STAMFORD, Conn., Nov. 1, 2016 /PRNewswire/ --
Key Financial Metrics
- Total revenues were $194.7
million for the third quarter of 2016
- Total lease rental and finance and sales-type lease revenues
were $187.3 million
- Net income was $27.4 million, or
$0.35 per diluted common share versus
a net loss of ($14.0) million, or
($0.17) per diluted common share in
the third quarter of 2015
- Adjusted net income(1) was $29.7 million, or $0.38 per diluted common share versus an adjusted
net loss of ($9.7) million, or
($0.12) per diluted common share in
the third quarter of 2015
- Adjusted EBITDA(1) was $181.1
million for the third quarter
- Cash ROE(1) was 12.4%; net cash interest
margin(1) was 8.7%
Highlights
- Acquired ten aircraft for $303
million during the third quarter, and 32 aircraft for
$961 million year-to-date
- Sold nineteen aircraft year-to-date, including five
wide-bodies, two freighters, and six other aircraft to our joint
ventures
- Secured customers for our remaining 2016 lease expirations and
made strong progress with next year's lease placements
- Raised $1.1 billion in new
financing thus far in 2016 while broadening our funding
sources
- Declared our 42nd consecutive quarterly dividend and
increased it by 8.3%
(1) Refer to the selected financial information
accompanying this press release for a reconciliation of GAAP to
Non-GAAP numbers.
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR)
reported a third quarter 2016 net income of $27.4 million, or $0.35 per diluted common share, and adjusted net
income of $29.7 million, or
$0.38 per diluted common share.
The third quarter results included total revenues of $194.7 million, a decrease of 8.2%, versus
$212.1 million in the third quarter
of 2015.
Commenting on the results, Ron
Wainshal, Aircastle's CEO, stated "Over the past several
months, investor demand for aircraft increased markedly, causing
prices to rise. We seized on this opportunity to improve the
quality of our portfolio by reducing our freighter and wide-body
aircraft holdings while also planting the seeds for profitable
future asset sales."
Mr. Wainshal added, "We expect to complete $1.5 billion in acquisitions in 2016, taking
Aircastle's owned and managed fleet to nearly 200 aircraft.
This investment level exceeds last year's, though we've slowed our
pace of growth during the second half as we remain disciplined
buyers with limited investment commitments. Despite the
competitive market, we're still generating attractive new
investments by providing aircraft sellers with value-added
propositions that play to our strengths."
Mr. Wainshal concluded, "Aircastle continues to grow profitably
and responsibly as we reshape our portfolio towards modern,
narrow-body aircraft that offer solid long-term return
profiles. At the same time, we are replacing less promising
assets, even if they have higher near-term accounting yields.
We are encouraged with our success in building and enhancing the
company's sustainable earnings power, and to that end, we are
increasing our quarterly dividend to $0.26 per share."
Michael Inglese, Aircastle's CFO,
added, "We are working to drive our net cash interest margins
higher as older and more expensive debt rolls off and gets replaced
by flexible and attractively priced new financings and as we deploy
our strong cash balances. Similarly, we expect our portfolio
management efforts to enhance the strength and duration of our
revenue yields."
|
Financial
Results
|
|
|
(in thousands, except
share data)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
194,652
|
|
$
212,074
|
|
$ 568,305
|
|
$ 610,935
|
|
|
|
|
|
|
|
|
|
Lease rental and
finance and sales-type lease
revenues
|
$
187,329
|
|
$
189,906
|
|
$ 550,696
|
|
$ 555,375
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
181,145
|
|
$
216,311
|
|
$ 547,460
|
|
$ 621,133
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
27,437
|
|
$ (13,989
)
|
|
$
83,729
|
|
$
71,088
|
|
Per common share -
Diluted
|
$
0.35
|
|
$
(0.17 )
|
|
$
1.06
|
|
$
0.88
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)(1)
|
$
29,706
|
|
$
(9,679 )
|
|
$
98,002
|
|
$
88,007
|
|
Per common share -
Diluted
|
$
0.38
|
|
$
(0.12 )
|
|
$
1.24
|
|
$
1.08
|
|
|
(1) Refer to the selected
financial information accompanying this press release for a
reconciliation of GAAP to Non-GAAP
numbers.
|
Third Quarter Results
Total revenues were $194.7
million, a decrease of $17.4
million, or 8.2%, from the prior year. The decrease
was driven by $8.9 million less in
maintenance revenue and a $7.5
million drop in lease termination fees, stemming from a
decline in scheduled lease expirations this year.
Lease rental and finance and sales-type lease revenues during
the third quarter were $187.3 million
versus $189.9 million the prior year.
The 1.4% decrease reflects the net year-over-year impact from
aircraft acquisitions, dispositions and lease extensions.
Net income for the third quarter was $27.4 million, an improvement of $41.4 million compared to a net loss of
($14.0) million in the previous year,
while adjusted net income for the third quarter of 2016 improved by
$39.4 million. Lower total
revenues and gains from aircraft sales were offset by a
$67.9 million reduction in aircraft
impairment charges and $9.1 million
less in depreciation expense.
Adjusted EBITDA for the third quarter was $181.1 million, down 16.3%, or $35.2 million, versus the same quarter last
year. This result is driven primarily by declines of
$15.8 million in gains from aircraft
sales, $11.5 million in total lease
revenue and finance lease and maintenance revenue, and $7.5 million in early termination fees.
Aviation Assets
We acquired ten aircraft for $303
million during the third quarter. During the first
nine months of 2016, we purchased 32 aircraft for $961 million. The aircraft we acquired year
to date had an average age of 6.8 years and an average remaining
lease term of 6.4 years. For the full year, we expect to
complete $1.5 billion in aircraft
acquisitions, of which $1.4 billion
will be narrow-body aircraft.
During the third quarter of 2016, we sold five aircraft,
including two freighters and two wide-bodies. These sales
reduced our freighter fleet to nine aircraft, accounting for 8.6%
of the total net book value of our flight equipment held for
lease. We also sold one A321 aircraft to our joint venture
with IBJ Leasing. Total sales proceeds during the third
quarter were approximately $150
million. We expect to record increased asset sales
activity during the fourth quarter of 2016.
During the first three quarters of 2016, we sold nineteen
aircraft for proceeds of $489 million
and a net gain on sale of $14.9
million. These sales included five wide-body and two
freighter aircraft. Excluding the six aircraft sold to our
joint ventures with Ontario Teachers' Pension Plan and IBJ Leasing,
the average age of the other thirteen aircraft sold was
approximately seventeen years.
Our fleet utilization during the third quarter was 98.2%.
During the quarter, we delivered three aircraft that had been
off-lease to airline customers. Two of these were 737-800s
acquired from a Brazilian airline prior to their delivery from
Boeing and had been undergoing reconfiguration for a new lessee in
China. The other aircraft
was a mid-aged A330-200 that underwent maintenance prior to its
delivery to Aerolineas Argentinas. We expect fleet
utilization during the fourth quarter of 2016 to be in excess of
99%.
As of September 30, 2016,
Aircastle owned 175 aircraft having a net book value of
$6.3 billion. We also manage eleven
aircraft with a net book value of $629
million dollars on behalf of our joint ventures with Ontario
Teachers' Pension Plan and IBJ Leasing of Japan.
|
|
|
Owned
Aircraft as of
September 30,
2016(1)
|
|
Owned
Aircraft as of
September 30,
2015(1)
|
|
Total Flight
Equipment Held for Lease ($ mils.)
|
|
|
|
|
$
|
6,270
|
|
|
$
|
6,007
|
|
|
Unencumbered Flight
Equipment Held for Lease ($ mils.)
|
|
|
|
|
$
|
4,343
|
|
|
$
|
3,722
|
|
|
Number of
Aircraft
|
|
|
|
175
|
|
|
160
|
|
|
Number of
Unencumbered Aircraft
|
|
|
|
139
|
|
|
109
|
|
|
Weighted Average
Fleet Age (years)(2)
|
|
|
|
7.6
|
|
|
7.7
|
|
|
Weighted Average
Remaining Lease Term
(years)(2)
|
|
|
|
5.3
|
|
|
5.9
|
|
|
Weighted Average
Fleet Utilization for the period
ended(3)
|
|
|
|
98.2%
|
|
|
99.9%
|
|
|
Portfolio Yield for
the quarter ended(4)
|
|
|
|
12.4%
|
|
|
12.7%
|
|
|
Net Cash Interest
Margin(5)
|
|
|
|
8.7%
|
|
|
9.3%
|
|
|
|
(1) Calculated using net book
value of flight equipment held for lease and net investment in
finance leases at period end.
|
|
(2) Weighted average based on
net book value.
|
|
(3) Aircraft on-lease days as
a percent of total days in period weighted by net book
value.
|
|
(4) Lease rental revenue and
interest income and cash collections on finance and sales-type
leases for the period as a
percent of
the average net book value of flight equipment held for lease and
our investment in finance and sales-type
leases for
the period; quarterly information is annualized.
|
|
(5) Refer to the selected
financial information accompanying this press release for a
reconciliation of GAAP to Non-GAAP
numbers. The calculation of Net Cash Interest Margin has been
revised in this presentation to include collections from
finance and
sales-type leases minus interest on borrowings.
|
Portfolio yield for the quarter was down by 31 basis points
compared to last year, reflecting the shift to assets with less
risk and better long-term earnings profiles but with lower
near-term yields. The net cash interest margin was 59 basis
points lower compared to last year due to the drop in portfolio
yield as well as higher cash balances from borrowings completed
earlier in 2016.
Annual Fleet Review & Other Impairments
We completed our annual fleet review for narrow-body aircraft
during the third quarter and recorded impairment charges of
$2.2 million and impairment losses of
$2.6 million across several older
757s due to come off lease over the next fifteen months. We
anticipate selling all six of our 757s at lease end.
In addition, during the quarter we recorded $6.6 million of other impairment charges, offset
by $5.6 million of maintenance
revenue and $2.4 million of reversed
lease incentives on three older 747 converted freighters which we
expect to scrap as their leases expire over the next eighteen
months.
Funding
During the third quarter we finished drawing down under the
secured bank facility closed during the second quarter of
2016. These draw-downs brought the total facility amount to
$434 million. This brings total
debt funding raised for the year to $1.1
billion, of which approximately $700
million was unsecured. Funding sources include the
U.S. bond market, Japanese banks and leading international
aerospace banking institutions.
Common Dividend
On October 28, 2016, our Board of
Directors declared a fourth quarter 2016 cash dividend of
$0.26 per share on Aircastle common
shares, payable on December 15, 2016
to shareholders of record on November
29, 2016. This is our 42nd consecutive
dividend and represents an 8.3% increase over the previous
quarter's cash dividend. Since 2010, Aircastle has increased
its dividend seven times for a total increase of 260% over that
period.
Conference Call
In connection with this earnings release, management will host
an earnings conference call on Tuesday,
November 1, 2016 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) 499-4035 (from within the U.S. and
Canada) or (416) 204-9269 (from
outside of the U.S. and Canada)
ten minutes prior to the scheduled start and referencing the
passcode "1757279".
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis at www.aircastle.com.
Please allow extra time prior to the call to visit the site and
download the necessary software required to listen to the internet
broadcast. A replay of the webcast will be available for one
month following the call. In addition to this earnings
release an accompanying power point presentation has been posted to
the Investor Relations section of Aircastle's website.
For those who are not available to listen to the live call, a
replay will be available until 1:00 P.M.
Eastern time on Thursday, December 1,
2016 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
"1757279".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet
aircraft to airlines throughout the world. As of September 30, 2016, Aircastle owned and managed
on behalf of its joint ventures 186 aircraft leased to 65 customers
located in 35 countries.
Safe Harbor
All statements in this press release, other than
characterizations of historical fact, are forward-looking
statements within the meaning of the federal securities laws,
including the Private Securities Litigation Reform Act of 1995.
Examples of forward-looking statements include, but are not
necessarily limited to, statements relating to our 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,
Cash Return on Equity 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 such forward-looking statements which
are subject to certain risks and uncertainties that could cause
actual results to differ materially from those anticipated as of
the date of this press release. These risks or uncertainties
include, but are not limited to, those described from time to time
in Aircastle's filings with the SEC and previously disclosed under
"Risk Factors" in Item 1A of Aircastle's 2015 Annual Report on Form
10-K. 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 expressly disclaims any obligation to revise or
update publicly any forward-looking statement to reflect future
events or circumstances.
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Balance Sheets
|
|
(Dollars in
thousands, except share data)
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
|
656,247
|
|
|
$
|
155,904
|
|
|
Accounts
receivable
|
5,266
|
|
|
8,566
|
|
|
Restricted cash and
cash equivalents
|
54,000
|
|
|
98,137
|
|
|
Restricted liquidity
facility collateral
|
-
|
|
|
65,000
|
|
|
Flight equipment held
for lease, net of accumulated depreciation of $1,245,447 and
$1,306,024, respectively
|
6,004,489
|
|
|
5,867,062
|
|
|
Net investment in
finance and sales-type leases
|
265,854
|
|
|
201,211
|
|
|
Unconsolidated equity
method investment
|
67,160
|
|
|
50,377
|
|
|
Other
assets
|
129,840
|
|
|
123,707
|
|
|
Total
assets
|
$
|
7,182,856
|
|
|
$
|
6,569,964
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Borrowings from
secured financings, net of debt issuance costs
|
$
|
1,261,423
|
|
|
$
|
1,146,238
|
|
|
Borrowings from
unsecured financings, net of debt issuance costs
|
3,286,304
|
|
|
2,894,918
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
144,140
|
|
|
131,058
|
|
|
Lease rentals
received in advance
|
61,095
|
|
|
67,327
|
|
|
Liquidity
facility
|
-
|
|
|
65,000
|
|
|
Security
deposits
|
128,109
|
|
|
115,642
|
|
|
Maintenance
payments
|
516,689
|
|
|
370,281
|
|
|
Total
liabilities
|
5,397,760
|
|
|
4,790,464
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Preference shares,
$0.01 par value, 50,000,000 shares authorized, no shares
issued and
outstanding
|
—
|
|
|
—
|
|
|
Common shares,
$0.01 par value, 250,000,000 shares authorized,
78,634,133 shares
issued and outstanding at September 30, 2016; and 80,232,260 shares
issued and
outstanding at December 31, 2015
|
786
|
|
|
802
|
|
|
Additional paid-in
capital
|
1,519,849
|
|
|
1,550,337
|
|
|
Retained
earnings
|
268,601
|
|
|
241,574
|
|
|
Accumulated other
comprehensive loss
|
(4,140)
|
|
|
(13,213)
|
|
|
Total shareholders'
equity
|
1,785,096
|
|
|
1,779,500
|
|
|
Total liabilities and
shareholders' equity
|
$
|
7,182,856
|
|
|
$
|
6,569,964
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Statements of Income (Loss)
|
|
(Dollars in
thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Lease rental
revenue
|
$
|
181,975
|
|
|
$
|
188,038
|
|
|
$
|
537,670
|
|
|
$
|
550,023
|
|
|
Finance and
sales-type lease revenue
|
5,354
|
|
|
1,868
|
|
|
13,026
|
|
|
5,352
|
|
|
Amortization of net
lease discounts and lease incentives
|
(521)
|
|
|
(2,113)
|
|
|
(5,419)
|
|
|
(10,288)
|
|
|
Maintenance
revenue
|
6,829
|
|
|
15,726
|
|
|
20,603
|
|
|
55,148
|
|
|
Total lease
revenue
|
193,637
|
|
|
203,519
|
|
|
565,880
|
|
|
600,235
|
|
|
Other
revenue
|
1,015
|
|
|
8,555
|
|
|
2,425
|
|
|
10,700
|
|
|
Total
revenues
|
194,652
|
|
|
212,074
|
|
|
568,305
|
|
|
610,935
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Depreciation
|
76,201
|
|
|
85,324
|
|
|
227,918
|
|
|
237,538
|
|
|
Interest,
net
|
61,797
|
|
|
60,381
|
|
|
188,490
|
|
|
184,063
|
|
|
Selling, general and
administrative (including non-cash share based
payment expense of $2,059 and $1,424 for the three months ended
and $5,796 and $3,981 for the nine months ended September 30,
2016 and 2015, respectively)
|
15,985
|
|
|
14,032
|
|
|
46,883
|
|
|
42,663
|
|
|
Impairment of
Aircraft
|
10,462
|
|
|
78,403
|
|
|
27,185
|
|
|
102,358
|
|
|
Maintenance and other
costs
|
1,834
|
|
|
2,520
|
|
|
5,504
|
|
|
9,126
|
|
|
Total
expenses
|
166,279
|
|
|
240,660
|
|
|
495,980
|
|
|
575,748
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain (loss) on sale
of flight equipment
|
(73)
|
|
|
15,679
|
|
|
14,932
|
|
|
43,034
|
|
|
Other
|
(210)
|
|
|
70
|
|
|
(136)
|
|
|
341
|
|
|
Total other income
(expense)
|
(283)
|
|
|
15,749
|
|
|
14,796
|
|
|
43,375
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
28,090
|
|
|
(12,837)
|
|
|
87,121
|
|
|
78,562
|
|
|
Income tax
provision
|
2,458
|
|
|
2,709
|
|
|
8,782
|
|
|
12,037
|
|
|
Earnings of
unconsolidated equity method investment, net of tax
|
1,805
|
|
|
1,557
|
|
|
5,390
|
|
|
4,563
|
|
|
Net income
(loss)
|
$
|
27,437
|
|
|
$
|
(13,989)
|
|
|
$
|
83,729
|
|
|
$
|
71,088
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share — Basic:
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
$
|
0.35
|
|
|
$
|
(0.17)
|
|
|
$
|
1.06
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share — Diluted:
|
|
|
|
|
|
|
|
|
Net income (loss) per
share
|
$
|
0.35
|
|
|
$
|
(0.17)
|
|
|
$
|
1.06
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
$
|
0.72
|
|
|
$
|
0.66
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Consolidated
Statements of Cash Flows
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2015
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
83,729
|
|
|
$
|
71,088
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation
|
227,918
|
|
|
237,538
|
|
|
|
Amortization of
deferred financing costs
|
13,567
|
|
|
11,211
|
|
|
|
Amortization of net
lease discounts and lease incentives
|
5,419
|
|
|
10,288
|
|
|
|
Deferred income
taxes
|
3,129
|
|
|
(1,455)
|
|
|
|
Non-cash share-based
payment expense
|
5,796
|
|
|
3,981
|
|
|
|
Cash flow hedges
reclassified into earnings
|
9,074
|
|
|
19,349
|
|
|
|
Security deposits and
maintenance payments included in earnings
|
(12,844)
|
|
|
(20,645)
|
|
|
|
Gain on sale of
flight equipment
|
(14,932)
|
|
|
(43,034)
|
|
|
|
Impairment of
aircraft
|
27,185
|
|
|
102,358
|
|
|
|
Other
|
(4,712)
|
|
|
269
|
|
|
|
Changes in certain
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
1,699
|
|
|
253
|
|
|
|
Other
assets
|
3,815
|
|
|
(4,382)
|
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
16,459
|
|
|
14,085
|
|
|
|
Lease rentals
received in advance
|
2,111
|
|
|
7,566
|
|
|
|
Net cash provided by
operating activities
|
367,413
|
|
|
408,470
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Acquisition and
improvement of flight equipment and lease incentives
|
(792,270)
|
|
|
(1,034,578)
|
|
|
|
Proceeds from sale of
flight equipment
|
488,749
|
|
|
343,020
|
|
|
|
Restricted cash and
cash equivalents related to sale of flight equipment
|
17,000
|
|
|
—
|
|
|
|
Aircraft purchase
deposits and progress payments, net of returned deposits and
aircraft sale deposits
|
(14,035)
|
|
|
(4,421)
|
|
|
|
Net investment in
finance and sales-type leases
|
(78,892)
|
|
|
(24,000)
|
|
|
|
Collections on
finance and sales-type leases
|
14,413
|
|
|
6,768
|
|
|
|
Unconsolidated equity
method investment and associated costs
|
(12,686)
|
|
|
—
|
|
|
|
Other
|
(812)
|
|
|
(260)
|
|
|
|
Net cash used in
investing activities
|
(378,533)
|
|
|
(713,471)
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Repurchase of
shares
|
(36,573)
|
|
|
(1,960)
|
|
|
|
Proceeds from secured
and unsecured debt financings
|
999,350
|
|
|
800,000
|
|
|
|
Repayments of secured
and unsecured debt financings
|
(489,134)
|
|
|
(548,359)
|
|
|
|
Deferred financing
costs
|
(17,273)
|
|
|
(12,185)
|
|
|
|
Restricted liquidity
facility collateral
|
65,000
|
|
|
—
|
|
|
|
Liquidity
facility
|
(65,000)
|
|
|
—
|
|
|
|
Restricted cash and
cash equivalents related to financing activities
|
27,137
|
|
|
14,626
|
|
|
|
Security deposits and
maintenance payments received
|
123,767
|
|
|
114,644
|
|
|
|
Security deposits and
maintenance payments returned
|
(37,036)
|
|
|
(28,797)
|
|
|
|
Other
|
(2,073)
|
|
|
—
|
|
|
|
Dividends
paid
|
(56,702)
|
|
|
(53,583)
|
|
|
|
Net cash provided by
financing activities
|
511,463
|
|
|
284,386
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
500,343
|
|
|
(20,615)
|
|
|
|
Cash and cash
equivalents at beginning of period
|
155,904
|
|
|
169,656
|
|
|
|
Cash and cash
equivalents at end of period
|
$
656,247
|
|
|
$
149,041
|
|
|
|
Aircastle Limited
and Subsidiaries
|
|
Selected Financial
Guidance Elements for the Fourth Quarter of 2016
|
|
($ in millions,
except for percentages)
|
|
(Unaudited)
|
|
|
|
Guidance
Item
|
Q4:16
|
|
Lease rental
revenue
|
$185 -
$189
|
|
Finance lease
revenue
|
$4 - $5
|
|
Maintenance
revenue
|
$7 - $9
|
|
Amortization of net
lease discounts and lease incentives
|
($3) –
($4)
|
|
SG&A1
|
$15 - $16
|
|
Depreciation
|
$78 - $81
|
|
Interest,
net
|
$62 - $64
|
|
Gain on
sale
|
$5 - $15
|
|
Full year effective
tax rate
|
9% - 11%
|
|
|
1. Includes $2.1M of
non-cash share based payment expense.
|
|
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,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
194,652
|
|
$
212,074
|
|
$ 568,305
|
|
$ 610,935
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
$
168,414
|
|
$
136,538
|
|
$ 514,338
|
|
$ 515,014
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
$
181,145
|
|
$
216,311
|
|
$ 547,460
|
|
$ 621,133
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
27,437
|
|
$
(13,989)
|
|
$
83,729
|
|
$
71,088
|
|
|
|
|
|
|
|
|
|
Net income (loss)
allocable to common shares
|
$
27,200
|
|
$
(13,989)
|
|
$
83,043
|
|
$
70,559
|
|
Per common
share - Basic
|
$
0.35
|
|
$
(0.17)
|
|
$
1.06
|
|
$
0.88
|
|
Per common
share - Diluted
|
$
0.35
|
|
$
(0.17)
|
|
$
1.06
|
|
$
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)(1)
|
$
29,706
|
|
$
(9,679)
|
|
$
98,002
|
|
$
88,007
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss) allocable to common shares
|
$
29,449
|
|
$
(9,679)
|
|
$
97,199
|
|
$
87,352
|
|
Per common share -
Basic
|
$
0.38
|
|
$
(0.12)
|
|
$
1.24
|
|
$
1.08
|
|
Per common share -
Diluted
|
$
0.38
|
|
$
(0.12)
|
|
$
1.24
|
|
$
1.08
|
|
|
|
|
|
|
|
|
|
Basic common shares
outstanding
|
77,990
|
|
80,566
|
|
78,230
|
|
80,566
|
|
Diluted common shares
outstanding(2)
|
78,022
|
|
80,566
|
|
78,266
|
|
80,566
|
|
|
(1) Refer to the selected
information accompanying this press release for a reconciliation of
GAAP to Non-GAAP information
|
|
(2) For the three and nine
months ended September 30, 2016, includes 32,235 and 35,804
dilutive shares, respectively.
|
|
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,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Dollars in
thousands)
|
|
Net income
(loss)
|
$
|
27,437
|
|
|
$
|
(13,989)
|
|
|
$
|
83,729
|
|
|
$
|
71,088
|
|
|
Depreciation
|
76,201
|
|
|
85,324
|
|
|
227,918
|
|
|
237,538
|
|
|
Amortization of net
lease discounts and lease incentives
|
521
|
|
|
2,113
|
|
|
5,419
|
|
|
10,288
|
|
|
Interest,
net
|
61,797
|
|
|
60,381
|
|
|
188,490
|
|
|
184,063
|
|
|
Income tax
provision
|
2,458
|
|
|
2,709
|
|
|
8,782
|
|
|
12,037
|
|
|
EBITDA
|
168,414
|
|
|
136,538
|
|
|
514,338
|
|
|
515,014
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Impairment of
aircraft
|
10,462
|
|
|
78,403
|
|
|
27,185
|
|
|
102,358
|
|
|
Non-cash
share-based payment expense
|
2,059
|
|
|
1,424
|
|
|
5,796
|
|
|
3,981
|
|
|
(Gain) loss on
mark-to-market of interest rate derivative contracts
|
210
|
|
|
(54)
|
|
|
141
|
|
|
(220)
|
|
|
Adjusted EBITDA
|
$
|
181,145
|
|
|
$
|
216,311
|
|
|
$
|
547,460
|
|
|
$
|
621,133
|
|
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-U.S. 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,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Dollars in
thousands)
|
|
Net income
(loss)
|
$
|
27,437
|
|
|
$
|
(13,989)
|
|
|
$
|
83,729
|
|
|
$
|
71,088
|
|
|
Loan termination
fee(1)
|
—
|
|
|
—
|
|
|
1,509
|
|
|
—
|
|
|
Ineffective portion
and termination of hedges(1)
|
—
|
|
|
215
|
|
|
—
|
|
|
509
|
|
|
(Gain) loss on mark to
market of interest rate derivative
contracts(2)
|
210
|
|
|
(54)
|
|
|
141
|
|
|
(220)
|
|
|
Write-off of deferred
financing fees(1)
|
—
|
|
|
—
|
|
|
1,972
|
|
|
—
|
|
|
Non-cash share based payment expense(3)
|
2,059
|
|
|
1,424
|
|
|
5,796
|
|
|
3,981
|
|
|
Term
Financing No. 1 hedge loss amortization
charges(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
4,401
|
|
|
Securitization No. 1 hedge loss amortization charges
(1)
|
—
|
|
|
2,725
|
|
|
4,855
|
|
|
8,248
|
|
|
Adjusted net income
(loss)
|
$
|
29,706
|
|
|
$
|
(9,679)
|
|
|
$
|
98,002
|
|
|
$
|
88,007
|
|
|
|
(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 U.S. GAAP and the below reconciliation,
provides useful information about operating and period-over-period
performance and 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, changes related to refinancing activity
and non-cash share-based payment expense.
|
Aircastle Limited
and Subsidiaries
|
|
Reconciliation of
GAAP to Non-GAAP Measures
|
|
Cash Return on
Equity Calculation
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
CFFO
|
Finance Lease
Collections
|
Gain (Loss) on
Sale of Eqt.
|
Deprec.
|
Distributions in
excess (less
than) Equity
Earnings
|
Cash
Earnings
|
Average
Shareholders'
Equity
|
12 Month Cash
ROE
|
|
2011
|
$359,377
|
|
$39,092
|
$242,103
|
|
$156,366
|
$1,370,513
|
11.4%
|
|
2012
|
$427,277
|
$3,852
|
$5,747
|
$269,920
|
|
$166,956
|
$1,425,658
|
11.7%
|
|
2013
|
$424,037
|
$9,508
|
$37,220
|
$284,924
|
|
$185,841
|
$1,513,156
|
12.3%
|
|
2014
|
$458,786
|
$10,312
|
$23,146
|
$299,365
|
$667
|
$193,546
|
$1,661,228
|
11.7%
|
|
2015
|
$526,285
|
$9,559
|
$58,017
|
$318,783
|
($52)
|
$275,026
|
$1,759,871
|
15.6%
|
|
LTM
|
$485,228
|
$17,204
|
$29,915
|
$309,163
|
($3,840)
|
$219,344
|
$1,774,315
|
12.4%
|
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 - Revised
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
Average
NBV
|
Quarterly
Rental
Revenue
|
Cash
Interest(1)
|
Annualized Net
Cash Interest
Margin (2)
|
|
Q1:11
|
$
4,041,967
|
$
141,116
|
$
41,278
|
9.9%
|
|
Q2:11
|
$
4,143,446
|
$
143,356
|
$
40,021
|
10.0%
|
|
Q3:11
|
$
4,222,512
|
$
145,890
|
$
42,066
|
9.8%
|
|
Q4:11
|
$
4,374,921
|
$
149,848
|
$
43,041
|
9.8%
|
|
Q1:12
|
$
4,388,008
|
$
152,242
|
$
44,969
|
9.8%
|
|
Q2:12
|
$
4,542,477
|
$
156,057
|
$
48,798
|
9.4%
|
|
Q3:12
|
$
4,697,802
|
$
163,630
|
$
41,373
|
10.4%
|
|
Q4:12
|
$
4,726,457
|
$
163,820
|
$
43,461
|
10.2%
|
|
Q1:13
|
$
4,740,161
|
$
162,319
|
$
48,591
|
9.6%
|
|
Q2:13
|
$
4,840,396
|
$
164,239
|
$
44,915
|
9.9%
|
|
Q3:13
|
$
4,863,444
|
$
167,876
|
$
47,682
|
9.9%
|
|
Q4:13
|
$
5,118,601
|
$
176,168
|
$
49,080
|
9.9%
|
|
Q1:14
|
$
5,312,651
|
$
181,095
|
$
51,685
|
9.7%
|
|
Q2:14
|
$
5,721,521
|
$
190,574
|
$
48,172
|
10.0%
|
|
Q3:14
|
$
5,483,958
|
$
182,227
|
$
44,820
|
10.0%
|
|
Q4:14
|
$
5,468,637
|
$
181,977
|
$
44,459
|
10.1%
|
|
Q1:15
|
$
5,743,035
|
$
181,027
|
$
50,235
|
9.1%
|
|
Q2:15
|
$
5,967,898
|
$
189,238
|
$
51,413
|
9.2%
|
|
Q3:15
|
$
6,048,330
|
$
191,878
|
$
51,428
|
9.3%
|
|
Q4:15
|
$
5,962,874
|
$
188,491
|
$
51,250
|
9.2%
|
|
Q1:16
|
$
5,988,076
|
$
186,730
|
$
51,815
|
9.0%
|
|
Q2:16
|
$
5,920,030
|
$
184,469
|
$
55,779
|
8.7%
|
|
Q3:16
|
$
6,265,175
|
$
193,909
|
$
57,589
|
8.7%
|
|
|
(1) Excludes loan termination
payments of $3.2 million and $3.0 million in the second quarter of
2011 and 2013
respectively, and $1.5 million in the first quarter of
2016.
|
|
(2) Management's Use of Net
Cash Interest Margin: Beginning with this earnings release
for the three months
ended
September 30, 2016, based on the growing level of finance and
sales-type lease revenue,
management
revised the calculation of net cash interest margin to include our
net investment in finance and
sales-type
leases in the average net book value and to include the interest
income and cash collections on
our net
investment in finance and sales-type lease in lease rentals.
The calculation of net cash interest
margin for
all prior periods presented is revised to be comparable with the
current period presentation.
|
We define net cash interest margin as lease rentals from
operating leases, interest income and cash collections from finance
and sales-type leases minus interest on borrowings, net settlements
on interest rate derivatives and other liabilities adjusted for
loan termination payments divided by the average net book of flight
equipment (which includes net investment on finance and sales-type
leases) for the period calculated on a quarterly and annualized
basis.
Management believes that net cash interest margin, when viewed
in conjunction with the Company's results under U.S. GAAP and the
above reconciliation, provides useful information about the
effective deployment of our capital in the context of the yield on
our aircraft assets, the utilization of those assets by our
lessees, and our ability to borrow efficiently.
|
Aircastle Limited
and Subsidiaries
|
|
Reconciliation of
GAAP to Non-GAAP Measures
|
|
Net Cash Interest
Margin Calculation - Original
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
|
Average NBV
of Flight
Equipment
|
|
Quarterly
Lease Rental
Revenue
|
|
Cash
Interest(1)
|
|
Annualized
Net Cash
Interest
Margin
|
|
Q1:11
|
|
$
4,041,967
|
|
$
141,116
|
|
$
41,278
|
|
9.9%
|
|
Q2:11
|
|
$
4,143,446
|
|
$
143,356
|
|
$
43,217
|
|
9.7%
|
|
Q3:11
|
|
$
4,222,512
|
|
$
145,890
|
|
$
42,066
|
|
9.8%
|
|
Q4:11
|
|
$
4,374,921
|
|
$
149,848
|
|
$
43,041
|
|
9.8%
|
|
Q1:12
|
|
$
4,388,008
|
|
$
152,242
|
|
$
44,969
|
|
9.8%
|
|
Q2:12
|
|
$
4,516,973
|
|
$
153,624
|
|
$
48,798
|
|
9.3%
|
|
Q3:12
|
|
$
4,602,185
|
|
$
159,546
|
|
$
41,373
|
|
10.3%
|
|
Q4:12
|
|
$
4,605,783
|
|
$
158,090
|
|
$
43,461
|
|
10.0%
|
|
Q1:13
|
|
$
4,619,204
|
|
$
156,590
|
|
$
48,591
|
|
9.4%
|
|
Q2:13
|
|
$
4,711,790
|
|
$
157,918
|
|
$
47,869
|
|
9.3%
|
|
Q3:13
|
|
$
4,717,877
|
|
$
161,148
|
|
$
47,682
|
|
9.6%
|
|
Q4:13
|
|
$
4,972,040
|
|
$
169,274
|
|
$
49,080
|
|
9.7%
|
|
Q1:14
|
|
$
5,168,851
|
|
$
174,335
|
|
$
51,685
|
|
9.5%
|
|
Q2:14
|
|
$
5,582,359
|
|
$
183,231
|
|
$
48,172
|
|
9.7%
|
|
Q3:14
|
|
$
5,412,299
|
|
$
178,886
|
|
$
44,820
|
|
9.9%
|
|
Q4:14
|
|
$
5,373,733
|
|
$
178,202
|
|
$
44,459
|
|
10.0%
|
|
Q1:15
|
|
$
5,637,513
|
|
$
177,146
|
|
$
50,235
|
|
9.0%
|
|
Q2:15
|
|
$
5,850,516
|
|
$
184,839
|
|
$
51,413
|
|
9.1%
|
|
Q3:15
|
|
$
5,926,459
|
|
$
188,037
|
|
$
51,428
|
|
9.2%
|
|
Q4:15
|
|
$
5,835,547
|
|
$
183,394
|
|
$
51,250
|
|
9.1%
|
|
Q1:16
|
|
$
5,781,858
|
|
$
179,570
|
|
$
51,815
|
|
8.8%
|
|
Q2:16
|
|
$
5,677,121
|
|
$
176,125
|
|
$
55,779
|
|
8.5%
|
|
Q3:16
|
|
$
5,979,489
|
|
$
181,975
|
|
$
57,589
|
|
8.3%
|
|
|
(1)
Excludes loan termination payments of $3.2 million and
$3.0 million in the second quarter of 2011 and 2013
respectively, and $1.5 million in the first quarter of
2016.
|
|
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,
2016
|
|
Nine Months
Ended
September 30,
2016
|
|
|
Weighted-average
shares(1)-Basic:
|
Shares
|
|
Percent(2)
|
|
Shares
|
|
Percent(2)
|
|
|
Common shares
outstanding
|
77,990
|
|
|
99.14%
|
|
|
78,230
|
|
|
99.18%
|
|
|
Unvested restricted
common shares
|
680
|
|
|
0.86%
|
|
|
646
|
|
|
0.82%
|
|
|
Total
weighted-average shares outstanding
|
78,670
|
|
|
100.00%
|
|
|
78,876
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$27,437
|
|
|
100.00%
|
|
|
$83,729
|
|
|
100.00%
|
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares
|
(237)
|
|
|
(0.86%)
|
|
|
(686)
|
|
|
(0.82%)
|
|
|
Earnings available to
common shares
|
$27,200
|
|
|
99.14%
|
|
|
$83,043
|
|
|
99.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$29,706
|
|
|
100.00%
|
|
|
$98,002
|
|
|
100.00%
|
|
|
Amounts allocated to
unvested restricted shares
|
(257)
|
|
|
(0.86%)
|
|
|
(803)
|
|
|
(0.82%)
|
|
|
Amounts allocated to
common shares
|
$29,449
|
|
|
99.14%
|
|
|
$97,199
|
|
|
99.18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three and nine
months ended September 30, 2016, dilutive shares represented
contingently issuable shares related to the Company's
PSUs.
|
|
(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,
2015
|
|
Nine Months
Ended
September 30,
2015
|
|
|
Weighted-average
shares(1)-Basic:
|
Shares
|
|
Percent(2)
|
|
Shares
|
|
Percent(2)
|
|
|
Common shares
outstanding
|
80,566
|
|
|
99.21%
|
|
|
80,566
|
|
|
99.26%
|
|
|
Unvested restricted
common shares
|
645
|
|
|
0.79%
|
|
|
604
|
|
|
0.74%
|
|
|
Total
weighted-average shares outstanding
|
81,212
|
|
|
100.00%
|
|
|
81,170
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
allocation
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
($13,989)
|
|
|
100.00%
|
|
|
$71,088
|
|
|
100.00%
|
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares
|
--
|
|
|
--
|
|
|
(529)
|
|
|
(0.74%)
|
|
|
Earnings (loss)
available to common shares
|
($13,989)
|
|
|
100.00%
|
|
|
$70,559
|
|
|
99.26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) allocation
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
($9,679)
|
|
|
100.00%
|
|
|
$88,007
|
|
|
100.00%
|
|
|
Amounts allocated to
unvested restricted shares
|
--
|
|
|
--
|
|
|
(655)
|
|
|
(0.74%)
|
|
|
Amounts allocated to
common shares
|
($9,679)
|
|
|
100.00%
|
|
|
$87,352
|
|
|
99.26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three and nine
months ended September 30, 2015 the company had no dilutive
shares.
|
|
(2) Percentages rounded to
two decimal places.
|
|
Contact:
|
|
|
Aircastle Advisor
LLC
|
The IGB
Group
|
|
Frank Constantinople,
SVP Investor Relations
|
Leon
Berman
|
|
Tel:
+1-203-504-1063
|
Tel:
+1-212-477-8483
|
|
fconstantinople@aircastle.com
|
lberman@igbir.com
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aircastle-announces-third-quarter-2016-results-300354638.html
SOURCE Aircastle Limited