STAMFORD, Conn., Feb. 19, 2015 /PRNewswire/ --
Key Financial Metrics
- Total revenues were $238.3
million for the fourth quarter and $818.6 million for the full year, up 24% and 16%
year over year, respectively
- Net income was $72.8 million, or
$0.90 per diluted common share for
the fourth quarter, and $100.8
million, or $1.25 per diluted
common share, for the full year
- Adjusted net income was $80.1
million, or $0.99 per diluted
common share for the fourth quarter, and $167.6 million, or $2.07 per diluted common share, for the full
year
- Adjusted EBITDA was $233.2
million for the fourth quarter and $792.3 million for the full year, up 19% and 10%
year over year, respectively
- Full year 2014 cash ROE was 11.7% and net cash interest margin
was 10.0%
Highlights
- Upgraded our portfolio during 2014 through $1.8 billion in acquisitions and the sale of 49
aircraft for $833 million
- Reduced our average interest cost in 2014 to 4.69% from 5.37%
the prior year
- 35th consecutive quarterly dividend declared by
Aircastle's Board of Directors
- Grew our joint venture with Ontario Teachers' to $545 million in assets at year end
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR)
reported fourth quarter 2014 net income of $72.8 million, or $0.90 per diluted common share and adjusted net
income of $80.1 million, or
$0.99 per diluted common share.
Net income for the year ended December 31,
2014 was $100.8 million, or
$1.25 per diluted common share, and
adjusted net income was $167.6
million, or $2.07 per diluted
common share. The fourth quarter results included total
revenues of $238.3 million, an
increase of 24%, versus $192.0
million in the fourth quarter of 2013. For the full
year 2014, total revenues were $818.6
million, up 16% versus $708.6
million in 2013.
Commenting on the results, Ron
Wainshal, Aircastle's CEO, stated "2014 was a year full of
significant activity in which we solidified Aircastle's position as
the leading value investor in the aircraft leasing industry.
Aircastle's strategy is differentiated from that of our
competitors, and we saw the merits of this approach in the great
progress we made over the past year in growing our business and
improving our financial metrics while simultaneously improving the
quality of our portfolio despite a very competitive and fluid
business environment."
Mr. Wainshal continued, "We plan to continue demonstrating the
competitive advantages of our leading position as a value investor,
supported by our world-class team, our flexible capital structure
and our key long term shareholders. We are gratified and
energized by the steady progress we are making. We are intent
on driving further improvements in our financial performance, and I
believe achieving an investment grade credit rating will bring us
closer to realizing the company's full potential."
Financial
Results
|
(in thousands, except
share data)
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$ 191,988
|
|
$ 238,257
|
|
$ 708,645
|
|
$ 818,602
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 195,965
|
|
$ 233,200
|
|
$ 717,209
|
|
$ 792,283
|
|
|
|
|
|
|
|
|
Net income
|
$ 48,421
|
|
$ 72,764
|
|
$ 29,781
|
|
$ 100,828
|
Per common share - Diluted
|
$ 0.60
|
|
$ 0.90
|
|
$ 0.40
|
|
$ 1.25
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$ 54,899
|
|
$ 80,145
|
|
$ 59,260
|
|
$ 167,642
|
Per common share - Diluted
|
$ 0.68
|
|
$ 0.99
|
|
$ 0.80
|
|
$ 2.07
|
Fourth Quarter Results
Total revenues for the fourth quarter were $238.3 million, an increase of $46.3 million, or 24% from the previous year,
driven by higher maintenance revenues of $27.6 million reflecting the early return of
several aircraft on lease with Russia-based airlines and higher lease rentals
of $8.9 million.
Adjusted EBITDA for the fourth quarter was $233.2 million, up $37.2
million, or 19% from the fourth quarter of 2013, due
primarily to higher total revenues, excluding amortization of net
lease discounts and incentives, of $38.3
million.
Adjusted net income for the quarter was $80.1 million, up $25.2
million or 46%, year over year. The increase was due
primarily to higher total revenues of $46.3
million partially offset by higher non-cash impairment
charges of $22.0 million primarily
related to the early return and exit of aircraft.
Full Year Results
Total revenues for 2014 were $818.6
million, an increase of $110.0
million, up 16% from the previous year. The increase
reflects higher lease rental and finance lease revenue of
$64.5 million, higher maintenance
revenue of $19.7 million and lower
amortization of lease premiums, discounts and lease incentive
amortization of $26.2 million.
Adjusted EBITDA for the full year was $792.3 million, up $75.1
million or 10% versus 2013, reflecting higher total revenues
excluding amortization of net lease discounts and lease incentives
of $83.7 million, partially offset by
lower gains from the sale of flight equipment of $14.1 million.
Adjusted net income for the full year was $167.6 million compared to $59.3 million in 2013, an increase of
$108.4 million. Higher total
revenues of $110.0 million and lower
adjusted operating expenses of $15.4
million were partially offset by lower gains from the sale
of flight equipment of $14.1
million.
Aviation Assets
During 2014, we acquired 35 aircraft for $1.8 billion, including 21 aircraft for
$749.2 million during the fourth
quarter. Most of our 2014 acquisitions by value were aircraft
less than five years old that are on long term leases with
relatively strong operators. Additionally, we also acquired
$467.4 million in mid-aged
narrow-body aircraft, including twelve aircraft through a purchase
and lease-back transaction with a major European flag
carrier. In many cases, we believe we were successful in
winning business due to our ability to move quickly and reliably
given our cash reserves and team strengths.
During 2014, we sold 49 aircraft for net proceeds of
$833.0 million, resulting in a
pre-tax impact of $40.2
million. Three of these aircraft were sold to our
joint venture with Ontario Teachers', which grew to $545 million in total assets at year end
2014. We continue to use the joint venture to pursue larger
transactions and help us manage exposure concentrations.
The other 46 sold aircraft had an average age of 19 years and
consisted of a mix of "exit" and "opportunistic" sales. Exit
sales aircraft are generally nearing the end of their economic
lives and are, in most cases, older technology models.
Consistent with our strategy to reduce exposure to the air cargo
market, our sales in this category include five freighter
aircraft. Opportunistic sales entail situations where we
sought to capture strong market demand and have enabled us to
realize gains.
($ in
thousands)
|
|
Number of
Aircraft
|
|
Maintenance
Revenue
|
|
Lease
Incentive
Revenue
|
|
Gain (Loss) on
Sale of Flight
Equipment
|
|
Impairment
|
|
Pre-tax
Impact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opportunistic
sales
|
|
28
|
|
$
|
3,171
|
|
$
|
—
|
|
$
|
38,363
|
|
$
|
—
|
|
$
|
41,534
|
Exit Sales
|
|
19
|
|
56,129
|
|
776
|
|
(15,217)
|
|
(24,940)
|
|
16,748
|
Total
Sales
|
|
47
|
|
59,300
|
|
776
|
|
23,146
|
|
(24,940)
|
|
58,282
|
Freighters Held for
Sale1
|
|
2
|
|
9,137
|
|
$
|
3,626
|
|
—
|
|
(30,877)
|
|
(18,114)
|
Total
|
|
49
|
|
$
|
68,437
|
|
$
|
4,402
|
|
$
|
23,146
|
|
$
|
(55,817)
|
|
$
|
40,168
|
1
|
Includes two 747-400
converted freighter aircraft which were designated for sale. One of
these aircraft was sold in January, 2015 while the other is under a
consignment contract and is in the process of being parted
out.
|
Given the sharp deterioration of business conditions and a
significantly weakened home currency since the start of the fourth
quarter, we reduced our passenger aircraft exposure to Russia-based airlines from ten to three
aircraft today. One of these aircraft was sold during the
fourth quarter for a modest profit and another has been
leased. We are in the process of remarketing the other
aircraft, which we expect to have on lease by the end of the second
quarter of 2015.
As of December 31, 2014, Aircastle
owned 148 aircraft having a net book value of $5.7 billion.
|
Owned
Aircraft as
of
December 31,
2012(1)
|
|
Owned
Aircraft as
of
December 31,
2013(1)
|
|
Owned
Aircraft as
of
December 31,
2014(1)
|
Total Flight
Equipment Held for Lease ($ mils.)
|
$
|
4,783
|
|
|
$
|
5,190
|
|
|
$
|
5,686
|
|
Unencumbered Flight
Equipment Held for Lease ($ mils.)
|
$
|
2,092
|
|
|
$
|
2,655
|
|
|
$
|
3,341
|
|
Number of
Aircraft
|
159
|
|
|
162
|
|
|
148
|
|
Number of
Unencumbered Aircraft
|
72
|
|
|
80
|
|
|
95
|
|
Passenger Aircraft (%
of NBV)
|
71%
|
|
|
81%
|
|
|
86%
|
|
Freighter Aircraft (%
of NBV)
|
29%
|
|
|
19%
|
|
|
14%
|
|
Weighted Average
Fleet Age (years)(2)
|
10.7
|
|
|
9.9
|
|
|
8.4
|
|
Weighted Average
Remaining Lease Term
(years)(3)
|
5.0
|
|
|
5.0
|
|
|
5.4
|
|
Weighted Average
Fleet Utilization for the year
ended(4)
|
98.8%
|
|
|
98.7%
|
|
|
99.6%
|
|
Portfolio Yield for
the year ended(5)
|
13.8%
|
|
|
13.6%
|
|
|
13.3%
|
|
Net Cash Interest
Margin(6)
|
10.0%
|
|
|
9.7%
|
|
|
10.0%
|
|
(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.
|
(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.
|
Marubeni Shareholder Agreement Update
On February 18, 2015, Aircastle
Limited and The Marubeni Corporation of Japan ("Marubeni") modified the terms of the
existing Shareholder Agreement dated as of June 6, 2013. Under the existing
Shareholder Agreement, Marubeni was restricted to holding a maximum
of 21.0% of the voting power of the Company until July 12, 2016, and 27.5% thereafter until the
agreement expired on July 12,
2023. The amendment permits Marubeni to acquire up to
27.5% of the voting power in the Company through secondary market
purchases. In return, the term of the standstill provision of
the Shareholder Agreement will be extended from July 12, 2023 until January 12, 2025.
Financing Activity
During 2014, we raised more than $900
million of senior debt which reduced the average interest
cost to 4.69% from 5.37% while maintaining our average remaining
debt term at 4.2 years. This activity included issuing
$500 million of 5.125% senior
unsecured notes due in 2021 in March and using the proceeds to
redeem $450 million of 9.75% senior
unsecured notes that were due in 2018. In connection with the
redemption of the 9.75% notes, we recorded a $36.6 million debt extinguishment expense, which
included a $32.8 million call premium
paid to the noteholders during the second quarter. We also
completed $303 million of secured
borrowings related to various aircraft and increased the size and
duration of our unsecured revolving credit facility.
Thus far in 2015, we issued $500
million in unsecured 5.50% Senior Notes due 2022, and
further increased the size of our unsecured revolving credit
facility to $600 million. This
additional capital provides us with increased resources to pursue
aircraft acquisitions while also enhancing our financial
flexibility.
Common Dividend
On February 17, 2015, Aircastle's
Board of Directors declared a first quarter 2015 cash dividend on
its common shares of $0.22 per share,
payable on March 13, 2015 to
shareholders of record on March 6,
2015. This is our 35th consecutive dividend.
During 2014, Aircastle increased the dividend to common
shareholders to the current quarterly rate of $0.22 per share, a 10% increase over the
quarterly rate at the end of 2013.
Conference Call
In connection with this earnings release, management will host
an earnings conference call on Thursday,
February 19, 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 (800) 210-9006 (from within the U.S. and
Canada) or (719) 325-2168 (from
outside of the U.S. and Canada)
ten minutes prior to the scheduled start and referencing the
passcode "9750029".
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 Saturday, March 21,
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
"9750029".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet
aircraft to airlines throughout the world. As of December 31, 2014, Aircastle's aircraft portfolio
consisted of 148 aircraft on lease with 54 customers located in 34
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, Adjusted Net Income,
Cash ROE and Net Cash Interest Margin 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 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'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
Securities and Exchange Commission ("SEC"), including as described
in Item 1A. "Risk Factors" 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
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
|
|
2014
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
654,613
|
|
|
$
|
169,656
|
|
Accounts
receivable
|
2,825
|
|
|
3,334
|
|
Restricted cash and
cash equivalents
|
122,773
|
|
|
98,884
|
|
Restricted liquidity
facility collateral
|
107,000
|
|
|
65,000
|
|
Flight equipment held
for lease, net of accumulated depreciation of $1,430,325 and
$1,294,063
|
5,044,410
|
|
|
5,579,718
|
|
Net investment in
finance leases
|
145,173
|
|
|
106,651
|
|
Unconsolidated equity
method investment
|
21,123
|
|
|
46,453
|
|
Other
assets
|
153,976
|
|
|
157,317
|
|
Total
assets
|
$
|
6,251,893
|
|
|
$
|
6,227,013
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Borrowings from
secured financings (including borrowings of ACS Ireland VIEs of
$152,545 and $64,183, respectively)
|
$
|
1,586,835
|
|
|
$
|
1,396,454
|
|
Borrowings from
unsecured financings
|
2,150,527
|
|
|
2,400,000
|
|
Accounts payable,
accrued expenses and other liabilities
|
111,661
|
|
|
137,984
|
|
Lease rentals
received in advance
|
49,235
|
|
|
53,216
|
|
Liquidity
facility
|
107,000
|
|
|
65,000
|
|
Security
deposits
|
118,804
|
|
|
117,689
|
|
Maintenance
payments
|
442,432
|
|
|
333,456
|
|
Fair value of
derivative liabilities
|
39,992
|
|
|
2,879
|
|
Total
liabilities
|
4,606,486
|
|
|
4,506,678
|
|
|
|
|
|
|
|
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
80,983,249 shares issued and outstanding at December 31,
2014
|
808
|
|
|
810
|
|
Additional paid-in
capital
|
1,562,106
|
|
|
1,565,180
|
|
Retained
earnings
|
158,398
|
|
|
192,805
|
|
Accumulated other
comprehensive loss
|
(75,905)
|
|
|
(38,460)
|
|
Total shareholders'
equity
|
1,645,407
|
|
|
1,720,335
|
|
Total liabilities and
shareholders' equity
|
$
|
6,251,893
|
|
|
$
|
6,227,013
|
|
Aircastle Limited
and Subsidiaries
|
Consolidated
Statements of Income
|
(Dollars in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Lease rental
revenue
|
$
|
169,273
|
|
|
$
|
178,202
|
|
|
$
|
644,929
|
|
|
$
|
714,654
|
|
Finance lease
revenue
|
4,045
|
|
|
1,559
|
|
|
16,165
|
|
|
10,906
|
|
Amortization of lease
premiums, discounts and lease incentives
|
(6,884)
|
|
|
1,080
|
|
|
(32,411)
|
|
|
(6,172)
|
|
Maintenance revenue
(including contra maintenance revenue of $0 and $6,217 for the
three months ended and $0 and $31,254 for the twelve months ended
December 31, 2013 and 2014, respectively)
|
25,359
|
|
|
52,971
|
|
|
68,342
|
|
|
88,006
|
|
Total lease
revenue
|
191,793
|
|
|
233,812
|
|
|
697,025
|
|
|
807,394
|
|
Other
revenue
|
195
|
|
|
4,445
|
|
|
11,620
|
|
|
11,208
|
|
Total
revenues
|
191,988
|
|
|
238,257
|
|
|
708,645
|
|
|
818,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
72,476
|
|
|
74,135
|
|
|
284,924
|
|
|
299,365
|
|
Interest,
net
|
60,106
|
|
|
56,827
|
|
|
243,757
|
|
|
238,378
|
|
Selling, general and
administrative (including non-cash share based payment expense of
$1,638 and $1,077 for the three months ended and $4,569 and $4,244
for the twelve months ended December 31, 2013 and 2014,
respectively)
|
14,139
|
|
|
13,955
|
|
|
53,436
|
|
|
55,773
|
|
Impairment of
Aircraft
|
4,971
|
|
|
26,988
|
|
|
117,306
|
|
|
93,993
|
|
Maintenance and other
costs
|
2,167
|
|
|
2,017
|
|
|
13,631
|
|
|
7,239
|
|
Total
expenses
|
153,859
|
|
|
173,922
|
|
|
713,054
|
|
|
694,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
flight equipment
|
11,619
|
|
|
9,762
|
|
|
37,220
|
|
|
23,146
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,570)
|
|
Other
|
1,116
|
|
|
449
|
|
|
6,132
|
|
|
1,207
|
|
Total other income
(expense)
|
12,735
|
|
|
10,211
|
|
|
43,352
|
|
|
(12,217)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
50,864
|
|
|
74,546
|
|
|
38,943
|
|
|
111,637
|
|
Income tax
provision
|
2,496
|
|
|
2,938
|
|
|
9,215
|
|
|
13,863
|
|
Earnings of
unconsolidated equity method investment, net of tax
|
53
|
|
|
1,156
|
|
|
53
|
|
|
3,054
|
|
Net income
|
$
|
48,421
|
|
|
$
|
72,764
|
|
|
$
|
29,781
|
|
|
$
|
100,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share — Basic:
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.60
|
|
|
$
|
0.90
|
|
|
$
|
0.40
|
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share — Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.60
|
|
|
$
|
0.90
|
|
|
$
|
0.40
|
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
$
|
0.695
|
|
|
$
|
0.82
|
|
Aircastle Limited
and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(Dollars in
thousands)
|
|
|
Years Ended
December 31,
|
|
2013
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
29,781
|
|
|
$
|
100,828
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation
|
284,924
|
|
|
299,365
|
|
Amortization of
deferred financing costs
|
14,719
|
|
|
13,961
|
|
Amortization of net
lease discounts and lease incentives
|
32,411
|
|
|
6,172
|
|
Deferred income
taxes
|
4,416
|
|
|
2,863
|
|
Non-cash share based
payment expense
|
4,569
|
|
|
4,244
|
|
Cash flow hedges
reclassified into earnings
|
33,265
|
|
|
34,979
|
|
Security deposits and
maintenance payments included in earnings
|
(60,112)
|
|
|
(107,031)
|
|
Gain on the sale of
flight equipment
|
(37,220)
|
|
|
(23,146)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
36,570
|
|
Impairment of
aircraft
|
117,306
|
|
|
93,993
|
|
Other
|
(5,323)
|
|
|
(878)
|
|
Changes on certain
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
3,397
|
|
|
(509)
|
|
Restricted cash and
cash equivalents related to operating activities
|
—
|
|
|
—
|
|
Other
assets
|
1,164
|
|
|
(11,146)
|
|
Accounts payable,
accrued expenses and other liabilities
|
3,016
|
|
|
1,345
|
|
Lease rentals
received in advance
|
(2,276)
|
|
|
7,176
|
|
Net cash provided by
operating activities
|
424,037
|
|
|
458,786
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Acquisition and
improvement of flight equipment
|
(1,263,706)
|
|
|
(1,672,460)
|
|
Proceeds from sale of
flight equipment
|
568,045
|
|
|
832,961
|
|
Restricted cash and
cash equivalents related to sale of flight equipment
|
—
|
|
|
—
|
|
Aircraft purchase
deposits and progress payments, net of returned deposits and
aircraft sales deposits
|
(6,094)
|
|
|
—
|
|
Net investment in
finance leases
|
(11,595)
|
|
|
(14,258)
|
|
Collections on
finance leases
|
9,508
|
|
|
10,312
|
|
Unconsolidated equity
method investment and associated costs
|
(20,189)
|
|
|
(18,255)
|
|
Distributions from
unconsolidated equity method investment in excess of
earnings
|
—
|
|
|
667
|
|
Purchase of debt
investment
|
—
|
|
|
—
|
|
Principal repayments
on debt investment
|
42,001
|
|
|
—
|
|
Other
|
(903)
|
|
|
(569)
|
|
Net cash used in
investing activities
|
(682,933)
|
|
|
(861,602)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Issuance of shares
net of repurchases
|
197,437
|
|
|
(2,092)
|
|
Proceeds from notes
and term debt financings
|
563,230
|
|
|
1,003,200
|
|
Securitization and
term debt financing repayments
|
(510,162)
|
|
|
(984,517)
|
|
Deferred financing
costs
|
(10,865)
|
|
|
(15,843)
|
|
Restricted secured
liquidity facility collateral
|
—
|
|
|
42,000
|
|
Secured liquidity
facility collateral
|
—
|
|
|
(42,000)
|
|
Restricted cash and
cash equivalents related to financing activities
|
(10,831)
|
|
|
23,889
|
|
Debt extinguishment
costs
|
—
|
|
|
(32,835)
|
|
Security deposits and
maintenance payments received
|
200,678
|
|
|
178,805
|
|
Security deposits and
maintenance payments returned
|
(82,137)
|
|
|
(152,900)
|
|
Payments for
terminated cash flow hedges and payment for option
|
—
|
|
|
(33,427)
|
|
Dividends
paid
|
(52,058)
|
|
|
(66,421)
|
|
Net cash provided by
financing activities
|
295,292
|
|
|
(82,141)
|
|
Net increase in
cash and cash equivalents
|
36,396
|
|
|
(484,957)
|
|
Cash and cash
equivalents at beginning of year
|
618,217
|
|
|
654,613
|
|
Cash and cash
equivalents at end of year
|
$
|
654,613
|
|
|
$
|
169,656
|
|
Aircastle Limited
and Subsidiaries
|
Supplemental
Financial Information
|
(Amount in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Twelve Months
Ended
December
31,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
Revenues
|
$ 191,988
|
|
$ 238,257
|
|
$ 708,645
|
|
$ 818,602
|
|
|
|
|
|
|
|
|
EBITDA
|
$ 190,383
|
|
$ 205,584
|
|
$ 600,088
|
|
$ 658,606
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 195,965
|
|
$ 233,200
|
|
$ 717,209
|
|
$ 792,283
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$ 54,899
|
|
$ 80,145
|
|
$ 59,260
|
|
$ 167,642
|
|
|
|
|
|
|
|
|
Adjusted net income
allocable to common shares
|
$ 54,433
|
|
$ 79,545
|
|
$ 58,786
|
|
$ 166,425
|
Per common share -
Basic
|
$ 0.68
|
|
$ 0.99
|
|
$ 0.80
|
|
$ 2.07
|
Per common share -
Diluted
|
$ 0.68
|
|
$ 0.99
|
|
$ 0.80
|
|
$ 2.07
|
|
|
|
|
|
|
|
|
Basic common shares
outstanding
|
80,154
|
|
80,390
|
|
73,653
|
|
80,389
|
Diluted common shares
outstanding
|
80,154
|
|
80,390
|
|
73,653
|
|
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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
(Dollars in
thousands)
|
Net income
(loss)
|
$
|
48,421
|
|
|
$
|
72,764
|
|
|
$
|
29,781
|
|
|
$
|
100,828
|
|
Depreciation
|
72,476
|
|
|
74,135
|
|
|
284,924
|
|
|
299,365
|
|
Amortization of net
lease discounts and lease incentives
|
6,884
|
|
|
(1,080)
|
|
|
32,411
|
|
|
6,172
|
|
Interest,
net
|
60,106
|
|
|
56,827
|
|
|
243,757
|
|
|
238,378
|
|
Income tax
provision
|
2,496
|
|
|
2,938
|
|
|
9,215
|
|
|
13,863
|
|
EBITDA
|
$
|
190,383
|
|
|
$
|
205,584
|
|
|
$
|
600,088
|
|
|
$
|
658,606
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
aircraft
|
4,971
|
|
|
26,988
|
|
|
117,306
|
|
|
93,993
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
36,570
|
|
Non-cash share
based payment expense
|
1,638
|
|
|
1,077
|
|
|
4,569
|
|
|
4,244
|
|
Gain on mark
to market of interest rate derivative contracts
|
(1,027)
|
|
|
(449)
|
|
|
(4,754)
|
|
|
(1,130)
|
|
Adjusted EBITDA
|
$
|
195,965
|
|
|
$
|
233,200
|
|
|
$
|
717,209
|
|
|
$
|
792,283
|
|
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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
(Dollars in
thousands)
|
Net income
|
$
|
48,421
|
|
|
$
|
72,764
|
|
|
$
|
29,781
|
|
|
$
|
100,828
|
|
Loss on extinguishment
of debt(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
36,570
|
|
Loan termination
fee(1)
|
—
|
|
|
—
|
|
|
2,954
|
|
|
—
|
|
Ineffective portion
and termination of hedges(1)
|
171
|
|
|
619
|
|
|
2,393
|
|
|
660
|
|
Gain on mark to market
of interest rate derivative contracts(2)
|
(1,027)
|
|
|
(449)
|
|
|
(4,754)
|
|
|
(1,130)
|
|
Write-off of deferred
financing fees(1)
|
—
|
|
|
—
|
|
|
3,975
|
|
|
—
|
|
Non-cash share based
payment expense(3)
|
1,638
|
|
|
1,077
|
|
|
4,569
|
|
|
4,244
|
|
Term
Financing No. 1 hedge loss amortization
charges(1)
|
4,365
|
|
|
3,310
|
|
|
17,843
|
|
|
14,854
|
|
Securitization No. 1 hedge loss amortization charges
(1)
|
1,331
|
|
|
2,824
|
|
|
2,499
|
|
|
11,616
|
|
Adjusted net
income
|
$
|
54,899
|
|
|
$
|
80,145
|
|
|
$
|
59,260
|
|
|
$
|
167,642
|
|
(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)
|
|
Quarter
Ending
|
|
Cash Flow
from
Operations
|
|
Collections on
Finance Leases
|
|
Gain/(Loss) on
Sale of Flight
Equipment
|
|
Depreciation
|
|
Distributions
from Joint
Venture
|
|
Cash
Earnings
|
|
Cash Earnings
Trailing 12
Months
|
|
LTM Average
Shareholders'
Equity
|
|
Cash ROE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2012
|
|
$72,966
|
|
|
|
$196
|
|
($64,514)
|
|
|
|
$8,648
|
|
$151,436
|
|
$1,391,290
|
|
10.9%
|
6/30/2012
|
|
$119,142
|
|
$1,476
|
|
$2,855
|
|
($67,097)
|
|
|
|
$56,376
|
|
$156,313
|
|
$1,407,491
|
|
11.1%
|
9/30/2012
|
|
$113,848
|
|
$565
|
|
$11
|
|
($68,413)
|
|
|
|
$46,011
|
|
$161,569
|
|
$1,413,218
|
|
11.4%
|
12/31/2012
|
|
$121,321
|
|
$1,811
|
|
$2,685
|
|
($69,896)
|
|
|
|
$55,921
|
|
$166,956
|
|
$1,425,658
|
|
11.7%
|
3/31/2013
|
|
$92,747
|
|
$1,845
|
|
$1,192
|
|
($69,900)
|
|
|
|
$25,884
|
|
$184,192
|
|
$1,431,146
|
|
12.9%
|
6/30/2013
|
|
$100,692
|
|
$2,207
|
|
$21,317
|
|
($72,079)
|
|
|
|
$52,137
|
|
$179,953
|
|
$1,436,324
|
|
12.5%
|
9/30/2013
|
|
$125,874
|
|
$2,606
|
|
$3,092
|
|
($70,469)
|
|
|
|
$61,103
|
|
$195,045
|
|
$1,462,886
|
|
13.3%
|
12/31/2013
|
|
$104,724
|
|
$2,850
|
|
$11,619
|
|
($72,476)
|
|
|
|
$46,717
|
|
$185,841
|
|
$1,513,156
|
|
12.3%
|
3/31/2014
|
|
$102,991
|
|
$2,773
|
|
$1,110
|
|
($73,927)
|
|
$388
|
|
$33,335
|
|
$193,292
|
|
$1,558,848
|
|
12.4%
|
6/30/2014
|
|
$111,014
|
|
$3,446
|
|
$884
|
|
($75,784)
|
|
$263
|
|
$39,823
|
|
$180,978
|
|
$1,600,660
|
|
11.3%
|
9/30/2014
|
|
$151,970
|
|
$1,877
|
|
$11,390
|
|
($75,519)
|
|
$346
|
|
$90,064
|
|
$209,939
|
|
$1,637,202
|
|
12.8%
|
12/31/2014
|
|
$92,811
|
|
$2,216
|
|
$9,762
|
|
($74,135)
|
|
($330)
|
|
$30,324
|
|
$193,546
|
|
$1,661,240
|
|
11.7%
|
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
Interest1
|
|
Annualized Net
Cash Interest
Margin
|
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
|
|
$
51,684
|
|
9.5%
|
Q2:14
|
|
$
5,582,359
|
|
$
183,231
|
|
$
48,173
|
|
9.7%
|
Q3:14
|
|
$
5,412,299
|
|
$
178,886
|
|
$
44,820
|
|
9.9%
|
Q4:14
|
|
$
5,373,733
|
|
$
178,202
|
|
$
44,459
|
|
10.0%
|
1.
|
Excludes loan
termination payments of $3.2 million and $3.0 million in the second
quarter of 2011 and 2013 respectively.
|
Aircastle Limited
and Subsidiaries
|
Selected Financial
Guidance Elements for the First Quarter of 2015
|
($ in millions,
except for percentages)
|
(Unaudited)
|
|
Guidance
Item
|
Q1:15
|
Lease rental
revenue1
|
$177 -
$180
|
Finance lease
revenue
|
$1 - $2
|
Maintenance
revenue
|
$15 - $17
|
Amortization of net
lease discounts and lease incentives
|
$4 - $5
|
SG&A
|
$13 - $14
|
Depreciation
|
$75 - $77
|
Interest, net
2
|
$62 - $64
|
Gain on
sale
|
$0 - $8
|
Full year effective
tax rate
|
12%-13%
|
1.
|
Reflects no rental
revenue for five mid-aged 737-800 aircraft that were removed from
Russia and an unusual level of lease extension and transition
activity in late Q4:14 and early Q1:15. These will have a
combined effect of $5-6 million per quarter.
|
2.
|
Includes non-cash
hedge loss amortization charges related to the payoff of Term
Financing No.1 and Securitization No.1 of $5.9 million.
|
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
December 31,
2014
|
|
Twelve Months
Ended
December 31,
2014
|
|
Weighted-average
shares:
|
Shares
|
|
Percent(2)
|
|
Shares
|
|
Percent(2)
|
|
Common shares
outstanding – Basic
|
80,390
|
|
|
99.25%
|
|
|
80,389
|
|
|
99.27%
|
|
Unvested restricted
common shares
|
606
|
|
|
0.75%
|
|
|
588
|
|
|
0.73%
|
|
Total
weighted-average shares outstanding
|
80,996
|
|
|
100.00%
|
|
|
80,977
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$72,764
|
|
|
100.00%
|
|
|
$100,828
|
|
|
100.00%
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares
|
(544)
|
|
|
(0.75%)
|
|
|
(732)
|
|
|
(0.73%)
|
|
Earnings available to
common shares
|
$72,220
|
|
|
99.25%
|
|
|
$100,096
|
|
|
99.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$80,145
|
|
|
100.00%
|
|
|
$167,642
|
|
|
100.00%
|
|
Amounts allocated to
unvested restricted shares
|
(600)
|
|
|
(0.75%)
|
|
|
(1,217)
|
|
|
(0.73%)
|
|
Amounts allocated to
common shares
|
$79,545
|
|
|
99.25%
|
|
|
$166,425
|
|
|
99.27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For the three and
twelve months ended December 31, 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
December 31,
2013
|
|
Twelve Months
Ended
December 31,
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 shares
|
(466)
|
|
|
(0.85%)
|
|
|
(474)
|
|
|
(0.80%)
|
|
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.
|
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
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aircastle-announces-fourth-quarter-and-full-year-2014-results-300038306.html
SOURCE Aircastle Limited