STAMFORD, Conn., Aug. 4, 2016 /PRNewswire/ --
Key Financial Metrics
- Total revenues were $190.0
million for the second quarter of 2016
- Total lease rental and finance and sales-type lease revenues
were $180.3 million
- Net income was $20.0 million, or
$0.25 per diluted common share
- Adjusted net income was $24.2
million, or $0.31 per diluted
common share
- Adjusted EBITDA was $182.4
million for the second quarter
- Cash ROE was 14.0%; net cash interest margin was 8.5%
Highlights
- Acquired nineteen aircraft for $560
million during the quarter
- Obtained $1.1 billion in new
financing year-to-date, including a $400
million term loan facility closed during the second
quarter
- Signed leases for three new 737-800s and three Embraer E2
aircraft from our order stream
- Continued de-risking our business by selling two older
freighters
- Completed our annual recoverability analysis for freighter and
wide-body aircraft, and reduced the carrying value of an older
wide-body
- Declared our 41st consecutive quarterly
dividend
Aircastle Limited (the "Company" or "Aircastle") (NYSE: AYR)
reported second quarter 2016 net income of $20.0 million, or $0.25 per diluted common share and adjusted net
income of $24.2 million, or
$0.31 per diluted common share.
The second quarter results included total lease rental and finance
and sales-type lease revenues of $180.3
million, a decrease of 3%, as compared to $186.7 million in the second quarter of
2015.
Commenting on the results, Ron
Wainshal, Aircastle's CEO, stated "We mark the ten year
anniversary of Aircastle's initial public offering with yet another
successful quarter, noting that we've built an aircraft portfolio
that is worth nearly four and half times more today and has
delivered excellent performance along the way. We've also
created a truly unique and relevant company that is both the
world's largest aircraft value investor and one that is positioned
to prosper and grow both in stable and turbulent times."
Mr. Wainshal continued, "Thanks to our talented team, supportive
partners and our conservative and flexible capital structure, we
are seizing on prime investment opportunities arising from the
heightened volatility we see in the world today. Our
reliability as a trading partner allowed us to purchase
$660 million in aircraft during the
first half of the year and our strong investment pipeline gives us
confidence that we'll exceed last year's $1.4 billion in acquisitions. At the same
time our strength and agility as a borrower enabled us to raise
$1.1 billion of attractively priced
debt capital in moments when the market was favorable."
Concluding, Mr. Wainshal added, "By limiting our long-term
capital commitments, maintaining our financial flexibility and
continuing to de-risk our portfolio, we are in a very strong
position today. Aircastle is continuing to grow profitably,
consistently originating investments with attractive returns
despite the extremely low yield environment and competition for new
business. We are also building on our track record of sharing
profits with our shareholders by declaring our 41st
consecutive quarterly dividend."
Financial
Results
|
|
|
|
|
|
|
|
(in thousands, except
share data)
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$ 189,988
|
|
$ 204,565
|
|
$ 373,653
|
|
$ 398,861
|
|
|
|
|
|
|
|
|
Lease Rental and
Finance and Sales-Type Lease Revenues
|
$ 180,299
|
|
$ 186,716
|
|
$ 363,367
|
|
$ 365,469
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 182,436
|
|
$ 214,608
|
|
$ 366,315
|
|
$ 404,822
|
|
|
|
|
|
|
|
|
Net income
|
$
20,030
|
|
$
41,808
|
|
$
56,292
|
|
$
85,077
|
Per common share -
Diluted
|
$
0.25
|
|
$
0.51
|
|
$
0.71
|
|
$
1.05
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
24,205
|
|
$
47,229
|
|
$
68,296
|
|
$
97,686
|
Per common share -
Diluted
|
$
0.31
|
|
$
0.58
|
|
$
0.86
|
|
$
1.20
|
Second Quarter Results
Total revenues were $190.0
million, a decrease of $14.6
million, or 7% from the previous year. A decrease of
$8.8 million in maintenance revenues
and a $6.4 million drop in lease
rental and finance and sales-type lease revenue accounted for most
of the change. During the second quarter of 2015, we recorded
$21.3 million of maintenance revenue,
primarily due to the expiration of four leases with significant
return compensation payments. The decline in lease rental and
finance lease revenue was due to the sale of 43 aircraft since the
second quarter of 2015.
During the second quarter, we agreed to sell two 25-year old
747-400 freighters scheduled to come off lease within the next
twelve months and recorded an impairment charge of $5.1 million. Both aircraft were sold in
July.
We completed our annual fleet review for wide-body and freighter
aircraft during the second quarter this year given weaker market
dynamics for these aircraft. In connection with this review,
we recorded impairment charges of $11.7
million and maintenance revenue of $4.0 million related to one sixteen-year old
A330-200 approaching lease expiry. We will perform our annual
fleet review for narrow-body aircraft in the third quarter.
Adjusted EBITDA for the second quarter was $182.4 million, down $32.2
million, or 15% from the second quarter of 2015, mostly due
to lower revenues of $14.6 million
and lower gains from the sale of flight equipment of $18.9 million.
Net income in the second quarter was $20.0 million, down 52%, or $21.8 million. The decrease was primarily
due to lower revenues of $14.6
million and lower gain on sale of $18.9 million, partially offset by lower aircraft
impairment charges of $7.2 million
and lower depreciation and taxes of $4.4
million.
Adjusted net income for the quarter was $24.2 million, down $23.0
million compared to the prior year period. The
decrease was primarily due to lower revenues of $14.6 million, and lower gain on sale of
$18.9 million, partially offset by
lower aircraft impairment charges of $7.2
million.
Aviation Assets
During the second quarter of 2016, we acquired nineteen aircraft
for approximately $560 million.
In the first half of 2016, we acquired a total of 22 aircraft for
$660 million. These aircraft
have a weighted average remaining lease term of 5.7 years.
Narrow-body aircraft comprise all but three of this total, with the
remainder being wide-body aircraft assumed to be on last
leases.
During the second quarter we executed leases with two customers
in China for three Boeing 737-800
aircraft acquired new upon delivery from the manufacturer.
These aircraft had been part of a Brazilian airline's order stream
and were purchased on spec. We expect to deliver all three of
these aircraft on lease before the end of the third quarter.
We also signed leases with Azul, a Brazilian airline, for three
Embraer E2 E195 aircraft from our order stream.
During the first half of 2016, we sold fourteen aircraft and
other flight equipment for proceeds of approximately $340 million and recorded a gain on sale of
$15.0 million. The aircraft
sold consisted of two A330s, one 777-200 and six A320s sold to
third parties. In addition five newer A320s were sold to our
joint ventures with Ontario Teachers' Pension Plan and IBJ Leasing.
The weighted average age of the aircraft sold, excluding sales to
our joint ventures, was approximately eleven years.
As of June 30, 2016, Aircastle
owned and managed 179 aircraft with a net book value of
$6.8 billion. Of this total,
169 aircraft having a net book value of $6.2
billion are owned, while we manage an additional ten
aircraft with a net book value of approximately $612 million dollars on behalf of our joint
ventures with Ontario Teachers' and IBJ Leasing.
Owned
Aircraft
|
|
|
As
of
June 30,
2016(1)
|
|
As
of
June 30,
2015(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Flight
Equipment Held for Lease ($ mils.)
|
|
|
|
|
$
|
6,168
|
|
|
$
|
6,076
|
|
Unencumbered Flight
Equipment Held for Lease ($ mils.)
|
|
|
|
|
$
|
4,499
|
|
|
$
|
3,705
|
|
Number of
Aircraft
|
|
|
|
169
|
|
|
161
|
|
Number of
Unencumbered Aircraft(2)
|
|
|
|
142
|
|
|
110
|
|
Weighted Average
Fleet Age (years)(3)
|
|
|
|
7.7
|
|
|
8.0
|
|
Weighted Average
Remaining Lease Term
(years)(4)
|
|
|
|
5.5
|
|
|
5.8
|
|
Weighted Average
Fleet Utilization for the period
ended(5)
|
|
|
|
99.0%
|
|
|
99.1%
|
|
Portfolio Yield for
the year ended(6)
|
|
|
|
12.4%
|
|
|
12.6%
|
|
Net Cash Interest
Margin(7)
|
|
|
|
8.5%
|
|
|
9.1%
|
|
(1)
|
Calculated using net
book value of flight equipment held for lease and net investment in
finance and sales-type leases at period end.
|
(2)
|
The second quarter of
2016 includes ten aircraft with a net book value of $318.6 million
that will secure our ACS 2016 Bank Financing.
|
(3)
|
Weighted average age
by net book value.
|
(4)
|
Weighted average
remaining lease term by net book value.
|
(5)
|
Aircraft on-lease
days as a percent of total days in period weighted by net book
value.
|
(6)
|
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.
|
(7)
|
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.
|
Financing Activity
Year-to-date, we've secured $1.1
billion of new financing. During the second quarter of
2016, we closed a $400 million term
financing secured by seventeen aircraft, marking our return to the
secured bank financing market. This financing can be enlarged
by approximately $68 million by
including two additional aircraft as collateral. We also
prepaid our Securitization No. 2 in May which freed up
approximately $500 million in
collateral, further enhancing the Company's financial position.
Common Dividend and Share Repurchase Activity
On August 2, 2016, Aircastle's
Board of Directors declared a third quarter 2016 cash dividend on
its common shares of $0.24 per share,
payable on September 15, 2016 to
shareholders of record on August 26,
2016. This is our 41st consecutive dividend.
In addition, since the beginning of this year we repurchased 1.8
million shares at an average cost of $18.84, including 176,574 shares purchased during
June and July for an average cost of $18.92 per share.
Conference Call
In connection with this earnings release, management will host
an earnings conference call on Thursday,
August 4, 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) 430-8709 (from within the U.S. and
Canada) or (719) 325-2323 (from
outside of the U.S. and Canada)
ten minutes prior to the scheduled start and referencing the
passcode "8881544".
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, September
3, 2016 by dialing (866) 375-1919 (from within the U.S. and
Canada) or (719) 457-0820
(from outside of the U.S. and Canada); please reference passcode
"8881544".
About Aircastle Limited
Aircastle Limited acquires, leases and sells commercial jet
aircraft to airlines throughout the world. As of June 30, 2016, Aircastle owned and managed on
behalf of its joint ventures 179 aircraft leased to 63 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 and Adjusted Net Income
and the global aviation industry and aircraft leasing sector. Words
such as "anticipates," "expects," "intends," "plans," "projects,"
"believes," "may," "will," "would," "could," "should," "seeks,"
"estimates" and variations on these words and similar expressions
are intended to identify such forward-looking statements. These
statements are based on our historical performance and that of our
subsidiaries and on our current plans, estimates and expectations
and are subject to a number of factors that could lead to actual
results materially different from those described in the
forward-looking statements; Aircastle can give no assurance that
its expectations will be attained. Accordingly, you should not
place undue reliance on any such forward-looking statements which
are subject to certain risks and uncertainties that could cause
actual results to differ materially from those anticipated as of
the date of this 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.
Note: Non-GAAP items reconciled in the Appendix.
Aircastle Limited
and Subsidiaries
|
Consolidated
Balance Sheets
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
493,233
|
|
|
$
|
155,904
|
|
Accounts
receivable
|
4,500
|
|
|
8,566
|
|
Restricted cash and
cash equivalents
|
51,418
|
|
|
98,137
|
|
Restricted liquidity
facility collateral
|
-
|
|
|
65,000
|
|
Flight equipment held
for lease, net of accumulated depreciation of $1,207,844 and
$1,306,024, respectively
|
5,875,935
|
|
|
5,867,062
|
|
Net investment in
finance and sales-type leases
|
291,903
|
|
|
201,211
|
|
Unconsolidated equity
method investment
|
64,357
|
|
|
50,377
|
|
Other
assets
|
164,529
|
|
|
123,707
|
|
Total
assets
|
$
|
6,945,875
|
|
|
$
|
6,569,964
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
LIABILITIES
|
|
|
|
Borrowings from
secured financings, net of debt issuance costs
|
$
|
1,078,823
|
|
|
$
|
1,146,238
|
|
Borrowings from
unsecured financings, net of debt issuance costs
|
3,283,971
|
|
|
2,894,918
|
|
Accounts payable,
accrued expenses and other liabilities
|
135,363
|
|
|
131,058
|
|
Lease rentals
received in advance
|
57,178
|
|
|
67,327
|
|
Liquidity
facility
|
-
|
|
|
65,000
|
|
Security
deposits
|
123,533
|
|
|
115,642
|
|
Maintenance
payments
|
490,521
|
|
|
370,281
|
|
Total
liabilities
|
5,169,389
|
|
|
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,
78,777,771 shares issued and outstanding at June 30, 2016; and
80,232,260 shares issued and outstanding at December 31,
2015
|
788
|
|
|
802
|
|
Additional paid-in
capital
|
1,520,507
|
|
|
1,550,337
|
|
Retained
earnings
|
260,036
|
|
|
241,574
|
|
Accumulated other
comprehensive loss
|
(4,845)
|
|
|
(13,213)
|
|
Total shareholders'
equity
|
1,776,486
|
|
|
1,779,500
|
|
Total liabilities and
shareholders' equity
|
$
|
6,945,875
|
|
|
$
|
6,569,964
|
|
Aircastle Limited
and Subsidiaries
|
Consolidated
Statements of Income
|
(Dollars in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
Lease rental
revenue
|
$
|
176,125
|
|
|
$
|
184,839
|
|
|
$
|
355,695
|
|
|
$
|
361,985
|
|
Finance and
sales-type lease revenue
|
4,174
|
|
|
1,877
|
|
|
7,672
|
|
|
3,484
|
|
Amortization of lease
premiums, discounts and lease incentives
|
(3,828)
|
|
|
(4,351)
|
|
|
(4,898)
|
|
|
(8,175)
|
|
Maintenance
revenue
|
12,514
|
|
|
21,349
|
|
|
13,774
|
|
|
39,422
|
|
Total lease
revenue
|
188,985
|
|
|
203,714
|
|
|
372,243
|
|
|
396,716
|
|
Other
revenue
|
1,003
|
|
|
851
|
|
|
1,410
|
|
|
2,145
|
|
Total
revenues
|
189,988
|
|
|
204,565
|
|
|
373,653
|
|
|
398,861
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Depreciation
|
75,070
|
|
|
77,368
|
|
|
151,717
|
|
|
152,214
|
|
Interest,
net
|
62,452
|
|
|
61,551
|
|
|
126,693
|
|
|
123,682
|
|
Selling, general and administrative (including non-cash share based
payment
expense of $2,094 and $1,387 for the three months ended and $3,737
and
$2,557 for the six months ended June 30, 2016 and 2015,
respectively)
|
15,406
|
|
|
14,699
|
|
|
30,898
|
|
|
28,631
|
|
Impairment of
aircraft
|
16,723
|
|
|
23,955
|
|
|
16,723
|
|
|
23,955
|
|
Maintenance and other
costs
|
2,267
|
|
|
3,663
|
|
|
3,670
|
|
|
6,606
|
|
Total
expenses
|
171,918
|
|
|
181,236
|
|
|
329,701
|
|
|
335,088
|
|
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
|
|
Gain on sale of
flight equipment
|
2,172
|
|
|
21,102
|
|
|
15,005
|
|
|
27,355
|
|
Other
|
147
|
|
|
277
|
|
|
74
|
|
|
271
|
|
Total other
income
|
2,319
|
|
|
21,379
|
|
|
15,079
|
|
|
27,626
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes and earnings from
unconsolidated equity method investment
|
20,389
|
|
|
44,708
|
|
|
59,031
|
|
|
91,399
|
|
Income tax
provision
|
2,385
|
|
|
4,465
|
|
|
6,324
|
|
|
9,328
|
|
Earnings of
unconsolidated equity method investment, net of tax
|
2,026
|
|
|
1,565
|
|
|
3,585
|
|
|
3,006
|
|
Net income
|
$
|
20,030
|
|
|
$
|
41,808
|
|
|
$
|
56,292
|
|
|
$
|
85,077
|
|
|
|
|
|
|
|
|
|
Earnings per common
share — Basic:
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.25
|
|
|
$
|
0.51
|
|
|
$
|
0.71
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
Earnings per common
share — Diluted:
|
|
|
|
|
|
|
|
Net income per
share
|
$
|
0.25
|
|
|
$
|
0.51
|
|
|
$
|
0.71
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.24
|
|
|
$
|
0.22
|
|
|
$
|
0.48
|
|
|
$
|
0.44
|
|
Aircastle Limited
and Subsidiaries
|
Consolidated
Statements of Cash Flows
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
|
Six Months Ended
June 30,
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
56,292
|
|
|
$
|
85,077
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
151,717
|
|
|
152,214
|
|
Amortization of
deferred financing costs
|
9,470
|
|
|
7,465
|
|
Amortization of net
lease discounts and lease incentives
|
4,898
|
|
|
8,175
|
|
Deferred income
taxes
|
2,243
|
|
|
(1,363)
|
|
Non-cash share based
payment expense
|
3,737
|
|
|
2,557
|
|
Cash flow hedges
reclassified into earnings
|
8,369
|
|
|
14,343
|
|
Security deposits and
maintenance payments included in earnings
|
(5,651)
|
|
|
(22,382)
|
|
Gain on sale of
flight equipment
|
(15,005)
|
|
|
(27,355)
|
|
Impairment of
aircraft
|
16,723
|
|
|
23,955
|
|
Other
|
(2,843)
|
|
|
108
|
|
Changes in certain
assets and liabilities:
|
|
|
|
Accounts
receivable
|
3,262
|
|
|
(1,697)
|
|
Other
assets
|
(85)
|
|
|
(2,155)
|
|
Accounts payable,
accrued expenses and other liabilities
|
4,284
|
|
|
7,018
|
|
Lease rentals
received in advance
|
(2,714)
|
|
|
3,646
|
|
Net cash provided by
operating activities
|
234,697
|
|
|
249,606
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisition and
improvement of flight equipment and lease incentives
|
(478,026)
|
|
|
(797,136)
|
|
Proceeds from sale of
flight equipment
|
339,507
|
|
|
231,842
|
|
Restricted cash and
cash equivalents related to sale of flight equipment
|
17,000
|
|
|
(76,433)
|
|
Aircraft purchase
deposits and progress payments
|
(9,801)
|
|
|
(3,461)
|
|
Net investment in
finance leases
|
(78,365)
|
|
|
(24,000)
|
|
Collections on
finance leases
|
7,833
|
|
|
4,795
|
|
Unconsolidated equity
method investment and associated costs
|
(11,688)
|
|
|
—
|
|
Other
|
(509)
|
|
|
(256)
|
|
Net cash used in
investing activities
|
(214,049)
|
|
|
(664,649)
|
|
Cash flows from
financing activities:
|
|
|
|
Issuance of shares
net of repurchases
|
(33,854)
|
|
|
(1,960)
|
|
Proceeds from notes
and term debt financings
|
787,310
|
|
|
800,000
|
|
Securitization and
term debt financing repayments
|
(459,021)
|
|
|
(319,994)
|
|
Deferred financing
costs
|
(16,121)
|
|
|
(11,658)
|
|
Restricted liquidity
facility collateral
|
65,000
|
|
|
—
|
|
Liquidity
facility
|
(65,000)
|
|
|
—
|
|
Restricted cash and
cash equivalents related to financing activities
|
29,719
|
|
|
13,463
|
|
Security deposits and
maintenance payments received
|
72,572
|
|
|
71,536
|
|
Security deposits and
maintenance payments returned
|
(26,094)
|
|
|
(27,336)
|
|
Dividends
paid
|
(37,830)
|
|
|
(35,723)
|
|
Net cash provided by
financing activities
|
316,681
|
|
|
488,328
|
|
Net increase in
cash and cash equivalents
|
337,329
|
|
|
73,285
|
|
Cash and cash
equivalents at beginning of period
|
155,904
|
|
|
169,656
|
|
Cash and cash
equivalents at end of period
|
$
|
493,233
|
|
|
$
|
242,941
|
|
Aircastle Limited
and Subsidiaries
|
Selected Financial
Guidance Elements for the Third Quarter of 2016
|
($ in millions,
except for percentages)
|
(Unaudited)
|
|
|
Guidance
Item
|
Q3:16
|
Lease rental
revenue
|
$180 -
$184
|
Finance lease
revenue
|
$5 - $6
|
Maintenance
revenue
|
$0 - $2
|
Amortization of net
lease discounts and lease incentives
|
($3) –
($4)
|
SG&A1
|
$15 - $16
|
Depreciation
|
$74 - $76
|
Interest,
net
|
$62 - $64
|
Gain on
sale
|
$2 - $8
|
Full year effective
tax rate
|
10% - 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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Revenues
|
$ 189,988
|
|
$ 204,565
|
|
$ 373,653
|
|
$ 398,861
|
|
|
|
|
|
|
|
|
EBITDA
|
$ 163,765
|
|
$ 189,543
|
|
$ 345,924
|
|
$ 378,476
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 182,436
|
|
$ 214,608
|
|
$ 366,315
|
|
$ 404,822
|
|
|
|
|
|
|
|
|
Net Income
|
$
20,030
|
|
$
41,808
|
|
$
56,292
|
|
$
85,077
|
|
|
|
|
|
|
|
|
Net income allocable
to common shares
|
$
19,856
|
|
$
41,473
|
|
$
55,844
|
|
$
84,466
|
Per common
share - Basic
|
$
0.25
|
|
$
0.51
|
|
$
0.71
|
|
$
1.05
|
Per common
share - Diluted
|
$
0.25
|
|
$
0.51
|
|
$
0.71
|
|
$
1.05
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
24,205
|
|
$
47,229
|
|
$
68,296
|
|
$
97,686
|
|
|
|
|
|
|
|
|
Adjusted net income
allocable to common shares
|
$
23,994
|
|
$
46,851
|
|
$
67,752
|
|
$
96,984
|
Per common share -
Basic
|
$
0.31
|
|
$
0.58
|
|
$
0.86
|
|
$
1.20
|
Per common share -
Diluted
|
$
0.31
|
|
$
0.58
|
|
$
0.86
|
|
$
1.20
|
|
|
|
|
|
|
|
|
Basic common shares
outstanding
|
78,159
|
|
80,566
|
|
78,351
|
|
80,565
|
Diluted common shares
outstanding
|
78,159
|
|
80,566
|
|
78,351
|
|
80,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Dollars in
thousands)
|
Net income
|
$
|
20,030
|
|
|
$
|
41,808
|
|
|
$
|
56,292
|
|
|
$
|
85,077
|
|
Depreciation
|
75,070
|
|
|
77,368
|
|
|
151,717
|
|
|
152,214
|
|
Amortization of net
lease discounts and lease incentives
|
3,828
|
|
|
4,351
|
|
|
4,898
|
|
|
8,175
|
|
Interest,
net
|
62,452
|
|
|
61,551
|
|
|
126,693
|
|
|
123,682
|
|
Income tax
provision
|
2,385
|
|
|
4,465
|
|
|
6,324
|
|
|
9,328
|
|
EBITDA
|
163,765
|
|
|
189,543
|
|
|
345,924
|
|
|
378,476
|
|
Adjustments:
|
|
|
|
|
|
|
|
Impairment of
aircraft
|
16,723
|
|
|
23,955
|
|
|
16,723
|
|
|
23,955
|
|
Non-cash share
based payment expense
|
2,094
|
|
|
1,387
|
|
|
3,737
|
|
|
2,557
|
|
Gain on
mark-to-market of interest rate derivative contracts
|
(146)
|
|
|
(277)
|
|
|
(69)
|
|
|
(166)
|
|
Adjusted EBITDA
|
$
|
182,436
|
|
|
$
|
214,608
|
|
|
$
|
366,315
|
|
|
$
|
404,822
|
|
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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Dollars in
thousands)
|
Net income
|
$
|
20,030
|
|
|
$
|
41,808
|
|
|
$
|
56,292
|
|
|
$
|
85,077
|
|
Loan termination
fee(1)
|
—
|
|
|
—
|
|
|
1,509
|
|
|
—
|
|
Ineffective portion
and termination of hedges(1)
|
—
|
|
|
294
|
|
|
—
|
|
|
294
|
|
Gain on mark to market
of interest rate derivative contracts(2)
|
(146)
|
|
|
(277)
|
|
|
(69)
|
|
|
(166)
|
|
Write-off
of deferred financing fees(1)
|
—
|
|
|
—
|
|
|
1,972
|
|
|
—
|
|
Non-cash share based payment expense(3)
|
2,094
|
|
|
1,387
|
|
|
3,737
|
|
|
2,557
|
|
Term
Financing No. 1 hedge loss amortization
charges(1)
|
—
|
|
|
1,275
|
|
|
—
|
|
|
4,401
|
|
Securitization No. 1 hedge loss amortization charges
(1)
|
2,227
|
|
|
2,742
|
|
|
4,855
|
|
|
5,523
|
|
Adjusted net
income
|
$
|
24,205
|
|
|
$
|
47,229
|
|
|
$
|
68,296
|
|
|
$
|
97,686
|
|
|
|
|
(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)
|
|
|
|
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
|
$511,376
|
$12,597
|
$45,667
|
$318,286
|
($2,202)
|
$249,152
|
$1,774,568
|
14.0%
|
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 U.S. GAAP and the above reconciliation,
provide useful information about operating and period-over-period
performance, and provide additional information that is useful for
evaluating the underlying operating performance of our business
without regard to periodic reporting impacts related to non-cash
revenue and expense items and interest rate derivative accounting,
while recognizing the depreciating nature of our assets.
Aircastle Limited
and Subsidiaries
|
Reconciliation of
GAAP to Non-GAAP Measures
|
Net Cash Interest
Margin Calculation
|
(Dollars in
thousands)
|
(Unaudited)
|
|
|
|
|
|
Average NBV
of Flight
Equipment
|
|
Quarterly
Lease Rental
Revenue
|
|
Cash
Interest(1)
|
|
Annualized
Net Cash
Interest
Margin
|
Q1:11
|
|
$
4,041,967
|
|
$
141,116
|
|
$
41,278
|
|
9.9%
|
Q2:11
|
|
$
4,143,446
|
|
$
143,356
|
|
$
43,217
|
|
9.7%
|
Q3:11
|
|
$
4,222,512
|
|
$
145,890
|
|
$
42,066
|
|
9.8%
|
Q4:11
|
|
$
4,374,921
|
|
$
149,848
|
|
$
43,041
|
|
9.8%
|
Q1:12
|
|
$
4,388,008
|
|
$
152,242
|
|
$
44,969
|
|
9.8%
|
Q2:12
|
|
$
4,516,973
|
|
$
153,624
|
|
$
48,798
|
|
9.3%
|
Q3:12
|
|
$
4,602,185
|
|
$
159,546
|
|
$
41,373
|
|
10.3%
|
Q4:12
|
|
$
4,605,783
|
|
$
158,090
|
|
$
43,461
|
|
10.0%
|
Q1:13
|
|
$
4,619,204
|
|
$
156,590
|
|
$
48,591
|
|
9.4%
|
Q2:13
|
|
$
4,711,790
|
|
$
157,918
|
|
$
47,869
|
|
9.3%
|
Q3:13
|
|
$
4,717,877
|
|
$
161,148
|
|
$
47,682
|
|
9.6%
|
Q4:13
|
|
$
4,972,040
|
|
$
169,274
|
|
$
49,080
|
|
9.7%
|
Q1:14
|
|
$
5,168,851
|
|
$
174,335
|
|
$
51,685
|
|
9.5%
|
Q2:14
|
|
$
5,582,359
|
|
$
183,231
|
|
$
48,172
|
|
9.7%
|
Q3:14
|
|
$
5,412,299
|
|
$
178,886
|
|
$
44,820
|
|
9.9%
|
Q4:14
|
|
$
5,373,733
|
|
$
178,202
|
|
$
44,459
|
|
10.0%
|
Q1:15
|
|
$
5,637,513
|
|
$
177,146
|
|
$
50,235
|
|
9.0%
|
Q2:15
|
|
$
5,850,516
|
|
$
184,839
|
|
$
51,413
|
|
9.1%
|
Q3:15
|
|
$
5,926,459
|
|
$
188,037
|
|
$
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%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
June 30,
2016
|
|
|
Six Months
Ended
June 30,
2016
|
|
Weighted-average
shares(1):
|
Shares
|
|
Percent(2)
|
|
|
Shares
|
|
Percent(2)
|
|
Common shares
outstanding – Basic
|
78,159
|
|
99.13%
|
|
|
78,351
|
|
99.20%
|
|
Unvested restricted
common shares
|
686
|
|
0.87%
|
|
|
629
|
|
0.80%
|
|
Total
weighted-average shares outstanding
|
78,845
|
|
100.00%
|
|
|
78,981
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
|
Net income
|
$20,030
|
|
100.00%
|
|
|
$56,292
|
|
100.00%
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares
|
(174)
|
|
(0.87%)
|
|
|
(448)
|
|
(0.80%)
|
|
Earnings available to
common shares
|
$19,856
|
|
99.13%
|
|
|
$55,844
|
|
99.20%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$24,205
|
|
100.00%
|
|
|
$68,296
|
|
100.00%
|
|
Amounts allocated to
unvested restricted shares
|
(211)
|
|
(0.87%)
|
|
|
(544)
|
|
(0.80%)
|
|
Amounts allocated to
common shares
|
$23,994
|
|
99.13%
|
|
|
$67,752
|
|
99.20%
|
|
|
|
(1)
For the three and six months ended June 30, 2016 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
June 30,
2015
|
|
|
Six Months
Ended
June 30,
2015
|
|
|
Weighted-average
shares(1):
|
Shares
|
|
Percent(2)
|
|
|
Shares
|
|
Percent(2)
|
|
|
Common shares
outstanding – Basic
|
80,566
|
|
99.20%
|
|
|
80,565
|
|
99.28%
|
|
Unvested restricted
common shares
|
650
|
|
0.80%
|
|
|
583
|
|
0.72%
|
|
Total
weighted-average shares outstanding
|
81,217
|
|
100.00%
|
|
|
81,149
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
allocation
|
|
|
|
|
|
|
|
|
|
Net income
|
$41,808
|
|
100.00%
|
|
|
$85,077
|
|
100.00%
|
|
Distributed and
undistributed earnings allocated to unvested restricted
shares
|
(335)
|
|
(0.80%)
|
|
|
(611)
|
|
(0.72%)
|
|
Earnings available to
common shares
|
$41,473
|
|
99.20%
|
|
|
$84,466
|
|
99.28%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income allocation
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$47,229
|
|
100.00%
|
|
|
$97,686
|
|
100.00%
|
|
Amounts allocated to
unvested restricted shares
|
(378)
|
|
(0.80%)
|
|
|
(702)
|
|
(0.72%)
|
|
Amounts allocated to
common shares
|
$46,851
|
|
99.20%
|
|
|
$96,984
|
|
99.28%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
For the three and six months ended June 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:
+1-212-477-8438
|
fconstantinople@aircastle.com
|
lberman@igbir.com
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aircastle-announces-second-quarter-2016-results-300309010.html
SOURCE Aircastle Limited