Adjusted net income for the quarter was $26.5 million, up $95.6
million year over year, and reflects lower aircraft
impairment charges of $85.7 million,
higher total revenues of $7.5
million, higher gains on sale of flight equipment of
$8.3 million and lower adjusted
interest and maintenance expenses of $4.3
million. These improvements were offset by higher
depreciation of $5.1 million, higher
taxes of $4.1 million and lower other
income of $0.9 million.
|
1
|
The lower
amortization was due to a lease incentive reversal of $5.3 million
related to maintenance work which will not be performed during the
lease.
|
|
|
|
2
|
Driven by $12.1
million from an unscheduled lease termination in the third quarter
of 2013 and $8.7 million of contra-maintenance revenue in the third
quarter of 2014, related to engine restoration work completed by a
lessee prior to the scheduled return of two 737-800
aircraft.
|
Aviation Assets
During the first nine months of the year, we acquired 14
aircraft for more than $1.0
billion. Since the end of the third quarter, we have
acquired or expect to acquire, prior to the end of the first
quarter of 2015, three wide-body and 18 narrow-body aircraft for
more than $750 million.
During the first nine months of 2014, we sold 34 aircraft to
third parties for total proceeds of $447
million. These sold aircraft had a weighted average
age of approximately 17 years and included five freighter and
eleven older technology aircraft. During the third quarter of
2014, we sold eleven aircraft to third parties and one 777-300ER
aircraft on lease with LATAM to our joint venture with Ontario
Teachers' Pension Plan. As with the prior transactions with
our joint venture, this sale allows us to manage exposures and
pursue larger transactions while also enhancing our return on
equity.
As of September 30, 2014,
Aircastle owned 140 aircraft having a net book value of
$5.3 billion.
|
Owned
Aircraft as
of
September
30,
2013(1)
|
Owned
Aircraft as
of
September 30,
2014(1)
|
|
Flight Equipment Held
for Lease ($ mils.)
|
$ 5,086
|
$ 5,304
|
|
Unencumbered Flight
Equipment ($ mils.)
|
$ 2,712
|
$ 2,924
|
|
Number of
Aircraft
|
161
|
140
|
|
Number of
Unencumbered Aircraft
|
80
|
85
|
|
Passenger Aircraft (%
of NBV)
|
80%
|
84%
|
|
Freighter Aircraft (%
of NBV)
|
20%
|
16%
|
|
Weighted Average
Fleet Age – Combined
(years)(2)
|
10.0
|
8.6
|
|
Weighted Average
Remaining Combined Lease Term
(years)(3)
|
5.1
|
5.0
|
|
Weighted Average
Fleet Utilization for the three months
ended(4)
|
100%
|
100%
|
|
Portfolio Yield for
the three months ended(5)
|
13.7%
|
13.2%
|
|
Net Cash Interest
Margin(6)
|
9.6%
|
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.
|
Common Dividend
On October 31, 2014, Aircastle's
Board of Directors declared a fourth quarter 2014 cash dividend on
its common shares of $0.22 per share,
payable on December 15, 2014 to
shareholders of record on November
28, 2014. This is a 10% increase over the previous
quarter's cash dividend and represents the fifth dividend increase
since 2010.
Share Repurchase Authorization
On October 31, 2014, the Company's
Board of Directors authorized the repurchase of up to $100 million of the Company's common shares.
Under the program, the Company may purchase its common shares from
time to time in the open market or in privately negotiated
transactions. The amount and timing of the purchases will depend on
a number of factors including the price and availability of the
Company's common shares, trading volume and general market
conditions.
Conference Call
In connection with this earnings release, management will host
an earnings conference call on Tuesday,
November 4, 2014 at 10:00AM Eastern
time. All interested parties are welcome to
participate on the live call. The conference call can be
accessed by dialing (800) 768-6563 (from within the U.S. and
Canada) or (785) 830-7991 (from
outside of the U.S. and Canada)
ten minutes prior to the scheduled start and referencing the
passcode "1608678".
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 12:00PM
Eastern time on Thursday, December 4,
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 "1608678".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet
aircraft to airlines throughout the world. As of September 30, 2014, Aircastle's aircraft
portfolio consisted of 140 aircraft on lease with 61 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 proposed public offering of notes and
our ability to acquire, sell, lease or finance aircraft, raise
capital, pay dividends, and increase revenues, earnings, EBITDA,
Adjusted EBITDA, 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 press release.
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's 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 2013 Annual
Report on Form 10-K, and in our other filings with the SEC, press
releases and other communications. 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 press release. 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.
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Balance Sheets
|
|
(Dollars in
thousands, except share data)
|
|
|
December 31,
2013
|
|
September 30,
2014
|
|
|
|
|
(Unaudited)
|
|
ASSETS
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
654,613
|
|
|
$
|
474,338
|
|
|
Accounts
receivable
|
2,825
|
|
|
3,896
|
|
|
Restricted cash and
cash equivalents
|
122,773
|
|
|
114,392
|
|
|
Restricted liquidity
facility collateral
|
107,000
|
|
|
65,000
|
|
|
Flight equipment held
for lease, net of accumulated depreciation of $1,430,325 and
$1,350,950
|
5,044,410
|
|
|
5,232,940
|
|
|
Net investment in
finance leases
|
145,173
|
|
|
70,723
|
|
|
Unconsolidated equity
method investment
|
21,123
|
|
|
30,501
|
|
|
Other
assets
|
153,976
|
|
|
175,454
|
|
|
Total
assets
|
$
|
6,251,893
|
|
|
$
|
6,167,244
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Borrowings from
secured financings (including borrowings of ACS Ireland VIEs of
$152,545 and $78,418, respectively)
|
$
|
1,586,835
|
|
|
$
|
1,485,033
|
|
|
Borrowings from
unsecured financings
|
2,150,527
|
|
|
2,200,000
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
111,661
|
|
|
162,970
|
|
|
Lease rentals
received in advance
|
49,235
|
|
|
48,027
|
|
|
Liquidity
facility
|
107,000
|
|
|
65,000
|
|
|
Security
deposits
|
118,804
|
|
|
125,765
|
|
|
Maintenance
payments
|
442,432
|
|
|
422,157
|
|
|
Fair value of
derivative liabilities
|
39,992
|
|
|
3,090
|
|
|
Total
liabilities
|
4,606,486
|
|
|
4,512,042
|
|
|
|
|
|
|
|
|
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, 80,806,975
shares issued and outstanding at December 31, 2013; and
80,949,219 shares issued and outstanding at September 30,
2014
|
808
|
|
|
809
|
|
|
Additional paid-in
capital
|
1,562,106
|
|
|
1,563,685
|
|
|
Retained
earnings
|
158,398
|
|
|
137,858
|
|
|
Accumulated other
comprehensive loss
|
(75,905)
|
|
|
(47,150)
|
|
|
Total shareholders'
equity
|
1,645,407
|
|
|
1,655,202
|
|
|
Total liabilities and
shareholders' equity
|
$
|
6,251,893
|
|
|
$
|
6,167,244
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Statements of Income
|
|
(Dollars in
thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease rental
revenue
|
$
|
161,148
|
|
|
$
|
178,886
|
|
|
$
|
475,656
|
|
|
$
|
536,452
|
|
|
Finance lease
revenue
|
4,122
|
|
|
1,463
|
|
|
12,120
|
|
|
9,347
|
|
|
Amortization of lease
premiums, discounts and lease incentives
|
(9,737)
|
|
|
(1,075)
|
|
|
(25,527)
|
|
|
(7,252)
|
|
|
Maintenance revenue
(including contra maintenance revenue of $0
and $8,655 for the three months ended and $0 and $25,037 for
the
nine months ended September 30, 2013 and 2014,
respectively)
|
12,932
|
|
|
(4,189)
|
|
|
42,983
|
|
|
35,035
|
|
|
Total lease
revenue
|
168,465
|
|
|
175,085
|
|
|
505,232
|
|
|
573,582
|
|
|
Other
revenue
|
1,625
|
|
|
2,511
|
|
|
11,425
|
|
|
6,763
|
|
|
Total
revenues
|
170,090
|
|
|
177,596
|
|
|
516,657
|
|
|
580,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
70,469
|
|
|
75,519
|
|
|
212,448
|
|
|
225,230
|
|
|
Interest,
net
|
57,843
|
|
|
56,794
|
|
|
183,651
|
|
|
181,551
|
|
|
Selling, general and
administrative (including non-cash share based payment expense of
$1,067 and $949 for the three months ended and $2,931 and $3,167
for the nine months ended September 30, 2013 and 2014,
respectively)
|
12,830
|
|
|
13,817
|
|
|
39,297
|
|
|
41,818
|
|
|
Impairment of
Aircraft
|
106,136
|
|
|
20,436
|
|
|
112,335
|
|
|
67,005
|
|
|
Maintenance and other
costs
|
1,914
|
|
|
713
|
|
|
11,464
|
|
|
5,222
|
|
|
Total
expenses
|
249,192
|
|
|
167,279
|
|
|
559,195
|
|
|
520,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
flight equipment
|
3,092
|
|
|
11,390
|
|
|
25,601
|
|
|
13,384
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,570)
|
|
|
Other
|
855
|
|
|
1
|
|
|
5,016
|
|
|
758
|
|
|
Total other income
(expense)
|
3,947
|
|
|
11,391
|
|
|
30,617
|
|
|
(22,428)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
(75,155)
|
|
|
21,708
|
|
|
(11,921)
|
|
|
37,091
|
|
|
Income tax
provision
|
(597)
|
|
|
3,484
|
|
|
6,719
|
|
|
10,925
|
|
|
Earnings of
unconsolidated equity method investment, net of tax
|
—
|
|
|
927
|
|
|
—
|
|
|
1,898
|
|
|
Net income
(loss)
|
$
|
(74,558)
|
|
|
$
|
19,151
|
|
|
$
|
(18,640)
|
|
|
$
|
28,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share — Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
$
|
(0.95)
|
|
|
$
|
0.24
|
|
|
$
|
(0.26)
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share — Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
$
|
(0.95)
|
|
|
$
|
0.24
|
|
|
$
|
(0.26)
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.165
|
|
|
$
|
0.200
|
|
|
$
|
0.495
|
|
|
$
|
0.600
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Statements of Comprehensive Income
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(74,558)
|
|
|
$
|
19,151
|
|
|
$
|
(18,640)
|
|
|
$
|
28,064
|
|
|
Other comprehensive
income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in fair
value of derivatives, net of tax expense of
$78 and $21 for the three months ended and $389 and $825 for
the nine months ended September 30, 2013 and 2014,
respectively
|
1,798
|
|
|
1,643
|
|
|
13,751
|
|
|
2,025
|
|
|
Net derivative loss
reclassified into earnings
|
7,300
|
|
|
8,549
|
|
|
25,285
|
|
|
26,730
|
|
|
Other comprehensive
income
|
9,098
|
|
|
10,192
|
|
|
39,036
|
|
|
28,755
|
|
|
Total comprehensive
income (loss)
|
$
|
(65,460)
|
|
|
$
|
29,343
|
|
|
$
|
20,396
|
|
|
$
|
56,819
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Statements of Cash Flows
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
2013
|
|
2014
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(18,640)
|
|
|
$
|
28,064
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation
|
212,448
|
|
|
225,230
|
|
|
Amortization of
deferred financing costs
|
11,757
|
|
|
10,493
|
|
|
Amortization of net
lease discounts and lease incentives
|
25,527
|
|
|
7,252
|
|
|
Deferred income
taxes
|
3,419
|
|
|
(2,623)
|
|
|
Non-cash share based
payment expense
|
2,931
|
|
|
3,167
|
|
|
Cash flow hedges
reclassified into earnings
|
25,285
|
|
|
26,730
|
|
|
Security deposits and
maintenance payments included in earnings
|
(32,047)
|
|
|
(38,257)
|
|
|
Gain on sale of
flight equipment
|
(25,601)
|
|
|
(13,384)
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
36,570
|
|
|
Impairment of
aircraft
|
112,335
|
|
|
67,005
|
|
|
Other
|
(4,284)
|
|
|
(2,278)
|
|
|
Changes in certain
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
1,588
|
|
|
(1,603)
|
|
|
Other
assets
|
1,155
|
|
|
(1,691)
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
7,978
|
|
|
17,138
|
|
|
Lease rentals
received in advance
|
(4,538)
|
|
|
4,162
|
|
|
Net cash provided by
operating activities
|
319,313
|
|
|
365,975
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Acquisition and
improvement of flight equipment and lease incentives
|
(837,183)
|
|
|
(939,651)
|
|
|
Proceeds from sale of
flight equipment
|
285,199
|
|
|
563,882
|
|
|
Restricted cash and
cash equivalents related to sale of flight equipment
|
(2,200)
|
|
|
(24,606)
|
|
|
Aircraft purchase
deposits and progress payments
|
(5,655)
|
|
|
1,315
|
|
|
Net investment in
finance leases
|
(11,595)
|
|
|
(14,258)
|
|
|
Collections on
finance leases
|
6,658
|
|
|
8,096
|
|
|
Unconsolidated equity
method investment and associated costs
|
—
|
|
|
(8,592)
|
|
|
Distributions from
unconsolidated equity method investment in excess of
earnings
|
—
|
|
|
997
|
|
|
Principal repayments
on debt investment
|
42,001
|
|
|
—
|
|
|
Other
|
(852)
|
|
|
(466)
|
|
|
Net cash used in
investing activities
|
(523,627)
|
|
|
(413,283)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Issuance of shares
net of repurchases
|
197,478
|
|
|
(2,092)
|
|
|
Proceeds from notes
and term debt financings
|
78,230
|
|
|
803,200
|
|
|
Securitization and
term debt financing repayments
|
(430,482)
|
|
|
(895,459)
|
|
|
Debt extinguishment
costs
|
—
|
|
|
(32,835)
|
|
|
Deferred financing
costs
|
(2,910)
|
|
|
(15,843)
|
|
|
Restricted secured
liquidity facility collateral
|
—
|
|
|
42,000
|
|
|
Secured liquidity
facility collateral
|
—
|
|
|
(42,000)
|
|
|
Restricted cash and
cash equivalents related to financing activities
|
(77,701)
|
|
|
32,987
|
|
|
Security deposits and
maintenance payments received
|
154,303
|
|
|
131,136
|
|
|
Security deposits and
maintenance payments returned
|
(58,776)
|
|
|
(72,030)
|
|
|
Payments for
terminated cash flow hedges
|
—
|
|
|
(33,427)
|
|
|
Dividends
paid
|
(35,895)
|
|
|
(48,604)
|
|
|
Net cash used in
financing activities
|
(175,753)
|
|
|
(132,967)
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
(380,067)
|
|
|
(180,275)
|
|
|
Cash and cash
equivalents at beginning of period
|
618,217
|
|
|
654,613
|
|
|
Cash and cash
equivalents at end of period
|
$
|
238,150
|
|
|
$
|
474,338
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Supplemental
Financial Information
|
|
(Amount in
thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenues
|
$ 170,090
|
|
$ 177,596
|
|
$ 516,657
|
|
$ 580,345
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$ 62,894
|
|
$ 156,023
|
|
$ 409,705
|
|
$ 453,022
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 169,242
|
|
$ 177,408
|
|
$ 521,244
|
|
$ 559,083
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
$ (69,091)
|
|
$ 26,545
|
|
$ 4,361
|
|
$ 87,497
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss) allocable to common shares
|
$ (69,091)
|
|
$ 26,348
|
|
$ 4,327
|
|
$ 86,868
|
|
Per common share -
Basic
|
$ (0.88)
|
|
$ 0.33
|
|
$ 0.06
|
|
$ 1.08
|
|
Per common share -
Diluted
|
$ (0.88)
|
|
$ 0.33
|
|
$ 0.06
|
|
$ 1.08
|
|
|
|
|
|
|
|
|
|
Basic common shares
outstanding
|
78,544
|
|
80,390
|
|
71,462
|
|
80,389
|
|
Diluted common shares
outstanding
|
78,544
|
|
80,390
|
|
71,462
|
|
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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
(Dollars in
thousands)
|
|
Net income
(loss)
|
$
|
(74,558)
|
|
|
$
|
19,151
|
|
|
$
|
(18,640)
|
|
|
$
|
28,064
|
|
|
Depreciation
|
70,469
|
|
|
75,519
|
|
|
212,448
|
|
|
225,230
|
|
|
Amortization of net
lease discounts and lease incentives
|
9,737
|
|
|
1,075
|
|
|
25,527
|
|
|
7,252
|
|
|
Interest,
net
|
57,843
|
|
|
56,794
|
|
|
183,651
|
|
|
181,551
|
|
|
Income tax
provision
|
(597)
|
|
|
3,484
|
|
|
6,719
|
|
|
10,925
|
|
|
EBITDA
|
$
|
62,894
|
|
|
$
|
156,023
|
|
|
$
|
409,705
|
|
|
$
|
453,022
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
aircraft
|
106,136
|
|
|
20,436
|
|
|
112,335
|
|
|
67,005
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
36,570
|
|
|
Non-cash share
based payment expense
|
1,067
|
|
|
949
|
|
|
2,931
|
|
|
3,167
|
|
|
Gain on mark
to market of interest rate derivative contracts
|
(855)
|
|
|
—
|
|
|
(3,727)
|
|
|
(681)
|
|
|
Adjusted EBITDA
|
$
|
169,242
|
|
|
$
|
177,408
|
|
|
$
|
521,244
|
|
|
$
|
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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
(Dollars in
thousands)
|
|
Net income
(loss)
|
$
|
(74,558)
|
|
|
$
|
19,151
|
|
|
$
|
(18,640)
|
|
|
$
|
28,064
|
|
|
Loss on extinguishment
of debt(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
36,570
|
|
|
Loan termination
fee(1)
|
—
|
|
|
—
|
|
|
2,954
|
|
|
—
|
|
|
Ineffective portion
and termination of hedges(1)
|
91
|
|
|
(21)
|
|
|
2,222
|
|
|
41
|
|
|
Gain on mark to market
of interest rate derivative contracts(2)
|
(855)
|
|
|
—
|
|
|
(3,727)
|
|
|
(681)
|
|
|
Write-off of deferred
financing fees(1)
|
150
|
|
|
—
|
|
|
3,975
|
|
|
—
|
|
|
Non-cash share based
payment expense(3)
|
1,067
|
|
|
949
|
|
|
2,931
|
|
|
3,167
|
|
|
Term
Financing No. 1 hedge loss amortization
charges(1)
|
4,591
|
|
|
3,601
|
|
|
13,478
|
|
|
11,544
|
|
|
Securitization No. 1 hedge loss amortization charges
(1)
|
423
|
|
|
2,865
|
|
|
1,168
|
|
|
8,792
|
|
|
Adjusted net income
(loss)
|
$
|
(69,091)
|
|
|
$
|
26,545
|
|
|
$
|
4,361
|
|
|
$
|
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
|
|
Reconciliation of
Net Income Allocable to Common Shares
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
Three Months
Ended
September 30,
2014
|
|
Nine Months
Ended
September 30,
2014
|
|
|
Weighted-average
shares:
|
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.
|
|
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
September 30,
2013
|
|
Nine Months
Ended
September 30,
2013
|
|
|
Weighted-average
shares:
|
Shares
|
|
Percent(2)
|
|
Shares
|
|
Percent(2)
|
|
|
Common shares
outstanding – Basic
|
78,544
|
|
99.15%
|
|
71,462
|
|
99.22%
|
|
|
Unvested restricted
common shares
|
669
|
|
0.85%
|
|
563
|
|
0.78%
|
|
|
Total
weighted-average shares outstanding
|
79,214
|
|
100.00%
|
|
72,025
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
$(74,558)
|
|
100.00%
|
|
$(18,640)
|
|
100.00%
|
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares
|
—
|
|
(0.00%)
|
|
—
|
|
(0.00%)
|
|
|
Earnings available to
common shares
|
$(74,558)
|
|
100.00%
|
|
$(18,640)
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
$(69,091)
|
|
100.00%
|
|
$4,361
|
|
100.00%
|
|
|
Amounts allocated to
unvested restricted shares
|
—
|
|
(0.00%)
|
|
(34)
|
|
(0.78%)
|
|
|
Amounts allocated to
common shares
|
$(69,091)
|
|
100.00%
|
|
$4,327
|
|
99.22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three and
six months ended September 30, 2013 the company had no dilutive
shares.
|
|
|
(2) Percentages
rounded to two decimal places.
|
|
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
SOURCE Aircastle Limited